On Day of President Obama Jobs Speech, New Study Reveals Unraveling Middle Class

Release Date: 
September 8, 2011

Today, on the morning of President Obama's jobs speech, the national policy center Demos published a new study detailing how the job losses of the Great Recession are intensifying the threat to America's middle class, which was already struggling after decades of economic stagnation, slow wage growth and rising costs.

"The Great Unraveling: A Portrait Of The Middle Class" shows that Americans are facing an overwhelming slate of new economic challenges-a lack of well-paying jobs, higher costs to raise children, declining access to health and retirement benefits, and decreasing access to higher education, among other challenges. 

"In order to put people back to work, spur a true recovery and rebuild the promise of the American Dream, President Obama's jobs plan must start with proven policies - particularly bold public infrastructure investment, strong protection for workers and smart regulation," said Tamara Draut, Vice President of Policy and Programs at Demos.  "Decades of these policies paved the way to shared prosperity for workers and businesses in the 20th Century.

"Nationally, too many Americans live paycheck-to-paycheck as earnings have shrunk for all but the best-educated workers.  Even before the Great Recession, good jobs were disappearing as generally higher-paying, unionized manufacturing jobs were replaced by lower-paying service jobs. It doesn't have to be this way."

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Highlights from the Report:

--Since 1980, median earnings were relatively flat or on the decline for most workers. Only workers with a bachelor's degree saw significant growth (25 percent).

--Among young workers, the only group who had higher typical earnings in 2010 than in 1980 were those with a bachelor's degree or higher. Earnings for young workers with only a high school diploma and those who did not finish high school declined 10 percent and 16 percent respectively. 

--As young women entered the work force, their wages grew by 27 percent while young men's actually decreased by more than 4 percent.

--Manufacturing employment declined from 25 percent in 1980 to 11 percent in 2010, while service employment increased from 29 percent to 43 percent. (Together, the two sectors represent 54 percent of all employment since 1980.)