NCPA - National Center for Policy Analysis

THE MYTH OF MIDDLE-CLASS JOB LOSS

October 25, 2007

The view that the economy has failed the middle class is widespread.  The outsourcing of jobs (particularly manufacturing) to low-wage countries is the latest culprit with polemicists from all sides find it irresistible to blame expanding trade for middle-class decline, says Stephen J. Rose, senior economic fellow at the Progressive Policy Institute.

In reality, there has been substantial growth of middle-class jobs over the past 30 years. Take the female population, says Rose:

  • After increasing earnings 150 percent to adjust for inflation, as recently as 1979, 61 percent of female workers were in jobs that paid less than $25,000, and only 3 percent earned more than $50,000 a year.
  • By contrast, more than 36 percent of new jobs that opened since 1979 for women pay more than $50,000 and only 17 percent pay less than $25,000.

For men, the change in employment since 1979 has not been quite as clear-cut, or as positive:

  • There has been a tremendous growth in the number of men in high-paying jobs; in 1979, just 10 percent of male workers earned above $75,000, while fully 34 percent of new jobs since 1979 have paid this amount or more.
  • However, there was also growth in the share of male workers earning less than $25,000 a year, from 23 percent in 1979 to 36 percent by 2005.
  • This rise of low-paying jobs hit less-educated men particularly hard; for those with just a high school diploma, 87 percent of the new jobs paid $25,000 or less.

Thus, for three-quarters of the workforce economic growth translated into earnings gains, showing that the economy can expand and provide more good jobs as long as workers have the education and training required to succeed, says Rose.  

Source: Stephen J. Rose, "The Myth of Middle-Class Job Loss," Wall Street Journal, October 24, 2007.

For text:

http://online.wsj.com/article/SB119318171973969059.html

 

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