The Middle Class is inserious trouble, world-wide. And this current recession has magnified how serious the problem is, even though there are differences among Western countries and third world nations.

Steven Pressman, an economist, reports in his book, The Decline of the Middle Class: AnInternational Perspective, that from 1980 to 2000 when we experienced explosive economic growth, most western nations saw their middle class shrink. Pressman says that most of shrinkage was a result of people falling into the poverty class and a few up into the higher bracket. And the experience in the U.S. has been vastly different that that of Canada and the Scandinavian countries.

Let's take a look at the differences.  First the U.S.

Elizabeth Warren of Harvard Law School in her testimony before theSenate Finance Committee in May, 2007 reported that over the past 30 years, most people have seen only modest salary increases in America, an increase of about 10% over 29 years. Since the 1970s, the income gaps have been rapidly widening. In the U.S., today’s median-earning family is making a lot more money than their parents did a generation ago.  But, in fact, the typical man working full-time today, after adjusting for inflation, earns about $800 less than his father earned back in the early 1970s. When wages quit increasing, how did family incomes rise? Warren says because of women in workforce. All the growth in family income came from adding a second earner.

But where did all the money go? Warren says the story is all about over-consumption, about families spending their money on things they don’t really need. It is about going deep into debt to finance consumer purchases.

Is the situation any different in Canada, Europe or developing nations? Generally speaking, the middle class has fared a lot better in Canada, Scandinavian countries and Germany than in the U.S. or developing countries where the middle class is almost non-existent. Yet the same disturbing trends are there as in the U.S.

 What's the difference? Pressman says one thing: government. All the handouts, tax benefits, subsidies and rebates that transfer money into middle-class pockets. Without government help, Canada's and Europe's middleclass would be endangered. Presssman says that in a modern global economy, the middle class can only be self-sustaining with active government programs,because the free market produces great inequalities of income. He says that contrary to popular belief, the countries that are doing well are the ones that have robust tax-and-spend programs.  And an interestingcaveat to Pressman's assertion is that the countries that are helping their middle class the most are not doing so at the expense of the wealthy but at the expense of the poor.

The survival of the middle class is reliant on a thriving and open market economy,but its size and sustainability are equally dependent on the tax-and-spend mechanisms of the modern welfare state--which it turns out, are even more important in globalized, high competition economies.

There was a time when the middle class occupied a wide and comfortable place in our society. Until the last decade, that status could be reached without extreme grasping, and many people enjoyed a comfortable lifestyle. It meant a stable job, a house, two cars for two garages, a pension or retirement savings plan and lots of discretionary spending. That probability is now in jeopardy. It maybe that having it all is what you shared in common with your neighbors, but you may soon be a member of a disappearing species.

Ray Williams is Co-Founder of Success IQ University and President of Ray WilliamsAssociates, companies located in Phoenix and Vancouver, providing leadership development, personal growth and executive coaching services. Ray is a leadership trainer and executive coach, platform speaker and author. www.successiqu.com