Magazine article publishing and editorial practices

Newspaper/Magazine Article From the Wall Street Journal, The New York

Times, the Financial Times or the Economis

The selected article is called "How Eroding the Middle Hits Economic Growth" and it was written by Nelson D. Schwartz for The New York Times, on February 5, 2014. The article argues that the U.S. GDP and economic growth are affected by the fact that income seems to be concentrating, more and more, towards the wealthier category of Americans, rather than for the middle class, which was traditionally the engine for economic growth in the United States.

Starting with the thesis that income has migrated from the middle class to wealthier classes, the article argues that this migration of income has negatively affected consumption rates and the GDP. It cites reputed economist Alan Krueger, one of Obama's advisers on economic matters, who argued that if income gains had been more evenly distributed, annual consumption would be higher with as much as $100 billion, with a direct translation in a GDP with 3.5% higher. The article also shows that, after the economic recession and crisis of 2008-2009, consumer spending has not even reached the levels it had in 2000, let alone the higher rates of the 1990s, a period of economic boom.

The article relates to GDP and economic growth since it looks at one of the components of the GDP and analyzes how this has evolved in the past, where it is in the present and how it is likely to change in the future. As known, the GDP is calculated by adding consumption, government spending, spending on capital and the nation's net exports. As mentioned, the article looks at consumption and the factors that affect the way consumption varies, primarily the shift in income towards wealthier classes.

According to the article, since this is a trend that has been occurring for decades now, it is probably likely to continue in the future, potentially growing even more obvious and persistent. According to the article, the concentration of income towards the wealthier classes will lead to decreasing consumption levels and decreasing economic growth rates. Obviously, it remains to be seen whether such an event will eventually lead to a correction on the market, whereby income will shift back towards the middle -- the article does not conclude in any way about this potential outcome.