Dawn J Bennett, CEO and Founder of Bennett Financial Services and host of Financial Myth Busting, recently interviewed financial writer and author, Charles Hugh Smith. Charles Hugh Smith writes financial commentary that regularly appears on different financial sites, such as, David Stockman’s Contra Corner, and on his own personal web site called Of Two Minds. He is also the author of seven novels. Dawn J Bennett asks Smith is the middle class is eroding.
“Well, the middle class is eroding, and we’re looking around, as a society, for causes,” said Smith. “And some people look at it at politically related causes, such as tax rates or high regulatory burdens on new business, and those are definitely factors. But my thesis, which is shared by a lot of other people, is that the economy is changing in fundamental, systemic ways, and so we’re forced to adapt sort of on the fly. Because no one could really predict with any accuracy the impact of technologies like the internet, robotics, software, all these forces which are automating human labor. And so for the factory worker, it happened quite a while ago that automation sort of ate a lot of factory floor jobs, and now software and technology is advancing so quickly that it’s starting to erode higher level jobs, and so that’s a huge impact on the middle class.”
According to the Pew Research Center in December 2015, the number of middle class citizens is shrinking. It has shrunk 11% since 1971 while says that the number of households that are classified as wealthier have increased from 14% to 21%. So is the middle class shrinking because people are becoming richer? Dawn asks Charles Hugh Smith for his opinion.
“Well, Dawn, that’s an excellent question, because that statistic you just quoted suggests that the upper middle class, which we can define it in a lot of different ways, but say it’s people or households earning $150,000 and up, has grown dramatically,” said Smith. “And this is generally ascribed to the difference in skill sets, that those people with the skill sets to benefit most in a rapidly changing, tech-heavy economy are being rewarded for their profitability, if you will, by their employers, where people with fewer skills and fewer tech skills, their income is stagnating, because they just can’t be profitable in the same way to their employers. So I think that impact is real, and it’s something that sort of forces the traditional middle class into either upgrading their skills or tightening their belts, so that they spend less and have more available cash to invest in themselves and the future. ”
Read more from Dawn J Bennett here: http://www.releasewire.com/press-releases/dawn-bennett-host-of-radio-show-financial-myth-busting-interviews-charles-hugh-smith-financial-commentary-writer-and-author-662765.htm