Why the middle class and middle income are NOT the same thing. The middle income can change based on the overall wages in a given economic environment.  In an environment where wages are going up and out pacing cost of living people in the middle income can gain purchasing power and maintain or increase their living standards.  In an environment where wages are going down and the cost of living is going up people in the middle income can lose purchasing power and be forced to decrease their living standards.

Example: Let’s say you are earning wages that are in the middle income.  Those wages go up 5%.  That same year the majority of wages go down 2%.  Your wages are now 5% better than they were and 7% better than the majority.  But let’s say the cost of living goes up 10% that year.  From a “middle income” perspective you are better off, but from the “middle class” perspective you are worse off.  You have gained income but must pay more than your gained income to maintain your living standard.

It is my contention that the living standard for the Middle Class would not go down.  In an unhealthy economic environment (the reduction or stagnation of wages) the number of citizens counted as Middle Class would decrease and the number of below Middle Class would increase.  The definition of purchasing power (living standard) for the Middle Class would not be reduced.

So, how would we define the living standard (LS)?  I have no idea!  We need the experts on United States of America economics and experts on the data available for the economics of our citizens to come up with a way to define whos’ LS falls within the Middle Class. I feel this will be difficult, but more importantly I feel it will be transformative to our understanding of what our government is doing.