Economics Labor Society

Is the American Middle Class Dead?

The term “middle class” is one heard and used all of the time, but rarely do we stop to question how that term is defined and whether that definition is really true. A recent Atlantic article by Caitlin Zaloom (Associate Professor of Social and Cultural Analysis at New York University), does both of these things and her conclusions are worth considering.

Zaloom starts by noting that most people think of the middle class in terms of income, an idea that goes back to the work of Irish statistician T.H.C. Stevenson, who identified the middle class as the income group falling between, in Stevenson’s terms, the upper-class and the working-class. Recently, two Brookings analysts, Richard Reeves and Katherine Guyot, calculated that the American middle class is “the middle 60 percent of households on the income distribution,” which represents $37,000 to $147,000 for a three-person household. This definition sounds right but, asks the author, is income really the best way to assess and consider what is a middle class in this country? Her conclusion is no, for three very interesting reasons.

Zaloom’s first critique of the income-based determination of middle is that income purchasing power varies tremendously across the country. A $100K salary in Manhattan is not the same as one in Peoria, IL. So it is misleading to suggest that a given income level is indicative of whether someone really lies as the center of class distribution. More interesting, however, is Zaloom’s second critique which centers around the notion of stability. For her, a key element of our traditional conception of what it is to be middle class is income, and lifestyle, is stability. Middles class workers, in other words, did not just enjoy a given income level; they enjoyed that level with an accompanying sense of security that was significantly higher than working class laborers. For her, any given income level, if it is unstable and uncertain, should not automatically confer middle class status on the earner. As she writes:

Being middle class means striving for the stability and respectability that older generations achieved by holding down steady jobs, owning a home, and raising upright kids who could take their place. These benchmarks are no longer simple to attain. Instead, middle-class desires are marred by an insecurity historically associated with the American working class. Definitions should reflect that.

Stability was critical to being in the middle class, she adds, because it allowed the formation of a family and the development of the social structure that came to define the traditional middle class life in America:

Stability on the job gave shape to the idealized nuclear family, one that white-collar men and women could imagine anchoring their children’s adulthoods, too. White-collar privileges meant that parents could draw on the husband’s steady salary to send their children through high school or college and on toward their own constant suburban life.

As anyone can attest, there is no stable or secure corporate job any more. Anyone can be kicked out the door at anytime and for almost any reason, be it because of automation, outsourcing, or increasingly AI and other new technologies. To be a middle manager in a big company today is to enjoy no more institutional job security than an order taker at a fast food restaurant. There are many books that have chronicled that evolution, and many more that lay out a future in which almost any job imaginable can be turned over to a machine. The result, notes,  Zaloom is that “anguish over lost social standing has, in turn, been replaced by a pervasive sense of insecurity.”

Zaloom notes that such is the insecurity of traditional income sources that many once middle-class workers (teachers, nurses, office managers, etc.) now augment their income doing traditionally working class jobs:

Eroded work is such a cornerstone of middle-class life that middle-rung workers lean on contingent jobs to buoy their income. Uber has even built this into its business model. As the journalist Alissa Quart has reported, Uber actively recruits teachers and nurses into its ride service, especially in regions like the Bay Area where living costs are so high that even a secure income of more than $100,000 can leave a family in tough straits to pay for the housing and day care it needs to work in the first place.

Again, years of Uber ridership suggest that Zaloom is right. Many drivers use Uber as an income booster to what, years ago, would have been secure middle-class jobs. Being a teacher or manager is no longer protection from having to do blue-collar work to make ends meet.

The third critique Zaloom notes is that to be middle class in the traditional sense meant that a family was, over time, zeroing out debt. In other words, one of the main goals of a middle class lifetime was to pay off any debt by one’s 40’s and then to use the second half of a working life to amass some level of wealth that would fund retirement (and maybe a small inheritance for children). Being middle class meant, in general, being debt-free past the age of 50 and having a secure retirement funded through a lifetime of work. This is no longer the case.

Zaloom notes that the greatest growth in household debt in the recent past has been for older people (young people debt has actually decreased) — people who traditionally would have been been focused on eliminating all debt during their prime earning years. A major driver of this change, notes the author, has been the rising cost of education which has resulted in middle-aged parents stepping in when their offspring are no longer able to borrow more money to fund their educations:

Although middle-age Americans have always carried the most debt, relying on home loans and credit-card charges to build their family, now they must also take out loans to meet their children’s tuition responsibilities. As students hit the ceiling on their federal borrowing, parents are stepping in to fill the gap. Household debt is graying, the Federal Reserve Bank of New York has found. Borrowers in their later years—between the ages of 50 and 80— have propelled consumer debt to its new heights.

Untitled.pngCertainly, education costs are a major reason for older people taking on debt, but other drivers also play their parts. Rising healthcare costs, for example, for middle-aged workers leads many to pay such costs through credit, in which case illness itself becomes another major driver of middle class instability at any given income level.

Zaloom concludes her analysis by suggesting that we need to think about middle class in terms not just of income but also in terms of location, stability and debt. This suggests that a new definition of middle class would require that we assign an income level and then insist that this income is earned in a middle-cost location, is from a stable and services a reasonable amount of household debt. Under this more nuanced definition, the American middle class would only be fraction of what most people think it is today. As the author notes:

The middle class is tricky to define today because the secure jobs and stable home lives that supplied its historical definition are now gone for most Americans.

Under these conditions, it may no longer even make sense to talk about the “middle class” at all. New concepts may be necessary to describe the social stratification in America’s polarized society.

Zaloom’s critiques are worth taking seriously. It no longer makes sense to talk about middle class solely in terms of income. To be really middle class in American requires much more than just a (quickly erasable) income stream. It requires a level of economic security that far too few people possess and which future generations may only read about.


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