The Middle Class is now a minority, number of poor surges

Rising costs and low wages are to blame.

If it feels like it's getting tough out there, it's because it is. According to research from Pew, household spending has increased due to the higher costs of necessities, while household income has declined.

LOS ANGELES, CA (California Network) - A new study from the Pew Charitable Trusts reveals that the middle class isn't just a minority, it's also shrinking fast. Between 2004 and 2014, household spending increased by 14 percent, while income declined by 13 percent. Both figures were adjusted for inflation.

However, the increased spending isn't because the shrinking middle class is spending their money on "bling-bling" and vacations, it's because their costs for things like food, healthcare and other costs of living have increased.

Meanwhile, their wages have declined as owners and bosses elect to forgo raises and to keep the profits for themselves. We know this is happening because worker productivity continues to rise.

The correct fix for the problem would be to give workers raises, however most CEOs only keep their jobs by increasing shareholder value year after year, and that means showing an increase in profits. The easiest way to get those profits seems to be by suppressing worker wages.

The result is that the middle class is being caught in a double bind of rising prices and falling purchasing power. This is in turn fueling the rise of the poor in America, who now outnumber the middle class.

This development is important because the middle class has long been a stalwart hedge against socialism and radicalism in U.S. government. Now that hedge is gone, and the nation will begin shifting left as more people internalize their new status below the poverty line.

According to Pew, a decade ago a poor family in the lower third of the scale, had about $1,500 per year in extra income. Today, they are $2,300 in debt, and that figure is rising. This matches reports that credit card debt is rising rapidly.

Most families in the United States are just one job loss or emergency away from abject poverty.

Worse, corporate profits are falling, making it harder to ask for a raise, and harder for owners to give raises, even when justified. Moreover, layoffs could be in the future.

Job cuts are being announced for the coming summer as corporate profits decline. Jobs always follow profits, and the reports to date for 2016 are showing a sharp downward trend. This means the layoffs are coming.

At the same time, robots and AI are coming on the scene, with a surge expected in the next five years that will wipe out millions of low-paid, low-skilled labor. Beyond that, other jobs, many that require precision and skill, will be lost. Eventually, white color jobs will be jeopardized by increases in workplace efficiency.

Within a decade, the U.S. could be a very poor nation with a dangerous divide between the rich and poor.

Americans need to take stock of our nation's financial future. Ever since we stopped paying workers in accord with their productivity, the economic situation for the middle class has deteriorated.

Workers are producing enough to deserve more, and to deserve decent middle class wages, but employers remain unwilling to pay them. And that's going to be a problem for everybody as the social fabric of our nation changes for the worse.

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