Is the Middle Class Really Doomed?
I'm something of a worry wart by nature, but as I reported out the magazine story that accompanies this chat, I became more and more bearish on the prospects facing the middle class over the next decade or so, at least absent aggressive action to diminish those challenges. In particular, a combination of forces seems to be conspiring against what I call the "non-professional middle class" -- high school graduates who don't have a bachelor's degree, who make up roughly 60 percent of the adult population. The Great Recession accelerated the elimination of many of the jobs traditionally held by this group -- from manufacturing to white collar sales and basic office work. (And I don't see anything like a full recovery ahead for most of the members of the non-professional middle class who've lost their jobs; by and large, positions near the bottom of the economy await them.) And in a trend that predates the recession, the economy seems to be slowly squeezing people without a college degree (especially men), yet America keeps producing a lot of these people -- increases in college completion have been painfully slow.
What's more, many economists are convinced that the growth prospects of the whole economy look limited for the foreseeable future -- in part because the U.S. seems to have lost its touch for creating breakthrough innovations of the sort that can power widespread job and income growth. Strong growth might alleviate some of the pressures on the middle -- but without it, those problems are likely to be all the more severe.
Tyler, you're one of the economists who see slow growth ahead. In your excellent book, The Great Stagnation, you describe a variety of reasons to believe that the U.S. is likely to be stuck in a period of anemic growth for quite some time. Yet in that book, you seem much more sanguine than I am about what that may mean for the lives of individual people, and for American society as a whole. Am I raising a false alarm about the future of the middle class? How do you see things playing out for the middle class across the next decade?
Read Tyler's response here.