15 Sep 2020
Middle Class Income: What went wrong?
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
The attached paper calculates that the aggregate income for the American population below the 90th percentile would have been US$2.5 trillion or 67% higher in 2018 had income growth since 1975 remained as equitable as it was in the first two decades post World War II.
Click to read.
The middle class is barely holding on in the United States but it is not the fault of business.
And it is also not the fault of high net worth individuals who derive their income from business.
The fault is squarely with Government.
It is the role of Government to legislate for the people and to ensure that the income derived by business from society ultimately finds its way back into society.
Government makes the rules using legislation and business will play by the rules and yes business will also push the boundaries but ultimately comply with the law.
The problem with the current set of rules is that they will continue the trend of the past four decades which will result in even greater income inequality.
If the middle class disappears then so too does a countries economic prosperity.
At Newealth we are always looking to support and promote our clients wherever possible and if you have any ideas or comments, please feel free to email me or to call me on +61 2 9267 2322.
