Saturday 7 December 2019

American middle-class 'no longer most prosperous'

Rosa Prince

MIDDLE-CLASS Americans have lost their status as the most prosperous in the world, according to a survey. In a blow to the American dream, a person on median income in the US is now less well-off than one in Canada.

The data shows that median incomes – the middle 10pc of earners – are falling in the US compared with international competitors, despite relatively strong growth.

The disparity is explained by the fact that the richest 5pc of Americans remain by far the world's most affluent.

In contrast, the poorest 5pc are worse off in the US than in many other countries in the developed world, including Canada, Sweden, Norway, Finland and Holland, all of which were behind America in poverty terms in the 1980s.

INCOMES

The gap between top, middle and lower-income earners in the US is growing, according to the data, compiled by the Luxembourg Income Study Database.

Although America remains the richest country in the world in terms of gross domestic product per capita, wealth distribution is concentrated at the top, with middle-class incomes rising far less fast that those in the top 5pc.

An American family of four on a median income now takes home about $75,000 (€54,000) after taxes – up 20pc since 1980 but virtually unchanged since 2000 after adjusting for inflation.

In Britain, middle-class incomes rose by 20pc between 2000 and 2010 alone, a similar rate to Canada. Pay in this income bracket has risen faster in much of Europe than in the United States.

In 2010, middle-class Canadians and Americans enjoyed similar average incomes, but analysts for the 'New York Times' estimate that Canada will have pulled ahead since then. (© Daily Telegraph, London)

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