The rise in growing number of populist leaders in democracies, ranging from Marine Le Pen to Donald Trump is intimately connected to today’s biggest problems: the “hollowing out” of the middle class.
The fact is many people have less money in their pockets – and understandably, this has motivated people to take action against the status quo.
This phenomenon is not limited to major cities, either.
Here’s look at the change in income distribution using smaller brackets and the whole U.S. adult population:
Courtesy of: FT (h/t Metrocosm)
It’s a multi-faceted challenge, because while a significant portion of middle class households are being shifted into lower income territory, there are also many households that are doing the opposite. According to Pew Research, the percentage of households in the upper income bracket has grown from 14% to 21% between 1971 and 2015.
The end result? With people being pushed to both ends of the spectrum, the middle class has decreased considerably in size. In 1971, the middle class made up 61% of the adult population, and by 2014 it accounted for less than 50%.
As this “core” of society shrinks, it aggravates the aforementioned problems. People and governments borrow more money to make up for a lack of middle class wealth, while backlashes against globalism, free trade, and open borders are fueled. The populists who can “fix” the broken system are elected, and so on.