It's a very multi-faceted problem. This[1] graph about the Chinese vs Western middle class is very telling. The world is equalizing due to globalization, and as they say, equality feels like oppression (in this case depression) to the privileged.
There's also the fact that as urbanization continues, real estate in big cities will keep raising in price. People will see real estate more and more as an investment. This completely chokes the housing market since everyone overpays, everyone thinks 'fuck you, I want to get mine', housing becomes unaffordable for starters.
Then there's automation which also hits the middle class a lot. A lot of jobs are cheaper fulfilled by manual labor than automation, and difficult jobs are yet out of the reach of machines.
Add to that the fact that ever more wealth keeps getting stuck at the top (especially the 0.1%) and its a very bad cocktail.
A good beginning to fix it would be an inheritance tax of 100% with a cutoff at ${million} (1 million? 10 million? whatever is reasonable but doesn't give your kids a crazy advantage). Assets would count towards this. Right now we're in a sort of pseudo-feudal system where once you're over a certain amount of wealth, your family/kin is set for life. I'm not against working hard and leaving something for your kids, but there should be limits.
A negative income tax (a sort of basic income light) would also help, as there would always be a proper fallback should you ever have bad luck. It also moves a lot of leverage from employers to employees.
Cities (especially big cities) should no longer seek to extract the maximum amount of tax per piece of ground (resulting in only expensive developments) but should have policies that aim for maximum societal gain: this means building housing to the exact class percentages of the population. 10% rich, 40% middle class and 50% working class in the country? That's what cities should aim for.
Universities should be public and admit students purely on merit. No legacy systems, no positive discrimination. However, I am okay with limiting foreign students (say 10-20% max).
Even with all these things I am probably missing a ton of pitfalls. As I said, its an extremely complex, multi-faceted problem.
"Cities (especially big cities) should no longer seek to extract the maximum amount of tax per piece of ground (resulting in only expensive developments) but should have policies that aim for maximum societal gain: this means building housing to the exact class percentages of the population. 10% rich, 40% middle class and 50% working class in the country? That's what cities should aim for."
This. Unfortunately it's fallen out of fashion... everyone wants to become the richest city in the world, even if all it means is that you will price yourself out of it, literally delivering it in the hands of the few 0.1% for whom it's just another new toy to play...
