You may also note that the author isn't disputing rising inequality. But nobody is debating that. Inequality is getting bigger because the wealthy are making even bigger gains - which is irrelevant when we're considering the gains made by the middle class.
I don't quite understand--why is it irrelevant? Doesn't it mean that there is less gains for the middle class?
Not at all - the economy isn't a zero-sum game. If your salary goes from $100k to $160k and mine goes from $60k to $90k, I'm better off than I was before. In our economy of two we have more inequality - but we wouldn't say that I was better off before I got my raise. It's also highly unlikely that I'd be paid more if only you got a smaller raise. It's a surprisingly widespread misunderstanding, though. You see it whenever someone claims that limiting top executive pay would somehow benefit workers. But the worker's position in the labor market doesn't improve because the CEO earns less, so he will see no benefit from it.
But there are other factors you don't consider, such as the outrageous increase in price of medical insurance and university tuition. These two stables of middle class life have increased far out of proportion to incomes, and I think they take a huge chunk out of most American families' incomes than do thinks like renting Louis Vuitton bags.
Health insurance is still mostly paid for by employers. The Census bureau does not consider that part of income, so when you see household data, it is always after insurance (if covered by the employer). Personal income, collected by the BEA, includes health insurance, so it appears to grow much faster.
Tuition is going up, but I don't know if there is any data on the bottom line for the middle class. You'd have to consider tax breaks, scholarships, grants, subsidized loans... in-state tuition also seems fairly reasonable. It's worth noting that many more people go to college today. So we might say that the expectation of a college degree is also fairly modern. In my opinion a good thing, of course, but that's another way in which today's middle class is much better off than their predecessors.
Also, Americans have been groomed to spend. After 9/11 Bush famously told people to keep spending. Many Americans think that they only have value as consumers, and everyone from the media to their politicians reinforces this idea.
I wouldn't be surprised if we were much more influenced by advertisements today. The techniques used are certainly a lot more sophisticated. I'm fascinated by neuromarketing, especially when it actually works in practice. I remember a Swiss supermarket closing to change the layout of the store and boosting revenue significantly when they opened again. The biggest change they did was to move the entrance from the left side to the right - people spend more when they walk counter-clockwise through a store. :) They also optimized the flow after monitoring consumers in the store.
I sort of feel for consumers who aren't aware of how they're being influenced. At the same time, I'm not at a point where I'll accept consumers as mindless drones. Surely they give more thought to buying a house than selecting toothpaste?
I have had similar thoughts about students who come in with Starbucks coffees, but I don't think overprivileged 18yr olds not in the job market are a good indicator of middle class spending habits.
I'm not sure if they really are overprivileged - there are too many of them to represent the wealthy. They have to get their spending behavior from somewhere...
I will admit that the truly overprivileged ones are awesome to have around. You see, unemployment isn't actually a problem, because hu got a job over the summer working at a golf club. If he can get it, the fact that inner city blacks aren't driving out to work there must be a sign of their unwillingness to work. :)
