Middle-Class Employment Trends
While many analysts bemoan the decline of the middle class, the reality is that the middle class isn't declining any more than the poor or the affluent.
As highlighted in our profile of the so-called "class affluent,"1 medium-term trends have made it harder for the "working affluent" — including business owners, managers, lawyers, and physicians — to make the leap beyond a household income of $200,000.
Even more stressful, many of the formerly-affluent have fallen below the $100,000 per year mark. And even those making between $200,000 and $1 million a year often find themselves squeezed by the overhead of multiple houses and other luxuries that once seemed like necessities. That's why you'll often see them shopping at Sam's and Costco rather than Nordstrom and Whole Foods.
At the other end of the spectrum, poor Americans increasingly compete with the long-term unemployed segment of the middle class for charitable services and part-time seasonal jobs. But, because of the social safety net, their lives have changed less than those of others in society.
The middle class gets lots of attention because it is such a large group, representing about 70 percent of the population. Furthermore, many of those who are now either affluent or poor still identify with it because that's where they started out.
More importantly, middle-class Americans have suffered not only falling home values, unemployment, and wage cuts, but they've also been shocked by the perception that "the rules have changed."
Since World War II, the American middle class has been the "locus of stability and certainty." There was an unwritten promise that those who graduated from high school, obeyed the law, and avoided risky personal behaviors would land in secure jobs paying enough to fund a comfortable home, one or more automobiles per adult, and annual vacations. Job benefits usually included health insurance and retirement benefits that supplemented the government's Social Security and Medicare promises.
However, the rise of globalization in the '90s put an end to that guarantee. With instant online access to literate workers in China, India, Taiwan, and other countries who were paid a fraction of what Americans were used to earning, many Americans found it hard to compete.
Today, most of the jobs that can be cost-effectively performed in Asia or Latin America have moved there, shrinking the pool of jobs that middle-class Americans are qualified to perform. Meanwhile, those American companies that have kept jobs in the U.S. have been able to do so only by dramatically increasing their technological sophistication; that's why American manufacturers now produce more goods than in 1980 with a fraction of the workforce...
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