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September, 1986, Vol. 109, No.
9
The declining middle class:
a further analysis
Some observers argue that jobs in the U.S. economy are shifting from middle paying to low and high paying. Some attribute the shift, or bipolarization, to declining employment in smokestack industries and growth of high tech industries, low paying occupations, and service-producing industries.1 Others attribute the shift to the movement of the baby-boom generation into the labor market.2 Robert Lawrence of The Brookings Institution found bipolarization occurring between 1969 and 1983, and cited the changing age distribution of the labor force as the most compelling explanation.
Other observers argue that, while the events used to explain the bipolarization might be occurring, occupational shifts are not responsible. Neal Rosenthal of the Bureau of Labor Statistics looked at median weekly earnings by occupation and found a slight shift away from the middle paying jobs between 1973 and 1982.3 More importantly, however, he found a decline in the proportion of lower paying jobs, which does not support the notion of bipolarization.
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1 R. Kuttner, "The Declining Middle," The Atlantic Monthly, July 1983, pp . 60-72; L. S. Thurow, "The Disappearance of the Middle Class," The New York Times, Feb. 5, 1984, p. F3 ; B. Steinberg, Deindustrialization and the Two Tier Society (AFL-CIO, Industrial Union Department, 1985); and M. Harrington and M. Levinson, "The Perils of a Dual Economy—A Growing Trend in the American Occupational Structure," Dissent, Fall 1985, pp . 417-26 .
The intellectual stimulus to the debate initially came from B. Bluestone and B. Harrison, The Deindustrialization of America (New York, Basic Books, Inc., 1982). Proponents of the disappearing middle class have since construed the decline in employment in the smokestack and goods-producing industries along with a simultaneous growth in the high tech and service-producing industries as synonymous with a bipolarization of the earnings structure. They often point to the differential growth rates of employment in a small number of occupations identified with these industries. The argument is loose and no evidence to support a bipolarization in the earnings distribution arising from shifts in the occupational structure has ever been published.
2 Robert Z. Lawrence, "Sectoral Shifts and the Size of the Middle Class," Brookings Review, Fall 1985, pp . 3-10.
3 Nea1 H. Rosenthal, "The
shrinking middle class : myth or reality?" Monthly Labor Review, March
1985, pp . 3-10.
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