According to CNN, a new study by the Organisation for Economic Cooperation and Development titled “Under Pressure: The Squeezed Middle Class,” reveals that middle-income households are disappearing in developed countries, including in the U.S.
"Today the middle class looks increasingly like a boat in rocky waters," said OECD Secretary-General Angel Gurría. "Governments must listen to people's concerns and protect and promote middle-class living standards."
The strain on the middle class has helped fuel the rise of progressive Democrats in the U.S., who hope to increase taxes on the rick to give the middle-class a better safety net.
In the mid-1980s, the share of people in middle-income households in developed countries was 64%. By the mid-2010s, that number had fallen to 61%. The declines were especially pronounced in the U.S., Israel, Germany, Canada, Finland, and Sweden.
The U.S. middle class is made up of just over 50% of the population, which is much smaller than most developed countries.
The cause of the new trend is rising income inequality. More, costs are rising faster than inflation in wealthy economies, making it more difficult for the middle class to keep up.
"The investment of the middle class in education, health, and housing, their support for good quality public services, their intolerance of corruption, and their trust in others and in democratic institutions, are the very foundations of inclusive growth," the report said.
Millenials are having an even more difficult time reaching the middle class than those in other generations. Among baby boomers, close to 70% were in the middle class when they were in their 20s. 64% of Gen X was in the middle class by that age, but only 60% of millennials are now in the middle class when they reach their 20s.
Job insecurity is also rising as one in six current middle income jobs are at risk to be automatized.
"These trends paint an uncertain picture for workers with middle incomes, in particular, those with low-medium skills in routine jobs," the report said.
The OECD offers suggestions for this issue, including lowering taxes on the middle class and increasing taxes for the wealthy, developing more affordable housing, assisting young adults as they build wealth, and containing the price of education among other points.
Read the full story here.