Shrinking Middle Class ~ struggling in the American economy
Esther Akutekha, who lives in Brooklyn, New York, has a good job as a public relations specialist that pays more than $50,000 a year.
But because of the $1,440 a month rent on her studio apartment in the Prospect-Lefferts Gardens neighborhood, she never takes vacations, dines out just once a month and scrapes together dinner leftovers for lunch the next day.
“I’m frustrated with the fact that I’m not going to be able to save anything because my rent is so high,” says Akutekha, who says she’s 30ish. “I don’t even know if I can afford” to have children.
Despite an unemployment rate that has reached a 50-year low of 3.7 percent, most jobs across the U.S. don’t support a middle-class or better lifestyle, leaving many Americans struggling, according to a new study.
Sixty-two percent of jobs fall short of that middle-class standard when factoring in both wages and the cost of living in the metro area where the job is located, according to the study by Third Way, a think tank that advocates center-left ideas.
“There’s an opportunity crisis in the country,” says Jim Kessler, vice president of policy for Third Way and editor of the report. “It explains some of the economic uneasiness and, frankly, the political uneasiness” even amid the most robust U.S. economy and labor market since before the Great Recession of 2007 to 2009.
A slight majority of Americans, 52 percent, do live in middle-class households, according to recent annual reports by Pew Research Center. And another 20 percent or so live in upper income households. But that’s because they’re juggling multiple jobs, for example, or relying on investments, an inheritance or other household members who may have higher-paying jobs.
The Third Way study more starkly assesses the jobs in each metro area and the opportunities they’re providing to live a good life. By those measures, the study found that Trenton, New Jersey, and Durham, North Carolina, rank highest among the nation’s 204 largest metro areas in share of middle-class or better jobs. Honolulu and Myrtle Beach, South Carolina, on the other hand, are near the bottom.
Other large cities such as Washington, D.C. (14th) and Boston (61st) surmounted their high-cost burdens with a large share of jobs in flourishing sectors such as government and technology. Houston (18th) is blessed with both vibrant energy and aerospace industries and relatively moderate costs.
The rankings highlight some vivid contrasts. A factory machinist in Cedar Rapids, Iowa, earns an average $45,470 a year, more than enough to meet the $40,046 threshold for a middle-class job in that area.
A similar machinist makes more – $57,220 on average – in San Francisco, but that’s far short of the $82,142 minimum for a middle-class job in that area, according to the report. It costs an average $32,440 a year to rent a one-bedroom apartment in San Francisco, compared with $7,368 in Cedar Rapids.
Akutekha was set back in her career path because she graduated from college during the Great Recession and initially could only find jobs in industries such as fast-food and as an assistant in a law office. She got the public relations position at a nonprofit this year but, “I just feel like I’m back to square one,” she says.
She says she’s not considering moving because major cities such as New York offer far more opportunities in her field.
Nationally, the study found:
The rankings highlight some vivid contrasts. A factory machinist in Cedar Rapids, Iowa, earns an average $45,470 a year, more than enough to meet the $40,046 threshold for a middle-class job in that area.
A similar machinist makes more – $57,220 on average – in San Francisco, but that’s far short of the $82,142 minimum for a middle-class job in that area, according to the report. It costs an average $32,440 a year to rent a one-bedroom apartment in San Francisco, compared with $7,368 in Cedar Rapids.
Akutekha was set back in her career path because she graduated from college during the Great Recession and initially could only find jobs in industries such as fast-food and as an assistant in a law office. She got the public relations position at a nonprofit this year but, “I just feel like I’m back to square one,” she says.
She says she’s not considering moving because major cities such as New York offer far more opportunities in her field.
Nationally, the study found:
30 percent of jobs are “hardship jobs,” meaning they don’t allow a single adult to make ends meet.
32 percent are “living wage” jobs, enough to get by but not to take vacations, save for retirement or live in a moderately priced home.
23 percent are middle-class jobs, allowing for dining out, modest vacations and putting some money away for retirement.
15 percent are “professional jobs,” paving the way for a more comfortable life that includes more elaborate vacations and entertainment and a more expensive home.
A big reason for the dearth of middle-class jobs is the offshoring of millions of middle-income factory positions to countries with lower labor costs, such as China, in recent decades and the spread of lower-paying service jobs. Former manufacturing strongholds that have remade themselves fare better. Cleveland, which has become a health and biotech hub, is ranked sixth while Youngstown, Ohio, is 80th.
Here’s a look at the top five metro areas for middle-class or better jobs:
32 percent are “living wage” jobs, enough to get by but not to take vacations, save for retirement or live in a moderately priced home.
23 percent are middle-class jobs, allowing for dining out, modest vacations and putting some money away for retirement.
15 percent are “professional jobs,” paving the way for a more comfortable life that includes more elaborate vacations and entertainment and a more expensive home.
A big reason for the dearth of middle-class jobs is the offshoring of millions of middle-income factory positions to countries with lower labor costs, such as China, in recent decades and the spread of lower-paying service jobs. Former manufacturing strongholds that have remade themselves fare better. Cleveland, which has become a health and biotech hub, is ranked sixth while Youngstown, Ohio, is 80th.
Here’s a look at the top five metro areas for middle-class or better jobs:
Trenton, New Jersey
Share of jobs middle-class or better: 49.9 percent
Middle-class salary threshold: $50,947
Has largely lost its manufacturing base but it’s the state capitol and an education hub centered around Princeton University.
Durham-Chapel Hill, North CarolinaShare of jobs middle-class or better: 49.4 percent
Middle-class salary threshold: $45,169
Part of the Research Triangle, a vibrant cluster of research universities and related industries such as biomedicine and technology.
Middle-class salary threshold: $45,169
Part of the Research Triangle, a vibrant cluster of research universities and related industries such as biomedicine and technology.
Beaumont, Texas
Share of jobs middle-class or better: 49.2 percent
Middle-class salary threshold: $37,693
Chiefly supported by the oil industry and one of the nation’s largest seaports. But the share of prime-age Americans who have jobs is relatively low.
Hartford, Connecticut
Share of jobs middle-class or better: 49.1 percent
Middle-class salary threshold: $48,203
The country’s largest insurance industry hub and home to the University of Connecticut.
Cedar Rapids, Iowa
Share of jobs middle-class or better: 48.3 percent
Middle-class salary threshold: $40,046
A large center for corn processing and close to the University of Iowa.
Here are the bottom five areas for middle-class or better jobs:
Nassau and Suffolk Counties (Long Island)Share of jobs middle-class or better: 24.4 percent
Middle-class salary threshold: $73,400
Long Island is an anomaly. The cost of living is high and the median household income is about $95,000, but many people who have higher-paying jobs work in Manhattan, which is part of a separate metro area.
Middle-class salary threshold: $73,400
Long Island is an anomaly. The cost of living is high and the median household income is about $95,000, but many people who have higher-paying jobs work in Manhattan, which is part of a separate metro area.
Honolulu
Share of jobs middle-class or better: 25.3 percent
Middle-class salary threshold: $66,049
Has a large tourism industry and is a center for defense jobs. But its cost of living is among the highest in the country.
Myrtle Beach, South Carolina
Share of jobs middle-class or better: 25.3 percent
Middle-class salary threshold: $39,021
Has low costs but many jobs in tourism and other service industries are low-paying.
Town of Barnstable, Massachusetts
Share of jobs middle-class or better: 26.8 percent
Middle-class salary threshold: $60,052
The Cape Cod community is set back by its high housing costs.
Santa Rosa, California
Share of jobs middle-class or better: 26.8 percent percent
Middle-class salary threshold: $61,506
The area has the fifth-highest housing costs the country.
P.S. Amazon leadership: The e-commerce giant said it would increase its minimum wage on November 1 to $15 for all U.S. full-time, part-time, seasonal and temporary employees, including temps hired by agencies.
Labels: Amazon, Paul Davidson, Pew Research Center, The Third Way, USAToday
posted by Juliana L'Heureux | 6:32 AM
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