Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

American middle class shrank in 20 years

Mike McCabe's neighbors in rural Gillespie, Ill., consider him lucky. After being out of work for a year, he landed a job in January making cardboard boxes at a nearby Georgia-Pacific plant for $19.60 an hour.

He would agree with them, except that his previous job in a steel mill near St. Louis paid $28 an hour. "I've had to rethink my whole life to make ends meet on what I'm now making," McCabe said. "The middle class is struggling for sure, and almost anybody in my position will tell you that."

Middle-class Americans have fared worse in many ways than their counterparts in economically advanced countries in Western Europe in recent decades, according to a new study by the Pew Research Center.

What is more, as McCabe's experience suggests, the Pew study found a broader contraction of the American middle class, even as the ranks of the poor and the rich have grown.

"Compared with the Western European experience, the adult population in the U.S. is more economically divided," said Rakesh Kochhar, associate director for research at Pew. "It is more hollowed out in the middle. This speaks to the higher level of income inequality."

Households that earned from two-thirds to double the national median income were defined as middle income in the Pew study; in the United States that translated into annual income of $35,294 to $105,881, after taxes, in 2010.

A shrinking middle class is not necessarily cause for alarm, if the reason for the contraction is that more people are moving up the income ladder, said David Autor, a professor of economics at the Massachusetts Institute of Technology.

The proportion at the top did rise, but so did the proportion at the bottom, rising to 26 percent from 25 percent. That is much more worrisome, said Autor, who was not involved with the Pew study. Moreover, the middle-income group was smaller — and the groups at either extreme larger — in the United States than in any of the 11 Western European countries studied.

The United States, including the middle class, has a higher median income than nearly all of Europe, even if the continent is catching up. The median household income in the United States was $52,941 after taxes in 2010, compared with $41,047 in Germany and $41,076 in France.

Although the cutoff of the study, 2010, may have highlighted weak income gains because it was in the immediate aftermath of the Great Recession, Kochhar said that was not enough to alter the study's findings.

"It's a clear trend that the middle class in the U.S. is shrinking and not keeping up financially with the upper-income group," he said. "There is an aura of redistribution of income from middle income to upper income."

The study acknowledges that "middle class" can connote more than just income — like a college education, white-collar work, economic security, homeownership or even self-image — but for the purposes of the study, it was defined by income.

Whether in Europe or the United States, technological change and globalization mean that people who can adapt and learn new skills can reap bigger rewards, Kochhar said.

Since founding LaSalle Network, a staffing company based in Chicago, with two employees nearly 20 years ago, Tom Gimbel has watched revenues grow to a projected $70 million this year.

"I know a lot of people who have done much better in the last five years," he said. "I have people working for me who made $35,000 to $60,000 a few years ago and are earning $60,000 to $150,000 now."

Gimbel, who grew up in a comfortable Chicago suburb, has seen his own fortunes improve. "We didn't want for anything, but my dad wasn't rolling in money," he said. "I've succeeded beyond where my parents were."

On both sides of the Atlantic, the pressure on the middle class is translating into frustration with the political establishment and distrust of the elites.

Like his father and uncle, McCabe worked at the U.S. Steel mill in Granite City, Ill. But after the plant was idled in late 2015, he looked for a new job rather than waiting to be called back if the economy improved.

As a result, McCabe voted for Donald J. Trump in the presidential election last year, even though he grew up in what he calls a staunchly Democratic home. "My dad is probably rolling over in his grave," he said.

"But I liked Trump's message that he was going to help the middle class and get the jobs back," McCabe said. "I was amazed that he won, and sat up all night watching."

"You can only wait so long, and your unemployment runs out and you run out of choices," he added. "I'm divorced with no kids. For people with kids, I can only imagine how tough they got it."

© 2017 New York Times

American middle class shrank in 20 years 05/04/17 [Last modified: Friday, May 5, 2017 1:29pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, New York Times.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Seeking change, Tampa Mayor Bob Buckhorn goes outside for new fire marshal

    Fire

    TAMPA — Sarasota County Fire Marshal John Reed has been hired as Tampa's new fire marshal, and Mayor Bob Buckhorn said he wants Reed to shake up Tampa Fire Rescue's building inspection bureau.

    Sarasota County Fire Marshal John Reed, 53, will make $118,310 a year as the new fire marshal for the city of Tampa. [City of Tampa]
  2. Ruth: Trump is no Boy Scout in speech to scouts

    Columns

    It could have been worse. At least the Boy Scouts of America didn't invite Dennis Rodman to address its 19th jamboree to discuss American foreign policy with North Korea and the art of nose piercings.

    President Donald Trump addressed the Boy Scouts’ national jamboree in Glen Jean, W. Va.
  3. PSTA, wary of future cuts, keeps property tax rate steady

    Local Government

    ST. PETERSBURG — The Pinellas Suncoast Transit Authority stands to lose $2 million a year if voters approve an expansion to Florida's homestead property exemption on the 2018 ballot.

    One of The PInellas Suncoast Transit Authority's hybrid busses. The PSTA's governing board voted Wednesday to maintain the current property tax rate. [JAMES BORCHUCK  |   Times]
  4. Rays power way to 5-1 win over Orioles on eve of crucial road trip

    The Heater

    St. PETERSBURG — The Rays didn't get many hits in the early going Wednesday, but they got a couple that went a long way and that was enough to beat the Orioles, 5-1.

    Rays right fielder Steven Souza Jr. (20) hugs catcher Jesus Sucre (45) after Souza's solo home run in the seventh inning. [WILL VRAGOVIC   |   Times]
  5. Man accused of sexually assaulting 5-year-old girl

    Crime

    ZEPHYRHILLS — Pasco sheriff's deputies have charged a Zephyrhills man with sexually assaulting a 5-year-old girl in his care.

    Brett Campbell [Photo Courtesy of the Pasco County Sheriff's Office]