The causes of the shrinking middle class

The Decrease in Middle-Class Wage Earners

The various shifts in our economic system have all led greatly to the negative decrease in the proportion of middle-class wage earners. This has piqued the public’s curiosity and concern, resulting in various protests around the world, including in major economic powers such as the United States of America and the United Kingdom. Recent research by Brenner, Brett, and Cawley (30) suggests that the downward trend may lead to political and social unrest. The author of this paper will focus on the changes in the distribution of earnings of families that have made adults in the families take up two or more jobs to compensate and sustain their livelihood. Some of the factors discussed will include the decline of employment in the smokestack industries that hold a significant number of production workers in the middle class, the rapid changes and growth of technology companies, and the gradual change from goods production to service delivery industries.

Decline in the Smokestack Industries

The smokestack industries include the automobile industries, blast furnaces, and the steel production industry. The motor industry is estimated to employ about 2 million employees, while the steel industry comes closer with an estimate of 500,000 workers either directly or indirectly employed to work in the facilities. The smokestack industries are known for their better pay in wages, the average hourly earnings of production workers in this industries are sustainable to the with the current economy. Thus a decline in this industries has a significant impact on the employee since the majority are left unemployed or are forced to seek low-wage jobs. Majority of the workers opt for low-wage jobs; however, they take up two or more jobs to sustain their families.

Growth of High Technology Industries

The shrinking of the middle class can be firmly attributed to the rapid changes and growth of big technology companies. The change in technology has created a division of social classes into two; the high and low-paid workers, as well as very few number of middle-class earners. These high-tech companies offer great pay for professional employees and top-level managers while paying relatively little pay to service workers. This difference in pay grades is s contributor to the fact that many adults are taking up two jobs to sustain their families.

Shift From Goods Production to Service Delivery Industries

At the start of the year, 2008 service jobs were estimated to be about 83% of total employment in the United States, the figure has increased with time to a current estimation of around 86% of and is expected to remain steady into the next century (Ehrenberg, Ronald, and Smith, 65). The service-producing industries include the transportation, finance, real estate and public administration among others. This type of industries require professions with relevant working experience. However, part-time employees offer low-paying occupation. The low pay and lack of relevant skills needed forces the middle-class adult take up to two jobs.

Conclusion

According to the U.S Bureau of Labor Statistics (BLS), the unemployment rate stands at 4.3% (Ehrenberg, Ronald, and Smith, 45) which indicate that America is heading towards what economists refer to as full employment. However the plight of low-income makers is not shown in the statics, it is believed that almost 7.6 million adults in the U.S held multiple jobs in July 2016. The primary reason for the multiple job holding being that a single job does not provide a sufficient income.

Work cited

Brenner, Brett C., and James C. Cawley. “At-Risk Occupations in Power Line Fatalities: How Do Occupational Safety and Health Administration and US Bureau of Labor Statistics Data Compare?.” IEEE Industry Applications Magazine 22.3 (2016): 27-32.

Ehrenberg, Ronald G., and Robert S. Smith. Modern labor economics: Theory and public policy. Routledge, 2016.