We reached out to some of the leading scholars of the American middle class to ask what they make of Neal Gabler’s analysis in our new cover story on financial insecurity. Our first contributor is Edward Wolff, an NYU professor of economics, who points to wage stagnation as the central factor:
The ultimate culprit is wage stagnation, occurring now for over 40 years (average real wages peaked in 1973). This translates into income stagnation. For a while (until about 1990 or so) families compensated for stagnant wages by the increased participation of wives in the labor force. Once this opportunity was exhausted real incomes also stagnated. Indeed, according to Census data, median family income in 2013 was less than it was in 1997.