The Disappearing Middle Class

Here is an interesting graph from a report from the Center for American Progress:

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The picture is one of erosion of job opportunity for the so-called "medium skill" jobs. There has been growth in high skill and low skill, but the meat-and-potatoes jobs for the middle class are evaporating.

The following graphic from the report shows that only the high end beyond 4 years of "basic" college education skills are getting the pay raises:

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This on top of a lingering, probably ten year long "job recession" means that the middle class in America will be under great stress. This is a tragedy. Alarm bells should be ringing in the Obama administration, but they aren't. Instead, the US is poised to re-elect a Republican Congress which will expedite the hollowing out of America.

Here's a bit from the conclusion of this report:

Although the U.S. labor market will almost surely rebound from the Great Recession, this paper presents a somewhat disheartening picture of its longer-term evolution. Rising demand for highly educated workers, combined with lagging supply, is contributing to higher levels of earnings inequality. Demand for middle-skill jobs is declining, and consequently, workers that do not obtain postsecondary education face a contracting set of job opportunities.

Perhaps most alarmingly, males as a group have adapted comparatively poorly to the changing labor market. Male educational attainment has slowed and male labor force participation has secularly declined. For males without a fouryear college degree, wages have stagnated or fallen over three decades. And as these males have moved out of middle-skill blue-collar jobs, they have generally moved downward in the occupational skill and earnings distribution.

This is pretty bleak.

I do know that just as I graduated from high school I was told that I was part of a "golden generation" that would have it far better than any previous generation. The reality turned out quite differently. The Baby Boom meant there were too many new entrants into the job market, the response by the early 1980s was to create a two-tier wage scheme. The "old timers" got to keep their fat salaries while the younger workers were started on a lower wage with a longer climb. In short, the wages feel under the oversupply of young workers. Then the economy soured in the early 1970s with only a modest recovery in the 1980s (despite all the touting of "morning in America" by Reaganites) and finally a good job market by the end of the 1990s. But then things fell apart with two big economic bubbles bursting (the web/technology in 2000 and the financial/housing in 2008). So the generation now entering the marketplace are being told to "gird your loins" for a bleak prospect. I only hope that the future ends up as wrong for them as it was for my generation. Hopefully productivity and new technology will come out of nowhere and lift all economic boats. If only!