In his new book, “The Vanishing Middle Class,” Peter Temin, professor emeritus of economics at Massachusetts Institute of Technology, warns that the US is moving backward and becoming more like a developing nation, as the “the vanishing middle class has left behind a dual economy.”
“We are still one country, but the stretch of incomes is fraying the unity of the nation,” Temin wrote in the introduction of his book, according to a copy obtained by Barnard College.
The economist describes a dual economy, where the gap between the rich and the poor has grown wider.
Temin points to a study from the Pew Research Center, which, he said, “shows that the income share lost by the middle class has gone to people earning more than double the median income.”
“In short, the rich got richer. The poor did not disappear, and the middle class shrank sharply,” Temin wrote. “We are on our way to become a nation of the rich and the poor with only a few people in the middle.”
Temin argues that American history and politics had a lot to do with the increasing wealth inequality.
Over a period of 40 years, from World War II to the 1970s, Temin said that wages grew with the rest of the economy. Then, starting in the 1970s, national production continued to grow, but wages did not.
“The middle class’s share of total income fell 30 percent in 44 years,” Temin wrote.
The wealthiest 20 percent of the population had access to education, good jobs and social networks, while the other 80 percent was increasingly burdened with debts, low-wage jobs, and health problems. Now, Temin said the conditions where many poorer Americans live in resemble developing countries, with dilapidated housing, crumbling public transportation, and roads and neglected social structures.