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positive effects of raising minimum wage
positive effects of raising minimum wage
positive effects of raising minimum wage
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Fine dining restaurants, upscale stores, and discount stores are prospering. Meanwhile, more casual restaurants and stores are suffering. This can be described as the byproduct of the lower and upper classes taking over our economy, as the middle class slowly diminishes right before our eyes. John G. Maxwell, head of the global retail and consumer practice at PricewaterhouseCoopers stated this, “As a retailer or restaurant chain, if you’re not at the really high level or the low level, that’s a tough place to be. You don’t want to be stuck in the middle.” Middle class jobs are continuing to decline and before we know it America could be looking at a two class system rather than the three class system.
The middle class began in 1914, 100 years ago, when Henry Ford started offering five dollars a day to work in his Ford factory. This set the bar because that was equal to about 120 dollars a day in their time. Ford had a problem with finding reliable employees. He came to the conclusion that if he offered his employees better pay, he would have employees that cared about their job. The five dollars a day ended up having some major positive impacts on Ford's company. Daily absenteeism dropped from 10% to under 1%. Replacement hiring dropped from 53,000 in 1913 to just 2,000 by 1915, even though Ford’s workforce had grown substantially by then. And production in many departments soared by 50% or more. Henry Ford himself later called the $5 Day “the greatest cost-cutting move I ever made.”(Gallagher par. 8) These statistics proved that paying workers more will in turn save businesses money overall. Other businesses followed in Ford’s footsteps and started offering employees higher wages, this created what is now known as the middle cl...
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...ted with Changing U.S. Culture, Creating Modern Detroit." Detroit Free Press. Freep.com, 05 Jan. 2014. Web. 02 Apr. 2014.
"Henry Ford's $5-a-Day Revolution." - Press Release. Ford, n.d. Web. 2 Apr. 2014.
Kamp, Karin. "By the Numbers: The Incredibly Shrinking American Middle Class." BillMoyerscom. N.p., n.d. Web. 02 Apr. 2014.
Moore, Michael. "The Forbes 400 vs. Everybody Else." MichaelMoore.com. N.p., 07 Mar. 2011. Web. 03 Apr. 2014.
Suddath, Claire. "The Middle Class." Time. Time Inc., 27 Feb. 2009. Web. 02 Apr. 2014.
Traub, Amy, and Heather C. Mcghee. "State of the American Dream: Economic Policy and the Future of the Middle Class." An Equal Say And An Equal Chance For All. N.p., 06 June 2013. Web. 02 Apr. 2014.
"Wealth Inequality." Inequality.org. N.p., n.d. Web. 03 Apr. 2014.
"Who Is the Middle Class?" Sociology.com. N.p., 03 May 2013. Web. 03 Apr. 2014.
Edward McClelland focuses his essay RIP, the Middle Class: 1946-2013 on how the middle class is no longer able to thrive if the actions of the government continue – or their nonexistent
I consider my family and I to be in the middle class category and from being in the middle class, and the facts that are provided, the middle class is slowly declining as the time goes on. I believe that a lot of people go beyond the middle class to the upper middle class or people go below the middle class to the poor category. I’ve found a graph from Forbes that compares the rates of all classes from 1979 to 2014. From observing the graph my initial hypothesis was right. The middle class has declined by 6.8% between the years 1979-2014.
Let's take it back to the past in regards to wealth distribution in this country. The fact is that the economy boomed from the end of WWII into the 1970's. “Incomes grew rapidly and at roughly the same rate up and down the income ladder, roughly doubling in inflation-adjusted terms between the late 1940s and early 1970s” (CBPP). Through the 70's economic growth slowed, and the wealth gap widened. Middle-class families were now considered lower class. People relied on the government to help them out with welfare programs. The middle-class class was weakened and the gap grew and grew. There were periods of positive fluctuation, however the middle-class simply never regained it's status that was held in more prosperous times in the past.
Stone, Chad, Danilo Trisi, Arloc Sherman, and William Chen. "Center on Budget and Policy Priorities." A Guide to Statistics on Historical Trends in Income Inequality. Center on Budget and Policy Priorities, 6 Nov. 2013. Web. 03 Dec. 2013. .
There are eight classes in America consisting of the rich elite, very rich-upper class, lower-upper class, upper-middle class, middle class, working class, working poor and the underclass. The percentages of families in the various classes as established by Gilbert are thought to be 1.4 percent in the upper top class, 1.6 percent in the lower top class. 1...
The highest earning fifth of U.S. families earned 59.1% of all income, while the richest earned 88.9% of all wealth. A big gap between the rich and poor is often associated with low social mobility, which contradicts the American ideal of equal opportunity. Levels of income inequality are higher than they have been in almost a century, the top one percent has a share of the national income of over 20 percent (Wilhelm). There are a variety of factors that influence income inequality, a few of which will be discussed in this paper. Rising income inequality is caused by differences in life expectancy, rapidly increases in the incomes of the top 5 percent, social trends, and shifts in the global economy.
In the United States there are four social classes : the upper class, the middle class, the working class, and the lower class. Of these four classes the most inequality exists between the upper class and the lower class. This inequality can be seen in the incomes that the two classes earn. During the period 1979 through the present , the growth in income has disproportionately grown.The bottom sixty percent of the US population actually saw their real income decrease in 1990 dollars. The next 20% saw medium gains. The top twenty percent saw their income increase 18%. The wealthiest one percent saw their incomes rise drastically over 80%. As reported in the 1997 Center on Budget's analysis , the wealthiest one percent of Americans ( 2.6 million people) received as much after-tax income in 1994 as the bottom 35 percent of the population combined (88 million people). But in 1977 the bottom 35 percent had about twice as much after tax income as the top one percent. These statistics further show the disproportional income growth among the social classes. The gr...
The largest group in America is facing extinction. We are talking of course about the American middle class. In 1971 the American middle class population was 36% higher than the population of the lower class. However, today the middle class population is now only 22% higher than the lower class (McDill). This is only a 14% drop spread over 44 years. The major issue here is that while the middle class shrinks, the upper and lower classes are growing. Financial experts believe that soon the middle class will become nonexistent and America will be divided into two extremes, poverty and wealth. This issue has become so severe that the United States government has stepped in and created a “middle class task force” passed as part of the government “stimulus package” of 2009. However most experts including Kent McDill of the millionaires’ corner, Doyle McManus of the LA Times, Erik Kain of Forbes magazine believe that the government’s program is putting a knife in the middle class. They believe this because the government is taxing businesses until they are forced to leave America and go overseas. This, along with the rise of mechanical workers and ignorance of the issues facing the middle class led to the decreasing job market. Jobs in America will soon be split into either very high paying upper class jobs or very low paying jobs. This makes the job market a hit or miss in America. It is predicted that America will soon be either very rich or very poor with no middle ground.
However, in recent years, the share of income possessed by the middle class has fallen to a historically low level. Fairchild states, "The middle 60 percent of households earned 53.2 percent of national income in 1968. That number has fallen to just 45.7 percent (¶2)." Interestingly enough, another figure that fell at the same rate was union membership. Because of laws limiting Union power, membership had fallen to an all time low in recent years with 11.3 percent. There are many reasons that these two might correlate. First, unions insured access to a livable minimum wage. This increased income along with health benefits and pension plans makes for a vibrant middle class (Fairchild ¶1-3). Not only do the members of unions benefit, but the presence of unions also raises pay for non-union workers in the same industries. Unions not only raise the floor on wages, but it also lowers the ceiling on the richest of our country. Because of union 's bargaining powers, the compensation of executives at those firms are moderated. It goes without saying, the middle class is at its strongest with unions. If unions continue to lose members and if unions continue to lose their bargaining power, the economic inequality will continue to
I never thought I would find so much information on the incredibly shrinking middle class until I searched around for it on the Internet. In the United States, the middle class is put into a strange socioeconomic category. Although it is not easily defined everyone believes they belong in that class. I guess what you can do is look at it in two different ways. First ask the question “What percent of all income is distributed to the middle class at any time,” then think about “How many families obtain enough income to achieve a middle class standard of living at any point of time.” Basically these are two ways of approaching the middle class called either the percentile approach or the class share approach.
Social and economic class is something we as Americans like to push into the back of our minds. Sometimes recognizing our class either socially or economically can almost be crippling. When individuals recognize class, limitations and judgment confront us. Instead, we should know it is important to recognize our class, but not let it define and limit us. In the essay, “Class in America”, Gregory Mantsios, founder and director of the Joseph S. Murphy Institute for Worker Education at the School of Professional Studies, brings to light the fact that Americans don’t talk about class and class mobility. He describes the classes in extremes, mainly focusing on the very sharp divide between the extremely wealthy and extremely poor. In contrast, George
While the the 1%, are secured, no one is addressing the rest of the people. As the economy flourishes, housing, higher education and health care, and child care increases with it to the point where 30 percent of a person’s income goes towards housing. People are finding it impossible to purchase a house with their middle class incomes. People begin to fall out of the once stable middle class because too much is needed to be sacrificed in order to live in a stable home. In the shrinking middle class, “40% or more of the residents live below the poverty
Desilver, Drew. “U.S. Income Inequality, On The Rise…” Pew Research Center. 5 Dec. 2013. Web. 12 Feb. 2014.
Since the rise of capitalism was underway, everything was being mass produced for a affordable price. This new abundance made the imbalance in economic classes significantly worse. Only big business manufacturers and merchants, lawyers, successful farmers, and other professionals dominated the locus of production, which lead to the decline of household needs as a source of production. Clothing was no longer being made at home, and food was being mass produced and sent to small shops. While this made some things easier for the average household, it took away much of the lower class’s means of
Rosenbaum, E. (2013, August 8). A new species? The elusive nature of the global middle class. Retrieved from http://www.cnbc.com/id/100949800