Fifty years ago, most American households earned a middle-class income. An average, three-person household would earn between $42,000 and $126,000 per year to be considered middle class. In 1971, 61% of households were in that range but by 2015, only 50% of households remained in that range.
Whereas previously, most Americans fell into the middle class, now American income is divided into the upper and lower classes with fewer and fewer households in the middle class. The shift in income can be partially blamed on an economy still recovering from the recession of 2008. A cultural shift has also occurred that has affected the American income curve. The middle class has shrunk considerably and is not likely to return. The middle class is a symbol of financial security and the American dream. What can be done to protect the middle class and restore it? How did it go away in the first place?
The disappearance of the middle class is not completely due to unfortunate circumstances. Since the 1980’s, more and more women have joined the workforce, bringing their families’ household incomes up considerably.
Americans have sought higher education, which can also contribute to higher salaries. However, much of the disappearance of the middle class has to with cultural changes and business practice changes. Long-term careers are practically a thing of the past. Most young adults now do not expect to keep the same job from the beginning of their career until retirement.
The business world is much faster paced than it was even twenty-five years ago, with more opportunities and industries than before. Young adults, aged 22-35 are likely to cycle through seemingly unrelated careers. This is often not a conscious choice. Jobs often have absurd requirements, personality tests, and are not intended to be long term. Many young adults today also like to dabble in different projects and fields. Young adults are more likely to be college educated than their parents but are also more likely to be expected to work low-paying or unpaid jobs longer than previous generations. When young adults leave a job, often it is because there is little to no opportunity for advancement or promotion.
Companies do not offer the same promotions or yearly bonuses that have been offered in years past. Without the incentive of promotion, there is little reason to stay with a company. There are so many college-educated adults now, that there is a gap in a skilled labor force.
Many people are overqualified for their jobs or are denied work for being overqualified. Often, people work 2-3 low paying jobs simply to stay afloat. Skilled and unskilled labor is undervalued as is, in the US. In countries such as Denmark, working as a cashier at a fast-food restaurant offers financial and job security. Workers are simply not paid enough for their labor in the US.
To bring back the middle class, the culture surrounding the idea of having a middle class will have to change. Many young adults have put off having children, buying a house, saving for retirement because of the financial struggles they have faced due to the 2008 recession’s effects.
If companies want to retain employees, they will have to work harder for their employees by providing promotions, raises, job security, and being more lenient with “qualifications.” An entry level job should not require 3-5 years’ experience. Building a future that includes a middle class will mean including the people who have been left behind right now.