Feudalism is on its way back.
By Eshe Nelson
Across Western Europe and North America, the middle class is shrinking, according to a 2019 report by the OECD. With each new generation, a smaller share of the population find themselves earning middle incomes.
When the Baby Boomers, who were born between 1943 and 1964, were in their twenties, some 68 percent were in middle-income households. Only 60 percent of Millennials, who were born between 1983 and 2002, could say the same at a similar time in their lives.
The OECD defines the middle class as people earning between 75 and 200 percent of the national median annual income. Its data is an average of results from Canada, Denmark, Finland, France, the United Kingdom, Ireland, Italy, Luxembourg, Mexico, the Netherlands, Norway, Spain, Sweden, and the United States.
The “economic influence” of the middle class has also dropped sharply over time, said the OECD report, which was published on April 10, 2019. Across the OECD, middle incomes have increased by just 0.3 percent per year, on average, over the past decade. By comparison, in the decade before the financial crisis, middle incomes grew by 1.6 percent per year, and by 1 percent the decade before that.
Housing costs are squeezing the middle class the hardest; this now consumes a third of disposable income for middle-class households, up from a quarter in the 1990s. Housing and higher education expenses have been rising faster than middle incomes, the OECD said.