Myths about the Middle Class

Reports of the death of the American middle class may be exaggerated and hope for its survival and success may lie in improved education and direct links to economic growth.As Barack Obama and Mitt Romney stalk middle class voters, a University of Arizona sociology professor offers some hints of where to look and what to expect.

In a piece published last week by The Washington Post, Lane Kenworthy says — contrary to political rhetoric — America's middle class is better off today, not just financially, but also in terms of enhanced quality of life.

"Income changes alone don't capture the enhanced quality of life that stems from greater access to information and entertainment through personal computers, smartphones, the Internet and cable TV, advanced in medical care such as MRIs and surgical techniques and more choices for all kinds goods and services," he wrote.

Kenworthy dispelled what he called the myth about economic growth benefitting the middle class. "Sadly, that's wishful thinking," he said. 

"Since the 1970s, the American economy has continued to grow fairly quickly, yet the middle class has seen a relatively small gain in income," Kenworthy noted. "Between 1979 and 2007, two peaks in the business cycle, the country's per capita GDP increased by 50 percent. During that same period, the average income of the middle three-fifths of households rose by less than 30 percent."

The biggest chunk of income gains in that time period went to upper income Americans, he claims. Income gains by middle class households typically resulted from a second wage-earner, not higher wages.

Despite what many view as a stagnant economy, Kenworthy says most Americans view themselves as part of the middle class, a view that hasn't budged, he adds, since the 1970s.

There is widespread fear of a decline in middle-class living standards, but Kenworthy said all is not lost. Conceding U.S. job growth has stalled in the last decade or so, he says the best hope for increasing employment and income gains is through "more and better education."

"Technological advances and globalization will continue to bring us new goods and services and lower prices," Kenworthy says, "and that will create some jobs even as it destroys others." But he says "stagnating wages and job growth are not foreordained."

Lane Kenworthy – economic growth doesn't automatically trickle down to middle and low-income Americans.

His prescription for "more and better education" calls for expanded support for early education to improve school readiness for more children, especially those in economically disadvantaged households. Kenworthy also favors helping working parents achieve a better life balance so they are healthier and contribute to the success of their children both inside and outside the classroom.

In terms of economic policy, Kenworthy recommends extending the earned income tax credit to the middle class to compensate for stagnant wage increase. He also urges linking average compensation levels across the entire economy with a rise in GDP to ensure that a rising tide floats all boats.