Middle Class Squeeze

The NY Times reports on the middle class being squeezed out of cities, and the LA Times looks at wage stagnation:

Wage stagnation, long the bane of blue-collar workers, is now hitting people with bachelor's degrees for the first time in 30 years. Earnings for workers with four-year degrees fell 5.2% from 2000 to 2004 when adjusted for inflation, according to White House economists.

It is a remarkable setback for workers who thought they were well-positioned to win some of the benefits of the nation's economic growth, and it may help explain why surveys show that many Americans think President Bush has not managed the economy well.

Not since the 1970s have workers with bachelor's degrees seen a prolonged slump in earnings during a time of economic growth. These workers did well during the last period of economic growth, 1995 to 2000, with inflation-adjusted average wages rising 12%, according to an analysis by the liberal-leaning Economic Policy Institute.

And here’s an interesting little tidbit about job growth, such as it is:

And companies have continued their long effort to replace salaried positions with lower-paid, nonsalaried jobs, including part-time and freelance positions without benefits. Those contingent positions make up nearly half of the 6.5 million jobs created since 2001, said Paul Harrington, a labor economist at Northeastern University in Boston.

The further away from a corporate center one gets, the more noticeable the effects of wage stagnation and crap job prospects. Middle America has been feeling it for quite some time now.

I was just speaking to a dairy farmer recently who told me that the price she gets for milk hasn’t been raised since 1981. The cost of doing business keeps going up, as do milk prices, but she’s been living on the same income for 25 years. And of course, Congress still refuses to raise the minimum wage, which was last raised in 1998. None of this, to put it mildly, is good news.