The Middle Class Is In Trouble!

Only high income earners can keep up on essentials like housing.

The Blue Collar Dollar Institute aims to understand how the United States’ decision to subsidize foreign manufacturing is decreasing the size of our middle class, increasing the amount of Americans in poverty and catapulting forward the wealth in both the top 5% and foreign competitors.

The Problem

By offshoring much of our manufacturing base, the United States has developed a dependency on importing consumer goods, amassing debt in the private and public sectors, and relying on critical goods from abroad in times of crisis such as pandemics and wars.
Monthly U.S. Goods Trade Deficit (May 2026)
$103.7 Billion

14% of which is with China

Cumulative U.S. Goods Trade Deficit (1960 to May 2026)
$23.4 Trillion

32% of which is with China

Major U.S. Trade Deficits by Product (2025)
Motor Cars & Other Motor Vehicles

-$128 billion

Automatic Data Processing Machines

-$190 billion

Telephone Sets & Cellphones

-$95 billion

The Data

Since 1965, the percentage of jobs in manufacturing, construction, and mining has dropped from 40% to 13%, eliminating some of the highest paying jobs for high school graduates.

The Result

The dreams of Americans obtaining the basics of a middle-class lifestyle, such as owning a home, sending their kids to college, and obtaining affordable housing, have become more and more out of reach for the average household.
Total Household Income Growth, 1970-2023
(Current Year US Dollars)
Top 5% Incomes

1,481% Growth

Middle 60% Incomes

879% Growth

Bottom 20% Incomes

786% Growth

Total Household Cost Growth, 1970-2023
(Current Year US Dollars)
Home Purchase Price

1,717% Growth

College Tuition & Fees

2,177% Growth

Health Care

3,078% Growth

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The city of Dresden, Germany was significantly bombed during World War II, killing around 25,000 people. Since being decimated in the 1940’s, Germany has rebuilt to become one of the leading countries in the world in output per person (GDP per capita, PPP adjusted) and net foreign ownership of assets (Net International Investment Position/GDP).

In contrast to Germany, the United States and its citizens carry enduring trade and foreign asset ownership imbalances, with much of it’s manufacturing core being decimated by sending production overseas.  Almost every American city has an industrial zone or property abandoned due to the loss of manufacturing to foreign countries. We can help cities and our industrial core rebuild, rebuilding our middle class at the same time, by creating incentives that encourage domestic production instead of production abroad.

U.S. Goods Trade Deficit Sources
Historical trade deficit numbers are located in the Bureau of Economic Analysis’s Investment Position Tables for 1960 through 1986 and in the Census Bureau’s Trade in Goods with World, Not Seasonally Adjusted for 1987 through the most recent month.  These totals are summed to calculate the cumulative deficit for goods (without services).  Cumulative as well as monthly deficits for the U.S. with individual countries are obtained from the Census Bureau’s Trade in Goods with World for 1985 through present day.  Pre-1985 numbers contribute a negligible amount to cumulative totals for any one country.
Major U.S. Trade Deficits by Product Source
Trade deficits for the U.S. by product are obtained from the World Integrated Trade Solution.
Pay and Benefits for Non-Supervisory Workers Sources
Income data for each manufacturing and service industry was taken from the Bureau of Labor Statistic’s Industries at a Glance. Nonsupervisory weekly hours and wages were used to calculate annual income estimates. While some percentage will have bachelor’s degrees or higher, the predominate number of non-supervisory workers in these industries possess let than a bachelor’s degree. Benefit data is taken from Employer Costs for Employee Compensation provided by the Bureau of Labor Statistics. Benefits for each industry are calculated by subtracting the total benefits provided by the legally required benefits.
Income Distribution Data Sources
Income data is taken from Table H-3. Mean Income Received by Each Fifth and Top 5 Percent of All Households from the Current Population Survey’s Annual Social and Economic Supplements, U.S. Census Bureau.  Average income is reported for three groups, the top 5%, Middle 60%, and Bottom 20% of income earners.  Income is adjusted for inflation in US Dollars for the year the data is listed using the annual Consumer Price Index from the Federal Reserve Bank of Minneapolis.
Household Expense Data Sources
Home Purchase Price is recorded as the Median Sales Price of Houses Sold for the United States and obtained at FRED (Federal Reserve Economic Data).  Prices are adjusted for inflation in US Dollars for the year the data is listed using the annual Consumer Price Index (CPI) from the Federal Reserve Bank of Minneapolis.  Health costs are taken from “NHE Summary, including share of GDP, CY 1960-<most recent year>” under National Health Expenditure Historical Data from the Centers for Medicare & Medicaid Services (CMS.gov), adjusted for inflation using CPI, and calculated per household using Total Households, TTLHH, from FRED.  Education Data is obtained from Table 330.10, Student Charges for 1963-64 through the year the data is listed from the National Center for Education Statistics and adjusted from academic to calendar years.