{"id":17463,"date":"2016-02-08T11:42:38","date_gmt":"2016-02-08T16:42:38","guid":{"rendered":"http:\/\/olduvai.ca\/?p=17463"},"modified":"2016-02-08T11:42:38","modified_gmt":"2016-02-08T16:42:38","slug":"the-increasingly-fragile-upper-middle-class","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=17463","title":{"rendered":"The Increasingly Fragile Upper-Middle Class"},"content":{"rendered":"

The Increasingly Fragile Upper-Middle Class<\/a><\/h3>\n

Many of these apparently high incomes are completely absorbed by high-cost upper middle class expenses.<\/i><\/p>\n

Since the top 10% takes home 50% of all household income, it follows that this top slice has most of the discretionary cash<\/b>, i.e. net income left after taxes, servicing debt and paying for essentials such as food, utilities and housing.<\/p>\n

It also follows that the discretionary spending of the top 10% is supporting much of the economy that is dependent on discretionary spending: tourism, eating out, personal trainers, etc.<\/p>\n

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The top 10% includes the thin slice of Financial Oligarchy (top .01%) and the top 1%.<\/b>\u00a0This skews the income and wealth of the top 10%. But if we set aside the top 1%, the next 10% still earns the lion’s share of household income.<\/p>\n

The top .1% can prop up Maserati sales and buy $5 million vacation homes, but there simply aren’t enough super-wealthy to support the U.S. economy. As for the top 1%, they can prop up the local Porsche dealership and pay dock fees at the yacht club, but there aren’t enough of them to support the entire economy, either: around 1.5 million qualify as top 1%.<\/p>\n

So that leaves the upper-middle class, the roughly 12 million households that earn a disproportionate share of household income, with the task of spending enough discretionary cash to prop up an economy that depends heavily on consumer spending.<\/p>\n

Many of these upper-middle class households are far more financially fragile than their substantial incomes suggest.<\/b>\u00a0The vast majority of these high-income households depend on two earners, each making substantial salaries, bonuses and benefits such as 401K retirement contributions.<\/p>\n

Many of these apparently high incomes are completely absorbed by high-cost upper middle class expenses.<\/b>\u00a0$250,000 a year may look like a lot until you throw in a couple of kids attending private prep schools or college, healthcare costs that aren’t covered by insurance, an enormous mortgage and sky-high property taxes.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n","protected":false},"excerpt":{"rendered":"

The Increasingly Fragile Upper-Middle Class Many of these apparently high incomes are completely absorbed by high-cost upper middle class expenses. Since the top 10% takes home 50% of all household income, it follows that this top slice has most of the discretionary cash, i.e. net income left after taxes, servicing debt and paying for essentials […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[127,195,2137,4924,1615,827,834],"class_list":["post-17463","post","type-post","status-publish","format-standard","hentry","category-economics","tag-charles-hugh-smith","tag-debt","tag-middle-class","tag-oftwominds","tag-spending","tag-united-states","tag-us"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17463","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=17463"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17463\/revisions"}],"predecessor-version":[{"id":17464,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/17463\/revisions\/17464"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=17463"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=17463"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=17463"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}