Demand-side Examples
- Postwar United States (1945–1973, Growth)
Rising wages, strong unions, and high marginal tax rates on the wealthy helped create a booming middle class and a golden age of American capitalism. Consumer demand drove industrial growth, and the wealth was broadly shared. - Sweden and Denmark (Modern Nordic Model, Growth)
These countries maintain high equality, universal services, and strong worker rights. Their economic success is fueled by high middle-class spending power and social stability, proving that strong safety nets don’t kill growth—they support it. - California (2010s–Present, Growth)
With higher minimum wages and progressive taxes, California boasts the world’s 5th largest economy. Its large middle class supports vibrant tech, entertainment, and service industries, despite high living costs. - Minnesota (2000s–Present, Growth)
Known for relatively strong social services, good education, and labor rights, Minnesota has low poverty and high productivity. A healthy middle class keeps the state economically resilient and civically engaged. - Germany (2000s–Present, Growth)
Germany blends capitalism with worker protections and strong vocational training. Its strong middle class helps drive exports and domestic consumption, keeping unemployment and inequality relatively low. - South Korea (1980s–2000s, Growth)
Once poor, South Korea invested heavily in education and industrialization while building a robust middle class. Rising incomes led to strong domestic demand, helping transform it into one of the world’s leading economies. - United Kingdom (2010s, Negative)
Austerity policies cut spending on health, education, and welfare while wages stagnated. Inequality rose and public services suffered, weakening the middle class and slowing recovery after the 2008 crisis. - Chile (2000s–Present, Negative)
Despite economic growth, Chile’s wealth is highly concentrated, with poor public services and a weak middle class. This inequality sparked massive protests in 2019, exposing how growth without inclusion breeds instability. - West Virginia (2000s–Present, Negative)
Low wages, poor healthcare access, and underinvestment in education have shrunk the middle class. The state struggles with low economic mobility, brain drain, and sluggish growth, despite federal aid. - Japan (1990s–Present, Negative)
Japan’s long economic stagnation has been partly attributed to demographic decline and falling middle-class income. As consumer demand weakened, even massive monetary stimulus failed to restore strong growth—highlighting the danger of a squeezed middle class.