When middle class isn't
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A primary complaint about the current U.S. economy has been the hollowing out of "middle-skill jobs" — the type of work that people with high school educations and substantial training could do and earn a "middle wage."
Be smart: But even if such jobs were restored, it would not mean a revival of America's battered middle class. That's because middle-wage jobs largely do not pay a middle-class salary.
Confused? So were we.
What's happening: Since the early 1970s, the American middle class has shrunk to about half of all families, from about 60%, according to Pew, a trend that's taken on more importance since the financial crash, becoming a substantial feature of the nation's broad disaffection.
- Digging into the economic fallout, study after study has noted the deindustrialization of numerous states, such as Ohio, Pennsylvania, Michigan and Wisconsin, resulting in tens of thousands of job losses.
- But while many of those jobs once paid middle-class wages, the collapse of unions and other factors have much-reduced the pay. Now, the same jobs are said to pay "middle wages," but do not suggest a ladder to the actual middle class.
An example: In 1972, the average American union carpenter earned the current equivalent of $33.55 an hour — about $70,000 a year. Today, a carpenter earns $20.23 on average, about $42,000 annually, according to Indeed.
- The difference in dollar terms is of course enormous. But it's arguably more in terms of what it buys. In the 1970s, it was a ticket to the middle class, with the then-accouterments, including a home, a reasonably new car, and possibly even a summer vacation.
- Today's average carpenter salary is at the very bottom of the middle class, which begins at about $40,000, according to Pew, and does not typically put a worker in a position to purchase the 1970s middle-class lifestyle.
The background: In 1948, unionized auto industry workers achieved a major breakthrough — an agreement from the industry on a "basic wage." Over the subsequent decades, the symbol of the basic wage was $20 an hour, a threshold that spread, representing the bottom of the union wage ladder.
- By 1979, 23% of all U.S. hourly workers earned at least $20. Then it began dropping, to 18% in 1989 and 16% in 2000.
Today, economists and other experts typically call $15 an hour "middle wage;" the top of the middle-wage scale can be a little over $20. Since the financial crash a decade ago, some three-quarters of new jobs have paid around $15 or less an hour. As of 2015, 42% of all workers earned $15 or less per hour, according to the National Employment Law Project.
- Why it matters: Language matters. Use of the phrase "middle wage" projects the impression of a middle-class job. That they are not suggests a degradation of what it means to be middle class — now, to be middle class, you must earn a "high wage."
- "I would expect that most people that earn $15 an hour, especially if they are in higher-cost areas and have a family to support, are not able to live what they believe to be a middle class life given the increased costs for housing, education, and health care, and the fact that these costs are increasing far faster than wages," said Al Fitzpayne, who runs the Future of Work Initiative for the Aspen Institute.
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