U.S. Middle Class Crisis of the 1990s

 Where is the middle class concentrated -- in which regions, counties, and metro areas?
Compare the middle class map with where the rich and the poor live.


Three or more of the five factors are defined below.


 

Net financial assets are financial assets minus debt. Financial assets excluded home equity but included savings accounts, checking accounts, brokerage accounts, U.S. savings bonds, securities such as stocks, mutual funds and bonds, and money owed to a member of the household. Debt included money owed on gas, store or major credit cards, to financial institutions, medical practitioners for expenses not covered by insurance, and other credit such as school and personal loans; it excludes housing, vehicle and business loans.

Racial groups:
34 percent of white middle-income families are securely in the middle class, as compared to
26 percent of African-American middle-income families and only
18 percent of Latino middle-income families.
Source: Jennifer WHEARY, Thomas M. SHAPIRO, and Tamara DRAUT, By a Thread: The New Experience of America’s Middle Class. Dēmos and The Institute on Assets and Social Policy at Brandeis University. March 2008.
In the 1970s and 1980s employment in quintessentially middle-skilled, middle-income occupations—salespeople, bank clerks, secretaries, machine operators and factory supervisors—grew faster than that in lower-skilled jobs. But around the early 1990s, something changed. Labor markets across the rich countries shifted from a world where people’s job and wage prospects were directly related to their skill levels. Instead, with only a few exceptions, employment in middle-class jobs began to decline as a share of the total while the share of both low- and high-skilled jobs rose (see chart). The pattern was similar in countries with very different levels of unionization, prevalence of collective bargaining and welfare systems. This “polarisation” of employment almost certainly had a common cause.

The development of information technology (IT) is the leading candidate. Computers do not directly compete with the abstract, analytical tasks that many high-skilled workers do, but aid their productivity by speeding up the more routine bits of their jobs. But they do directly affect the need for people like assembly-line workers or those doing certain clerical tasks, whose jobs can be reduced to a set of instructions which a machine can easily follow (and which can consequently be mechanized). At the other end of the employment spectrum, as the example of the towel-folding robot neatly demonstrates, low-skilled jobs may not require much education but they are very hard to mechanize. 

Source: The Economist, 11 September 2010, p. 95.