The middle class fared the worst in terms of job losses throughout the recession. The National Employment Law Project has consolidated findings from its studies and found that while there has been some economic recovery in the employment sector following the recession, the recovery changed the nature of the job market.
Jobs with a mid-tier range of wages, from $13.84 to $21.13 per hour, have only recovered about one quarter of their losses. Lower-wage jobs, those with wages from $7.69 to $13.83 per hour, gained back more jobs than this group lost by a factor of about 33 percent. Higher-wage jobs, in this study those classified with wages from $21.14 to $54.55, have recovered almost all of their losses during the recession.
Politicians talk about job gains and losses in big numbers and in totals, but this masks the reality of the employment situation. Both political opponents have numbers they like to share about the economy in terms of recovery in the employment sector, but not only are the calculations easily manipulated lending to numbers that are designed for marketing rather than fact, but the sound-bite-style approach to discussions precludes people's ability and willingness to look deeper at the situation.
Middle class jobs are being replaced by low-income opportunities, like jobs in food preparation, retail sales, and office clerks. Here are some more observations from the study:
The shifting of the labor force is not a new occurrence. The industrial revolution created middle class jobs. Machines replaced some labor, but created an entirely new marketplace for middle class jobs because machines needed skilled operators. Two world wars created new opportunities for workers to fill low-income and middle class jobs. With the digital revolution, computers replaced more low-wage jobs, making an education significantly more important in finding and keeping middle class jobs. Perhaps not to the same extent but still significant, the recent recession has undone the progress of the middle class over the past one hundred and fifty years.
It's hard to say what's in store for the middle class moving forward. Economic forces that permanently shift the economy in this manner are bigger than any one President of the United States. Seventy years of great expansion for all classes in the United States, from the very rich to the very poor, followed the Great Depression, accelerated at times and slowed at times by public policy, but the driving force was technological advancement. Technology seems to be continuing to evolve at an accelerating pace and spread to developing nations, so there is hope, even if you need to take a global perspective in order to see it.
But this doesn't matter much to the mid-level corporate employees losing their jobs, finding only menial service positions for significantly less money. This reality, frustrating as it is, forces us as individuals to re-evaluate long-term approaches (and by long-term I mean multi-generational) to living in the world. It could change the nature of financial independence. A shift away from middle class jobs changes the type of education and skill-building necessary to live a comfortable life without risk of falling into the lower working class or even poverty.
If you want to survive this shift away from middle-income jobs, which might get more pronounced in the future and could well be permanent, here are a few approaches or strategies to consider. The goal, of course, is to move towards financial independence in a world where there is a wider gap between the rich and the poor.
If the current trends that are helping eliminate middle-wage jobs, broadening the gap between the wealthy and the poor continue, and I expect they will regardless of who is elected as the President of the United States, you can forget about living comfortably on pensions, 401(k) payments, and Social Security in retirement. You can forget about comfortable suburban living on a decent but not great corporate salary. You'll need to make some changes to the way you're living and consider a new way of designing your future if you're interested in not having to worry about money from one paycheck to the next and about whether that next paycheck will come.
As I wrote earlier, this has the potential to be a multi-generational shift. Not only do you need to think about the future of your own financial independence in these terms, you should consider doing what is necessary to ensure the financial independence of your children for the rest of their lives as well as the lives of their descendants. That doesn't necessarily mean building wealth to such a level that you can keep it in the family for generations to come, but instilling a philosophy that takes the long-view and moves in the direction of somewhat permanent or at least consistent financial independence. A healthy attitude and approach to building wealth and its prerequisites like education, lateral and creative thinking, and flexibility, can help families be immune to the loss of the middle class over the long term.
Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Flexo on Twitter. View all articles by Luke Landes (Flexo).
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