< Playing to the Middle


Friday, January 29, 2010

BOB GARFIELD: If members of the media weren't parsing populism this week, they were wondering about the plight of what German novelist Herman Hesse once called “the fat and prosperous brood of mediocrity,” aka the middle class.

PRESIDENT BARACK OBAMA: The price of college tuition is just one of the burdens facing the middle class. That’s why last year I asked Vice-President Biden to chair a taskforce on middle class families.

BOB GARFIELD: And if you believe the conventional wisdom of both President Obama and the punditry, the middle class is fat and prosperous no more. They are under attack, in decline and threatened with total extinction. Of course, it’s a time-tested tactic of populism to pander to the “big brood” but who exactly are the middle class and what evidence is there of its impending doom? Stephen Rose is an economist and author of the upcoming book Rebound: Why America Will Emerge Stronger from the Financial Crisis, and he joins me now. Stephen welcome to On the Media.

STEPHEN J. ROSE: Thank you.

BOB GARFIELD: First of all, putting Herman Hesse aside, where did the term “middle class” come from?

STEPHEN J. ROSE: Well, the first origins basically arise when people move to cities, and the middle class became all those in the cities who were neither owners nor workers. They were the artisans, the professionals, people who were on their own and did a little better than workers but who weren't owners and certainly weren't landowners. And then as the cities developed in the 20th century, once you started talking about a chicken in every pot and home ownership, “middle class” became more a term of middle standard of living, and workers then could aspire to it. And by the 1950s, as the economy then grew from World War II and the Depression, it became more and more popular.

BOB GARFIELD: Well, in the developing world, let's just say India, the middle class, while large and growing, is still a relatively small slice of the overall population. In the United States, you know, unless I'm missing something, it’s almost all of us, right?

STEPHEN J. ROSE: If you ask people to self-describe themselves and you ask, are you upper class, middle class, upper middle, lower middle or lower class, then virtually everyone will pick some form of middle class. In a 2008 survey from the Pew Research Center, 57 percent just called themselves middle class, but another 38 percent tacked on the term “upper” or “lower middle class” pretty divided evenly. That left only two percent of the people saying they were in the upper class and six percent saying they were in the lower class.

BOB GARFIELD: You have identified what you call myths about the middle class that you say are perpetuated by the press and by politicians when it suits [LAUGHS] their purposes.

STEPHEN J. ROSE: Well, there are a number of researchers that have tried to show that the economy’s worse off because they think that’s the way that you convince people to support liberal politics. I want to be clear that I was a Clinton appointee and I'm on their side. I just think that it’s more important to get the truth. Most people will talk about 1980 to the present, so that’s about 30 years, and a number of people will say the middle class has gotten nowhere in that 30 years. They'll say that all the income growth went to the top 10 percent. They'll say that their standards of living haven't improved, and if they have improved it’s only because they are working longer, so they're working longer for basically the same thing. And another variation is that all the jobs that are being created are low-end jobs, the “McJobs.” We're now a service economy, therefore, all service economy must be dead-end and low pay. And then there are what I would argue are almost purposeful misstatements on the state of income distribution over time.

BOB GARFIELD: So are you saying that it’s not true that our standard of living within the middle class has gone down, not up, over the past 25 years?

STEPHEN J. ROSE: I'm certainly saying that, and I think there’s a lot of data that would show that. It is, indeed, true that the wealthiest quarter have indeed gotten much more than other sectors of the economy, but it is not true that the middle class has gotten zero. Real income per capita from 1980 to today is up like 65 percent. That’s an average, of course. And if all gains were shared equally over the last 30 years, their standard of living would have been up 48 percent across the board. In my data I show it’s up 32 percent. 32 percent is far way from zero. Part of that is that women are, indeed, working longer, there’s no question. But even if you simulated if women worked the same amount of hours that they did in 1980, you’d still find household couples having higher incomes.

BOB GARFIELD: So what you’re saying is that to properly report on this subject you have to be able to hold two ideas in your head at the same time, one, that wealth has not necessarily been evenly distributed and, two, that nonetheless the middle class has done pretty well.

STEPHEN J. ROSE: Correct. One of the things about how the media covers the middle class is that they are somewhat taken in by it, the story that everything is gloom and doom. Partially, it’s that good news is boring and, therefore, when you try and find out something different, especially before the current crisis, you have someone like Robert Kuttner writing that from 1980 to 2005 we should look at this period as one of the silent depression, a silent depression during the Reagan boom years and the Clinton super-boom years. This is really a remarkable statement to make. And the issue is, is we should care about people who are not doing well. But they're making it appear as if it’s way over the majority that are being hurt. And what I would argue is the glass is more than half filled.

BOB GARFIELD: All right. Stephen, thank you very much.

STEPHEN J. ROSE: Thank you. It’s been a lot of fun.

BOB GARFIELD: Stephen Rose is an economist and author of Rebound: Why America Will Emerge Stronger from the Financial Crisis, due out in April from St. Martin’s Press.