1. CASE STUDY: Is The Middle Class Disappearing? First Year – AB Psychology 16 February 2010 Bibliography: Schaefer, R. T., & Lamm, R. P. (1992). Sociology: Fourth Edition. Is the Middle Class Disappearing? (p.229). New York: McGraw-Hill, INC. Summary: The belief that the poor can rise to middle-class status has long been central to the image of the United States as a
land of opportunity.
However, according to Lester C. Thurow, noted professor of economics and management at the Massachusetts Institute of Technology, the American middle class is actually disappearing. Using a widely accepted definition of a middleclass household as one with an income between 75 percent and 125 percent of the nation's median household income, the range of American middle-class incomes in 1989 was $21,680 to $36,133. On the basis of this standard, about 23 percent of American households were classified middle class in 1989, as compared with 28 percent in 1967. Closer analysis by Thurow indicates that, of those who relinquished their middle-class standing, about half rose to a higher ranking in the American class system, while half dropped to a lower position. Consequently, in Thurow's view, the United States is slowly moving toward a
bipolar income distribution.
In simpler terms, a broadly based middle class is being replaced by a growing population of rich and poor Americans. Economist Ravi Batra observes that the
Unites States is fast becoming a nation of two classes, with the haves growing richer, the have-nots growing poorer, and the middle class slowly sinking into oblivion.
Thurow and a number of other scholars have identified a number of factors which contribute to the decrease in the proportion of households categorized as middle class: Unemployment. The economy of the United States has experienced serious rates of unemployment since the late 1970s. When a prime wage earner loses his or her job, a household may suddenly fall from middle-class to lower-class status. Foreign competition has been especially damaging for those heavy industries, such as steel and automobile manufacturing,, which employ a substantial number of skilled and blue-collar workers. When such industries shrink, the American middle class shrinks along with them. New growth industries and nonunion workplaces. Through the efforts of strong labor unions, workers in traditional heavy industries have generally achieved middle-class incomes. By contrast, new
high tech
industries such as microelectronics remain largely unorganized by unions, and these workers fall into the category of low-wage assemblers. Still another fast-food restaurants, has added employment opportunities, but again at the low end of the wage scale. The rise in the single-mother households. The United States has witnessed a staggering rise in the divorce rate. In 1965, there were 479,000 divorces; by 1989, there were almost 1.2 million. This increase in the divorce rate has contributed to an equally dramatic rise in the proportion of households headed by single mothers. While most divorced and separated women retain custody of their children, few are able to command incomes as high as those earned by their husbands. As a result, many households headed by single mothers lose the middle-class status that they had enjoyed before the divorce. The rise in two-income households. The discussion above has focused on factors which have led Americans to fall below their previous middle-class standing. However, the increase in households with dual wage earners has had the opposite effect. With the benefit of a second income, many of these households have been able to leave the middle class and achieve even higher incomes and status.