25 September 2011

Recession Hit Middle Class Hardest

The last decade, mostly during the downturns following the tech bust in 2001 and the financial crisis in 2007, have further exacerbated the divided between the upper middle class and the middle class, while having a strongly negative but not as great impact on the working class.

In this time period, the 3.0% of people at the very top of the education scale, lawyers, doctors and people with PhDs and M.B.A.s managed to improve their median incomes slightly. But, roughly 63% of people with some college, college degrees, and master's degrees lost more of their income in percentage terms (and even more in absolute terms) than roughly 31% people with only high school diplomas. More people have high school diplomas and college degrees, but the benefit of these degrees relative to high school diplomas have waned. (The 12% without high school diplomas also took large percentage hits.)

The detailed analysis within these categories would also show winner take all tendencies. The divide in the bimodal distribution of lawyer incomes and the divide between specialist and generalist doctors has widened. The divide between financial industry executives and real economy execeutives also widened.

This is somewhat counterintuitive because the analysis often discusses hits to the construction and manufacturing industries which we think of as being high school education dominated jobs, and by people in high finance top jobs, but actually government as a sector has lost jobs relative to manufactring.

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