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The shrinking middle class:
myth or reality?
Public interest and concern has been stirred by recent articles that presage a decline of middle income earners. Those who support this view contend that such earners are declining as a proportion of the U.S. work force because more of the new jobs are at the top and bottom of the earnings structure.1 They warn that this trend could lead to political and social unrest stemming from a two-tiered society, fewer advancement opportunities for those on the lower range of the earnings ladder, and even economic disaster as the great purchasing power engine of the middle class loses steam.
Discussions of the declining proportion of middle income earners can focus on changes in the distribution of earnings of individuals or changes in the distribution of earnings of families. Changes in the distribution of earnings of families. Changes in the distribution of earnings of individuals may be caused by changes in the occupational structure of the economy that reflect changes in industrial structure and technology. In addition, changes in the distribution of earnings within each occupation and changes in relative earnings among occupations can affect the distribution of earnings of individuals. Changes in the distribution of earnings of families are affected not only by these same factors but also by changes in family structure. For example, increasing numbers of dual earning families can lead to an increase in the proportion of families with high earnings and increasing numbers of single person families can lead to an increase in the proportion of families with low income.
This article focuses primarily on how changes in occupational structure affect the distribution of earnings of individuals. It also considers the contribution of changes to the distribution of earnings of individuals caused by changes in the distribution of earnings by occupation over the 1973-82 period.
This excerpt is from an article published in the March 1985 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 See, for example, Bob Kuttner, "The Declining Middle." The Atlantic Monthly, July 1983, pp. 60-72; Lucy S, Gordon, Are Middle Level Jobs Disappearing? (Industrial Union Department, AFL-CIO, 1983); Lester Thurow, "The Disappearance of the Middle Class," The New York Times, Feb. 5, 1984, p. F3; Thomas M. Stanback, Jr. and Thierry J. Noyelle,
Cities in Transition (Conservation of Human Resources, Landmark Study Series, 1982); Barry Bluestone and Bennett Harrison, The Deindustrialization of America (Basic Books, Inc., 1982); Bruce Steinberg, "The Mass Market is Splitting Apart," Fortune, Nov. 28, 1983, pp. 76-82; and Deindustrialization and the Two Tier Society (Industrial Union Department,
AFL-CIO, 1984).
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