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28. When Working Class is an Option, half of the "Middle Class" opts for it.

Last edited Fri Nov 22, 2013, 02:19 PM - Edit history (1)

When "Working Class" is NOT an option, those same people opt for "Middle Class" in the US. In most surveys AND when most people are talking "Working Class" is NOT an option, thus Working Class people opt for "Middle Class" rather then poor. Prior to WWII, that same group would have called themselves "Poor", if "Working Class" was NOT an option.

The propaganda (I can NOT come up with a better term) in the US has said all Americans are "Middle Class" even when they are NOT. Thus my welfare recipient who called herself "Middle Class" instead of the Working Poor. Thus my demand that you define the term. The term "Middle Class" has become "American" i.e. everyone. "Middle Class" has become a meaningless term unless defined.

The Traditional definition of Middle Class (The top 10% less the top 1%), th pre-WWII definition even in the US, is clearly NOT what most Americans think of when they use the term "Middle Class" Today.

The better argument is that the Middle Class is the top 40% of the population less the top 1%, the Working Class is the bottom 60% less the true poor who are the bottom 10%. To use the true middle is also to use that part of the Income divide where most people are around, thus you have both Upper Middle Class and Working Class in the same income bracket.

Remember, the above "divides" are more fuzzy areas of overlap. Working Class People dip into the poor on occasion, the Upper Middle Class dip into the Working Class (and some times the poor) on occasion. Some Working Class workers, do to skills and demand, sometime earn more then many Upper Middle Class people. The issue of Class is thus "fuzzy" for people do NOT go through a ceremony as they go from one class to the next (such as graduation from School), and people's bodies do not Change as they moved from one class to another (such as when your body changes during puberty).

Thus any income, assets, neighborhood etc differences between the class may appear minor on the edges, but as you look more and more into people in those classes, what they drive, where they live, where they go to school and shop and even how they dress can show their class (and on top of this is a tendency to up class one self by buying what people think people of a higher class wears, lives, drive etc).


Side Note: I am into Archery and History. Inflation is easy to determine if you use one item as the basis for inflation (i.e. what can a curacy buys) but it is hard when the Currency itself deflates in value (i.e. when you use something other then currency as curacy, which was the case when we were on the Gold Standard. Gold, like other items, goes up and down in value but those changes are hard to determine for people use the currency not the gold the currency is made up). In such systems you have to look at what that currency could buy. I mention this for England had a law that if you were "worth" less then 30 pounds you had to practice Archery, if you were "worth" more then 30 pounds you did not have to. This goes to the issue of Class.

30 Pounds was the cut off between the vast majority of peasants and the then growing Middle Class (i.e. the traditional Middle Class the top 10% less the top 1-3%).

In the 1400s the British pound was defined as containing 240 Pennies. Each Penney contain 12 grain of Silver (in the 1500s this was reduced to 8 grains of silver). Thus a pound contain 2880 grains of Silver, or 186.62 grams of Silver or 6 Troy Ounces of Silver (in the 1500s that was reduced to 4 troy ounces of silver).

Today a troy ounce of Silver is worth less then $20. Thus the Silver in a pound in minted in the 1400s would be worth $120 ($80 if we are talking of silver in a pound minted in the 1500s). Thus 30 pounds in 1400 is about $3600 today if we just look at the price of silver, and ignore inflation caused by the massive influx of Gold and Silver into Europe after the Conquest of Mexico and Peru.

The massive introduction of Gold and Silver made inflation a major problem during the 1500. A good way to look at this is the price of wheat. The price per bushel of wheat went from .58 shillings per bushel in 1500 to 3.20 shillings per bushel in 1600. Then stabilized till the mid 1700s when it started to go to above 10 shillings per bushel ounce around 1800 and stayed at that price till 1819 then went into a slow decline to about 5 to 9 Shillings per bushel till you see a huge drop in the late 1800s do to massive importation of wheat from Poland, Russia and the US (England had adopted free trade so the imports became cheap as steam ships made moving the wheat cheap).

http://www.econ.ucdavis.edu/faculty/gclark/papers/Agprice.pdf

Thus a rough pricing would be .60 Shillings a bushel around 1500, 3,20 shillings per bushel around 1600, 10 Shillings per bushel around 1800, and 8 Shilling per bushel around 1850 The price drop after 1500 was driven by a change in technology, i.e. the Reaper that reduced the cost of harvesting wheat and thus its price). Thus you are looking at around an increase in the price of wheat of 14 times between 1400 and 1850 (or a decrease in the value of Silver by the same factor of 14).

Thus by 1850 what you could buy with the silver in 30 pounds of 1400, you needed the silver in 1230 pound coins. Notice this reflects the drop in the value of SILVER, not inflation in terms of Pounds.

The invention of the wheat haves tor and the massive influx into the world's markets of American Wheat saw the price of wheat drop after 1850, and thus no longer an good indicator of what the value of Silver and Gold was. On the other hand, the US, do to the influx of Gold from the California Gold fields establish its Dollar at $20 an ounce in 1857 (it had been officially at that price for decades, but do to a huge shortage of gold and silver NEVER at that level prior to 1857).

The influx of Gold from the California Gold Rush increase productivity 25% in the 1850s (mostly do to increase construction do to the increased money supply) and an almost 2% increase in what you can buy for each year of the period 1850 to 1860 or about 20%, one of the highest drop in prices in American history, mostly do to the drop in the value of Gold and Silver do to the massive influx of Gold and Silver from California and later Nevada

http://www.nber.org/chapters/c8007.pdf

Thus if you apply that 20% rule to the Silver in 1230 pounds the Silver in 30 pounds of 1400 had become, you are looking at the same value of silver in 1476 pounds by 1860.

Subsequent to the massive influx of Gold, you had a massive influx of Silver after 1860 from Nevada, this influx had the effect of reducing the value of Silver to Gold of the 20 to 1 ratio of 1857, to almost a 40 to one by 1900, and 80 to 1 today. Thus the Silver in 1476 pounds of 1850 became 5904 pounds today.

Now, we also have to realized that the price of Silver in relation to gold drop tremendously in the 1800s. After the California Gold Rush the US stabilized its coinage system in 1857. An Ounce of Gold was to be $20, an Ounce of Silver was to be $1 (The 20 to 1 spread). By 1900, the silver content in the American Silver dollar had NOT dropped since 1857, but its price in relation to gold had, the silver in a silver dollar was only worth 55 cents by then. Gold prices peaked in the Spring at about $1600 an ounce, Silver is still below $20 an ounce, an 80 to 1 spread. Thus since 1971 when the US went off the gold standard (after changing it to $35 an ounce of gold in 1935), the value of silver in relations to gold has decreased by a factor of at least 4. Thus we have to take the $3600 above and increase it by 4, or $14,400 (in 1400s terms of the pound, using 1500s term for the pound we may be looking at $20,000).

Cite that says $1 in 1850 is the same as $28.30 today, which would make 1476 pounds, 41,770,80 pounds today (I know the cite uses dollars not pounds, but from 1850 to 1971 it was $5 to a Pound and inflation was roughly the same, today it is $1 to 1.6 pounds. so if anything I am low. I am using it for the rate of change NOT the actual amount of change).

http://xfinity.comcast.net/slideshow/finance-americancosts/5/

Thus if we use the $28,30 test for $1 in 1850, you have to be worth more then $80,000 to be exempt from Archery if the 30 pound cut off had been inflation indexed.

I go into the details above, for it shows the difficulty in adjusting prices, income and net worth over a long time period (To many different factors, affecting those values at different rates AND times). Also remember I am talking about "Net Worth" not income. Thus the $80,000 NET WORTH seems about right to be the cut off, it would exclude roughly 20 to 25% of the population, but that 20-25% would include the Middle Class.

On the other hand it does agree with the traditional definition for the Middle Class, the top 10% (through the numbers would be the top 20% there is enough errors in these calculations to say it is the top 10% note the top 20%).

I went into the above more the sure this problem of defining the Middle Class has been a problem for centuries do to the definition tends to be asset bases, and assets value changes over time. Archery was a poor man. Working Class requirement Th3 30 pounds test was to exclude people with money, both the nobility AND the what we Americans call the Upper Middle Class. When looking in the past one of the chief problems was the massive gold and silver inflation of the 1500s and again in the 1850s (for Gold) and late 1800s (for Silver). You have to account for them, but it is easier to ignore them.