I’ve been crunching all day on a paper on the middle-class squeeze. Here are two figures from the work that tell a lot about the story.
First, there’s the well-known split between the growth in real middle-class family income (here, the median income) and productivity growth. People used to say: “well, you’d expect family incomes to grow more slowly since productivity growth slowed.” But the deceleration in median income has been so much greater than the slowdown in productivity.
Sources: Census Bureau and BLS
Clearly, growth has been doing an end run around the middle class for a while.
It’s not, btw, from lack of trying. This next figure shows the annual hours worked of middle-income families with kids, 1975-2009, with husbands and wives shown separately. While middle income husbands generally worked full-time, full-year over this period, hours worked in the paid labor market by middle-income wives grew steeply, by over 400 hours.
Since middle-income men’s wages were stagnant and wives’ were rising, this dynamic helped to keep middle-class incomes from falling, but it also gave deepened the challenge of balancing work and family. (Note large hours losses for both husbands and wives over the great recession.)
I also look at single moms in the paper, and they too work a lot more over this period—clearly as the sole breadwinner, their work/life balance challenge is a lot harder.
More to come on this.