Photo: DonkeyHotey
Over the past few days I’ve been reading a very interesting article in The Atlantic. Yes, I said “over the past few days,” and I’m convinced that no human could consume an article this long in a single sitting. The Atlantic is one of the oldest publications in the country (over 150 years) and has long been known for generating solid long-form journalism. I get the appeal of long-form, as it allows the author to really dive deep on certain issues, and this is especially valuable when covering complicated issues. But, good god, this was a long one. Pretty sure I’ve read shorter Hemingway books.
The article was, “Can the Middle Class Be Saved?” and it has a ton of employment news that I wanted to share. Rather than send out a tweet recommending that you read this just-a-hair-under-10,000-words article, I thought I’d provide a synopsis, a few pertinent highlights, and my comments throughout.
The main thrust of the article is that the “Middle Class,” a term I kind of hate because everyone thinks they’re middle class even though most aren’t – so it tends not to really mean anything or anyone, is shrinking dramatically. This erosion is due to a large-and-growing income disparity, with a ton of people becoming either super rich or quite poor. This is a trend that Don Peck, the author, says was under way for quite a while but was exacerbated by the recession.
One of the most salient features of severe downturns is that they tend to accelerate deep economic shifts that are already under way. Declining industries and companies fail, spurring workers and capital toward rising sectors; declining cities shrink faster, leaving blight; workers whose roles have been partly usurped by technology are pushed out en masse and never asked to return.
A 2010 Pew study showed that the typical middle-class family had lost 23 percent of its wealth since the recession began, versus just 12 percent in the upper class.
Benefits of a College Degree
While hardly the employment lock that it used to be, a college degree is still a huge factor in whether or not one finds lasting employment. You might have the entrepreneurial disease, might have heard college isn’t worth it, or you might just be disinclined to go to college. Either way, you better have a damned good reason for not going and a damned good plan for what you’re going to do instead of college. The employment stats for those without a degree are simply abysmal when compared to those with one.
In March, the national unemployment rate was 12 percent for people with only a high-school diploma, 4.5 percent for college grads, and 2 percent for those with a professional degree. [Note from Tim: overall unemployment was 8.8% in March 2011. Check this post out to read more about what “unemployment” means.]
Without doubt, it is vastly better to have a college degree than to lack one. Indeed, on a relative basis, the return on a four-year degree is near its historic high. But that’s largely because the prospects facing people without a college degree have been flat or falling.
But most people in America still don’t have a college degree – not even close.
If you live and work in the professional communities of Boston or Seattle or Washington, D.C., it is easy to forget that nationwide, even among people ages 25 to 34, college graduates make up only about 30 percent of the population.
The true center of American society has always been its nonprofessionals—high-school graduates who didn’t go on to get a bachelor’s degree make up 58 percent of the adult population. And as manufacturing jobs and semiskilled office positions disappear, much of this vast, nonprofessional middle class is drifting downward.
Men are getting clobbered in this economy
Peck describes in extensive detail how men are suffering more joblessness in this economy than women. This is largely because the industries that have been hit particularly hard in the recession – housing, manufacturing, and other blue collar jobs – have historically been dominated by men. This is a trend The Atlantic has reported on before, and another fascinating (albeit, again, lengthy) piece on the subject is The End of Men, where the author asks “what if the struggle for equality isn’t the end point? What if modern, postindustrial society is simply better suited to women?” Check it out – worthwhile.
Back to the Peck piece, here’s an excerpt where he touches on why men’s struggles are disproportionate to women’s.
The troubles of the nonprofessional middle class are inseparable from the economic troubles of men. Consistently, men without higher education have been the biggest losers in the economy’s long transformation (according to Michael Greenstone, an economist at MIT, real median wages of men have fallen by 32 percent since their peak in 1973, once you account for the men who have washed out of the workforce altogether). And the struggles of men have amplified the many problems—not just economic, but social and cultural—facing the country today.
“Real median wages” means wages adjusted for inflation, and I assume that the shocking 32% drop he mentions is only for men without higher education because he references that particular group in the previous sentence. Either way, a 32% drop is staggering. Peck goes on:
During the aughts, construction provided an outlet for the young men who would have gone into manufacturing a generation ago. Men without higher education “didn’t do as badly as you might have expected, on long-run trends, because of the housing bubble.” But it’s hard to imagine another such construction boom coming to their rescue.
The F-ing Housing Bubble. Again.
As if the housing bubble burst didn’t reveal enough problems in the US economy (insane lending practices, insane government policies that mandated even more insane lending, convoluted and basically make-believe trading instruments, etc.), it also revealed other employment-related problems.
Median incomes declined outright from 1999 to 2009. For most of the aughts, that trend was masked by the housing bubble, which allowed working-class and middle-class families to raise their standard of living despite income stagnation or downward job mobility. But that fig leaf has since blown away. And the recession has pressed hard on the broad center of American society.
So incomes fell over a 10 year span but no one noticed because, thanks to the housing bubble, everyone’s standard of living was rising. Makes it easy to see how a lot of these trends had been in place for years, setting up many people to get absolutely crushed when the economy went south.
Overall, I really liked the Peck piece. One complaint I had was that he provides a ton of data but rarely includes a citation or reference of any kind. I know it’s not an academic journal article, but mentioning where certain stats came from would be helpful. I also don’t exactly agree with some of his prescriptions toward the end, but that’s not important here. Those criticisms aside, I thought the piece was really insightful and brimming with interesting data. If you’re so inclined and have the time, it’s worthwhile to read the whole thing. If not, I hope you enjoyed my summary and comments. I’d love to hear what you think below.
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