The mid­dle class rocks yet again

The Saratogian (Saratoga, NY) - - FRONT PAGE - Robert Samuelson Colum­nist

The mid­dle class is back — or so it seems.

That’s the mes­sage from the Cen­sus Bu­reau’s lat­est re­port on “In­come and Poverty in the United States.” The news is mostly good. The in­come of the me­dian house­hold (the one ex­actly in the mid­dle) rose to a record $59,039; the two-year in­crease was a strong 8.5 per­cent. Mean­while, 2.5 mil­lion fewer Amer­i­cans were liv­ing be­neath the gov­ern­ment’s poverty line ($24,563 for a fam­ily of four). The poverty rate fell from 13.5 per­cent of the pop­u­la­tion in 2015 to 12.7 per­cent in 2016.

The Cen­sus re­port re­in­forces Gallup polls — re­ported here a few weeks ago — that Amer­i­cans have re-em­braced their mid­dle­class iden­ti­ties. The Great Re­ces­sion made peo­ple feel eco­nom­i­cally vul­ner­a­ble and be­trayed. Nearly half of Amer­i­cans self-iden­ti­fied as be­long­ing to the “work­ing and lower classes” — a huge shift from the nearly two-thirds that, be­fore the re­ces­sion, had clas­si­fied them­selves as “mid­dle class.” Now, Amer­i­cans have re­verted to tra­di­tion. Al­most two-thirds again call them­selves mid­dle class, Gallup finds.

Peo­ple are re­as­sured, be­cause the econ­omy’s steady, if plod­ding, per­for­mance seems to em­body mid­dle-class virtues: or­der, pre­dictabil­ity and hard work. The crit­ics of the re­cov­ery as slow and dis­ap­point­ing (me and many others) may have missed the point. By plod­ding along for eight years, the re­cov­ery al­lowed peo­ple to re­claim jobs and con­fi­dence. The Cen­sus cal­cu­lates that there were 14 mil­lion more year-round full­time work­ers in 2016 than in 2009, the re­ces­sion’s low point.

Still, the mid­dle-class re­vival story can be over­done. The “In­come and Poverty” re­port is crammed full of sta­tis­tics that de­fine and speak to some press­ing na­tional prob­lems. Not all the ev­i­dence is up­beat. Here are three sober­ing take­aways.

First, men’s me­dian wages for full-time, year-round work have stag­nated.

As as­tound­ing as it seems, men’s me­dian earn­ings haven’t re­ally in­creased since the mid1970s. Here are the fig­ures. In 2016, the me­dian was $51,640 for year-round, full-time work­ers. In 1975, the com­pa­ra­ble fig­ure was $51,766. (Note: All dol­lar amounts are ad­justed for in­fla­tion and ex­pressed in 2016 money. Again, the me­dian wage is the one ex­actly in the mid­dle of the dis­tri­bu­tion — half are above, half be­low.)

The causes of the stag­na­tion aren’t clear, but the ero­sion of well-pay­ing blue-col­lar jobs has been blamed on many forces: the de­cline of unions and the loss of fac­tory jobs; au­to­ma­tion and new tech­nolo­gies; trade and in­ter­na­tional com­pe­ti­tion. A new the­ory is de­mo­graph­ics: As older baby boomers re­tire, they’re re­placed by younger work­ers at lower wages.

What­ever the ex­pla­na­tion, women seem less af­fected. In­deed, their wages have out­paced men’s, re­flect­ing the open­ing of bet­ter-paid jobs once off-lim­its to women. In the 1970s, women’s earn­ings av­er­aged about 60 per­cent of men’s; now they’re 80 per­cent. Whether the re­main­ing 20 per­cent re­flects dis­crim­i­na­tion or the dif­fer­ent ca­reer paths of men and women is a sub­ject of dis­pute.

Sec­ond, the up­per mid­dle class is flour­ish­ing — but not the lower classes.

If you take $100,000 as a crude thresh­old of be­ing up­per mid­dle class, then the share of house­holds above the thresh­old was about a quar­ter (27.7 per­cent to be ex­act) in 2016, up from about a fifth (19.4 per­cent) in 1990. Black house­holds also ex­pe­ri­enced ris­ing in­comes that boosted them into the up­per mid­dle class, though at lower lev­els. In 2016, one in seven black house­holds (14.9 per­cent) had in­comes ex­ceed­ing $100,000, up from one in 12 (8.6 per­cent) in 1990.

By con­trast, up­ward move­ment at other in­come lev­els was slight. Take the new record me­dian house­hold in­come of $59,038 as an ex­am­ple of what’s hap­pen­ing in the mid­dle of the in­come dis­tri­bu­tion. If in­comes were ris­ing rapidly, there would be a large gap between to­day’s in­comes and those of the late 1990s. There isn’t. To­day’s in­come is less than 1 per­cent higher than the pre­vi­ous record of $58,665 achieved in 1999.

Third, al­most three-quar­ters of the rise of Amer­i­cans liv­ing in poverty since 1990 re­flects in­creases in His­panic poverty — in­creases linked to im­mi­gra­tion, whether le­gal or il­le­gal.

There’s no ta­ble with this fig­ure; but it re­flects sim­ple arith­metic. Let’s do it. From 1990 to 2016, the num­ber of peo­ple liv­ing be­low the gov­ern­ment’s poverty line rose from 33.6 mil­lion to 40.6 mil­lion, a gain of 7 mil­lion. Over the same years, the His­pan­ics in poverty in­creased from 6 mil­lion to 11.1 mil­lion, a gain of 5.1 mil­lion and 73 per­cent of the to­tal 7 mil­lion boost.

The mes­sage is mixed. It’s true that we have more prob­lems than so­lu­tions. Im­mi­gra­tion, stag­nant wages and house­hold in­equal­ity are mere ex­am­ples. But the mid­dle-class come­back, sketchy and pos­si­bly tem­po­rary, in­spires hope. Amid much pes­simism, some­times events sur­prise us for the bet­ter.

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