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November 26, 2013

CECIL BOHANON: The middle class in 'red' and 'blue' states

Low taxes, limited gov't: Equitable incomes

Recent census data indi-cates that although the total number of households in the United States increased between 2008 and 2011, the number reporting earned annual income of $35,000 to $100,000 actually decreased by 676,000. This is significant because it confirms the narrative of middle-class decline.

I have always thought that if middle-class decline is accompanied by a decline in households with lower income (less than $35,000) and an increase in upper-income households (more than $100,000), then hooray for middle-class decline. The national data, however, reveals an increased number of lower-income households (967,000) and an increased number of households with upper income (1,847,000). So the news is decidedly mixed.

To conservatives and libertarians, the decline in the middle class is somewhat problematic — but we are not as apoplectic about the issue as progressives. To our more left-leaning friends, the pulling apart of the income distribution is a disaster calling for massive government intervention. Those of us who are less than politically correct, however, say income distribution is kind of like the weather: It is of interest, but we suspect there is little the government can do about it that is useful. Oh gee, I forgot: According to progressives, we can “save the planet” from sure doom by installing windmills and solar panels everywhere — which will, they argue, also restore the middle class.

The census data is also parsed state by state. Indiana’s population has essentially been stagnant over this time frame. The data shows the Hoosier State has lost 28,000 middle-income households. The good news, though, is that upper-income households have increased by 25,000 while lower-income households have only increased by 2,000. In my opinion, this beats the national trend.

Interestingly, the red-state, mid-continental energy belt of North Dakota to Oklahoma has bucked the national trend and actually has seen a decline of 42,000 low-income households coupled with an increase of 13,000 middle-income households and an increase of 107,000 high-income households. Could it be that developing “evil” carbon energy reduces poverty and strengthens the middle class?

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