Decline of the Middle Class

Source: Reuters

The economic principle I’m exploring is Institutions are the "rules of the game" that influence choices

My research question to help me study the economic principle is "How socially mobile is America
today?"The article published in The Atlantic titled “Poor at 20, Poor for Life” demonstrates this
economic principle by showing that people aren’t moving up form where they started, the middle class is becoming stagnant, and the top is becoming very lonely.

Millennials today have a lower chance of moving up the social ladder than previous generations.
According to the article, “the probability of ending where you start has gone up, and the probability of moving up from where you start has gone down." This lack of progress shows me that the U.S has failed to give millennials the same opportunities afforded to previous generations, who benefited from low tax rates and low college tuitions. With inflation of goods and services, people now have to spend more on the same products. This makes it hard to save money, and thus prolongs the time it takes to put a down payment on a house or go on vacations every year.

The article also showed that the American Dream is fading for many. The article stated, “if you’re in the middle, you’re stuck in the middle, which means there’s less space for others to move into the middle". This article talked about the shrinking of the middle class, which has squeezed itself into being hard to enter and hard to escape. It is being shown that college degrees aren't helping much either, as the bachelor degree is losing value to employers and thus are offering lower wages for entry-level jobs. After reading this article, I recognize that the "American dream" is slowly fading and I will look into what economic factors are causing this, and whether or not they can be solved.

In my next blog post I will research the question: How much wealth disparity there is in the U.S.