The Eroding American Middle Class


Wall Street Journal
By: William A. Galston
November 12, 2013

The publication of Josef Joffe's "The Myth of America's Decline" marks the latest skirmish in the war of words over declinism that has raged off and on since the early 1970s. Unlike Great Britain at the end of the 19th century, Mr. Joffe argues, the United States is still leagues ahead of its major competitors. Besides, generations of skeptics have gone broke betting against us.

But anti-declinism easily shades over into complacency, a sentiment we cannot afford. Especially now, as the basis of our society, and of stable and decent political communities generally--a thriving and self-confident middle class--is eroding. Worse, either we don't know what to do about it, or we don't care enough to try.

In 1971, according to the Pew Research Center, 61% of all adults lived in middle-income households. By 2011, the middle-income share had fallen to 51%, while the lower- and upper-income sectors grew. Median household income in 2011 was not significantly higher than it had been in 1989. Because upper-income households fared much better during those four decades, their share of total household income increased by 17 percentage points--to 46% from 29%--while the middle-income share fell by 17 points, to 45% from 62%. No wonder Neiman-Marcus and Wal-Mart WMT -0.32% are doing well while J.C. Penney JCP +1.08% and Sears are nearing collapse.

These economic trends have social consequences. A recent study by Cornell University researcher Kendra Bischoff and Stanford's Sean Reardon finds that the share of families living in middle-income neighborhoods declined to 42% from 65% between 1970 and 2009. At the same time, the shares of families living in affluent neighborhoods and in poor neighborhoods more than doubled. Segregation along lines of income grew in each of the past decades, with the fastest growth coming between 2000 and 2009. This trend is not restricted to white Americans. In fact, segregation by income among black families grew four times as much as for whites, and Latino income segregation also increased more sharply.

In sum, the middle class is shrinking and hard-pressed to keep its head above water, while upper- and lower-class Americans are increasingly likely to live in geographical concentrations of wealth and poverty.

Although much scholarship has focused on the implications of concentrated poverty, Ms. Bischoff and Mr. Reardon find that during the past four decades, "the isolation of the rich has been consistently greater than the isolation of the poor." They speculate that if more-advantaged families no longer share social environments and public institutions with less-fortunate families, the better-off may reduce their support for the programs and activities--such as schools, parks and public transportation--in which Americans participate across income lines, a shift that may have "far-reaching consequences" for the rest of society.

This is not a new thought. In 1991, the midpoint of the four decades that Ms. Bischoff and Mr. Reardon studied, political economist Robert Reich coined the phrase "secession of the successful." These highly educated and successful Americans, he wrote in the New York Times, NYT -0.38% "inhabit a different economy from other Americans." In many local communities, they had "in effect withdrawn their dollars from the support for public spaces and institutions shared by all and dedicated the savings to their own private services."

Mr. Reich is a doughty champion of the liberal left, not a description recently applied to Charles Murray. Yet in his latest and best book, "Coming Apart," Mr. Murray explores (and worries about) the same question: What does it mean for American society if members of the growing upper-middle class are economically, culturally and geographically isolated from the rest of their fellow citizens?

In a chapter titled "How Thick Is Your Bubble?," Mr. Murray crafts a diagnostic quiz for this group. Sample question: Have you ever held a job involving physical labor with large muscles that hurt at the end of the day? Another: "How many times in the last year have you eaten at one of the following restaurant chains? Applebee's, Waffle House, Denny's, IHOP, Chili's, Outback Steakhouse, BLMN +0.58% Ruby Tuesday, T.G.I. Friday's, Ponderosa Steakhouse."

While the questions are amusing, their point is serious: Members of the rising professional/managerial class share fewer and fewer experiences with middle-class Americans--let alone the working class and the poor.

I worry about all this for the reasons Aristotle offered more than two millennia ago: Societies where the middle class dominates are the most likely to be stable and decent. The wealthy tend to be arrogant and heedless; the economically insecure, resentful and destructive. By contrast, Aristotle observed, members of the middle class tend to have more moderate desires, they are more open to reasonable persuasion, and they are more likely to be linked to one another by ties of civic affection.

The simultaneous rise of economic and political polarization is more than a coincidence. Politicians cannot come together if society is coming apart, and America cannot advance if its middle class is in retreat.

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This page contains a single entry by CFED published on November 13, 2013 3:24 PM.

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