The shrinking middle class
Date posted: September 24, 2012
A recent study by the Pew Research Center made quite a splash, showing that in the last decade the middle class has shrunk by 6 percent. But in the last 40 years the decline has been more than 17 percent. N.C. State University economist Mike Walden explains what’s going on.
“Well I think a lot of things are going on … and obviously including the recent recession. The kinds of jobs that are now available — really we have two major job markets: We have a job market for people who have college degrees and higher, and then we have a job market for people who are high school dropouts or high school graduates. The middle-class jobs, if you will, have been shrinking.
“And then, of course, we have demographics. We have a lot of folks who have been retiring. That’s affecting the distribution of people in terms of economic class.
“But a big question, I think, had to do with — although … the Pew Research … says the middle class has been shrinking — the question is where are those folks going. Have they been shrinking and going to a lower economic status or have they been going up to a higher economic status?
“And fortunately the Pew Research gives an answer there. And the answer is that of the folks who have moved out of the middle class over the last 40 years, 40 percent of them moved down. Forty percent moved down to a lower economic status. But 60 percent moved up.
“I’ll let our listeners decide if that’s good or bad, but it does I think give us insight into how the middle class has been changing.”
Category: Economic Perspective