This piece originally appeared at National Review Online and is reprinted here with permission.
Statistics show that the middle class is healthier and more secure than ever before.
This week, Michael Brendan Dougherty wrote that he doesn’t think he’s “ever been so depressed” as when he read my recent report with Steve Rose, “The Middle Class is Shrinking Because of a Booming Upper-Middle Class.” It found, well, that the middle class is shrinking because of a booming upper-middle class. Dougherty’s depression was inspired not by that conclusion but by his conviction that it was misleading — masking the lousy state of the middle class. But when we take a close look at the middle class, there are definitely reasons why Dougherty should cheer up.
Dougherty lays out what, to him, are “the trends behind” my study’s findings. The first of these is that “we have traded some economic security for dynamism.” His evidence for this claim, he says, is “the share of workers jumping directly from one employer to another in a year rising from roughly 6 percent of the labor force in the late 1970s to nearly 9 percent by the late 1990s.”
I’ll confess I couldn’t determine where these numbers came from. But whatever one should make of job-to-job transitions as an indicator of economic insecurity, they have likely fallen. One measure of job-to-job flows is the share of workers who hold two or more jobs over a year’s time. That share fell from about 16 percent in 1979 to 15 percent in 1989 to about 12 percent in 2006 (all relative peaks for their business cycles). The share of workers who were in another job one month later fell from 1997 to 2013. Other research shows a drop in job-to-job transitions from 1975 to 2014, from 1979 to 2015, from 1988 to 2013, from 1990 to 2011, from 2000 to 2010, from 2000 to 2016, and from 2000 to 2020. A couple of studies show a flatter trend from 1992 to 2003 and from 1994 to 2006. The only paper I found that shows an increase in job-to-job transitions also finds that the overall job separation rate fell — that is, transitions from a job to having no job fell by more than the increase in job-to-job transitions. That hardly suggests increased insecurity.
Dougherty’s claim that dynamism has increased goes against what is essentially unanimity among economists that dynamism has been in decline since at least the 1970s. Nearly 15 years ago, many commentators were as sure as Dougherty is now that economic insecurity had increased, but I showed that any changes were small in historical context. Americans rate their own personal finances about as highly as they did 25 years ago.
The second issue Dougherty raises is his claim that “the overwhelming contributor to the growing upper-middle class is not higher productivity . . . It’s more hours worked, and at a higher wage.” Let me quickly just point out that according to data I assembled for an earlier paper, between 1979 and 2022, net productivity (which excludes depreciation — don’t ask) in the nonfarm business sector rose 97 percent while hourly wages rose 85 percent. So it doesn’t exactly feel like productivity growth was unimportant. More good news!
Furthermore, it’s not the case that only women have seen wage gains while men “saw stagnant or modest growth in their wages” and deterioration in their employment. Rather, the numbers behind Figure 2 in this paper of mine indicate that the median wage of men ages 25 to 54 rose by 16 to 29 percent from 1989 to 2023 (and I’d advocate hard for the 29 percent as the better number). One can wish that increase was stronger, but it nevertheless means that men are better off than ever.
And it’s not at all clear that the economy is the main villain here. Part of the downshift just reflects that men had a monopoly on the best jobs until women’s opportunities opened up. Moreover, the decline in marriage and fertility may have played a strong role. In the mid-20th century, when men were far more likely to be sole breadwinners, there was more pressure on them to take the highest-paying job they could find and to stay in that job through thick and thin (while hoping for a promotion). As fewer men over time were husbands or fathers, that pressure declined. Men could take lower-paying jobs, leave jobs they didn’t like, and take longer to find new jobs than in the days where they were solely responsible for a family. The increase in earnings among wives also alleviated these pressures.
While many populists remember the 1980s fondly, median male wages fell from 1979 to 1989 while rising thereafter. No one wants to admit it, but Boomer men (not Millennials or Gen Z) have had the worst wage trends.
Male employment has been falling for a long time; the decline in male labor force participation goes back at least to the 1950s and probably to the 1930s. Moreover, relatively little of this decline concerns men who tell government surveyors they want a job, and little of it concerns men who cite the state of the economy as the reason for their nonwork. From 1967 to 2019, only 12 percent of the decline in employment for men ages 25 to 54 was due to inability to find a job — slightly higher than the share accounted for by early retirement, but lower than the share accounted for by increased school attendance and by growth in househusbands. Declining work among those saying they are disabled or sick is a big part of the story, though less so for the past 25 years. It’s unclear how to interpret this trend, but it’s fairly clear much of it is tied to policy reforms in the 1970s that made federal disability programs more accessible and generous.
Dougherty is certainly right that women work more hours than in the past. But it’s not clear how important this has been for propping up family income. As Jeremy Horpedahl’s analyses suggest, much more important than rising hours among wives has been their higher hourly pay as their opportunities have increased. And while Dougherty asserts that the “number of personal hours spent in leisure at home or maintaining the home has dramatically gone down as well,” the best work on this question indicates that leisure increased among both married men and married women between 1965 and 2003. Among men and women with children (married or not), leisure was also higher in 2003 than in 1965, though it may have been lower for women than in 1985.
Dougherty writes that there are vast swaths of women who have to “settl[e] for marriages across class or for single life.” But remember that men are doing better than ever in absolute terms. Also remember that men still tend to make more than women. The “problem” here is that if men or women will only marry if the husband makes some multiple of what the wife makes, fewer will marry today than in the past. The economy did not create this “problem,” except insofar as it has encouraged more women to prioritize earnings. Men aren’t going to make the same multiple of women’s earnings as they did 75 years ago without some massive affirmative action program for them or state and employer discrimination against women.
I don’t necessarily disagree with Dougherty about some of the costs of the dual-earner model, though I think the benefits have outweighed them and that it’s not my business to convince wives and husbands otherwise. I don’t necessarily disagree with Dougherty that Americans are chasing consumption of market goods too much relative to investing in family and community life, but I think this has little to do with increased economic insecurity or stagnation. I think the decline in marriage — reflecting the nation’s affluence rather than economic stagnation — is a much more concerning issue than the rise of two-earner families among those who do marry. Populists may not agree with the economic choices that free-thinking women and men have made in recent years, but they have the right to make those decisions — and they’re not being coerced by a failing economy to do so.
