By Bob Herbert
September 13, 1999
If you listen too long to the rhetoric you could begin to think we've stepped into some kind of economic nirvana. Things are going well, and maybe it is nirvana for the lucky ones at the top. But the economic reality for middle-class American families is somewhat more modest. A new study by the Economic Policy Institute in Washington shows that middle-class workers are only slightly better off now than they were 10 years ago.
Make no mistake, these are good times. Tight labor markets, increases in the minimum wage and the earned income tax credit have helped low-wage workers. Unemployment overall is very low. And the C.E.O.'s and other at the very top have more money than they know what to do with.
But at $44,468, the annual income for the median American family (usually the latest available data, adjusted for inflation) is less than $300 above where is was in 1989. The men in the group are actually doing a bit worse than 10 years ago. The institute noted that "despite gains over the 2 ½ years, the inflation-adjusted hourly wages of middle-wage men were 1.8 percent lower 1999 than in 1989, the previous business cycle peak."
Nirvana, that ain't. What we are seeing is that the families right in the middle are struggling, as always, to make ends meet. "Though middle-wage women workers have fared better than their male counterparts, by the middle of 1999 the median female worker's wage was only 3.4 percent above its 1989 level," the report said. That is not much of a raise over 10 years. The families faced with constant worries about mortgages and the costs of ed8cation and health care may well be wondering what all the celebration is about.
The authors of the report said: "The booming economy has thus far failed to lift the economic prospects of middle-class workers beyond where they were before the last recession. Despite their substantial contribution to the growing economy, Wages for these workers have been stagnant or declining, manufacturing jobs are disappearing at an accelerating rate, and the share of non-college educated workers with employer-provided health coverage has declined." To make ends meet, middle-income wage earners, men and women, have been working more and more. The report found that "the typical married-couple family with children put in 256 more hours of work - six additional full-time weeks than it did in 1989."
And yet even as the number of hours on the job has increased, the benefits - particularly health benefits - have declined. Sixty-two percent of the work force in the U.S. are individuals with a high school diploma and perhaps some college, but not a college degree. The repot found that "the share of high school educated workers with employer-sponsored health insurance coverage fell from 72.1 percent in 1989 to 69.5 percent in 1997. For those working full-time, year-round, the share with health insurance through their own employer fell by 5.3 percentage points between 1989 and 1997, from 66 to 60.7 percent."
Jared Bernstein is a labor economist with the Economic Policy Institute and one of the authors of the report. In an interview, he said: "We, as much as anyone, have made positive noises about the last few years, you will see that despite some positive results in the most recent years, folks are just about back where they started. And that's not the most impressive economic result I can think of." What has happened is that the wages of middle-class workers have trailed the growth in labor productivity in the U.S. Said Mr. Bernstein: "When productivity is increasing on average, and workers at the middle of the wage scale - who certainly make a non-trivial contribution to that growth - when their wages are not keeping up with it, that's evidence of an unfair distribution of economic growth. And if it's not going to the middle, we know it's been going disproportionately to the top.
"I like to look at it this way: If the pie is growing faster, then the bakers of the pie ought to get a bigger slice." For the folks in the middle to really get beyond where they were in the late 80's. the economic recovery will have to continue at approximately the same pace for another few years. You might mention that to Alan Greenspan if you see him.
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