Building a robust middle class

By Joseph McDonnell, Special to the BDN
Posted Oct. 22, 2012, at 3:59 p.m.

Public universities have a long history of educating promising students who otherwise could not afford a postsecondary education. For many of these students, access to a college education has provided an opportunity to enter the middle class. While a college education alone is no guarantee of success, it greatly improves the odds — especially in an increasingly competitive global economy.

When I studied in India as a graduate student many years ago, I was struck by the class divisions within the country — vast numbers of people living in poverty and relatively few enjoying the country’s wealth. In sharp contrast to the United States, India in the 1970s lacked a middle class. Today, India still has a wealthy elite as well as vast numbers in poverty, but education, the information revolution and a global economy have brought many more into the middle class. The same can be said for other “emerging economies” such as China, Brazil and Russia.

Surprisingly, the middle class in the United States has declined in the last 40 years. A recent study by the Pew Research Center reported that just more than 50 percent of the adult population in this country could be considered middle class — a drop from 61 percent in 1971. In what one economist described as the “great divergence,” the United States now has a wider gap between rich and poor and fewer people in the middle.

As a result of this expanding gap, a greater portion of the nation’s wealth has shifted to the upper class. The middle class earns only 45 percent of the nation’s income, a drop from 62 percent 40 years ago, while the upper class receives 46 percent, 17 percent more than it earned in 1971.

Forty years ago, my father and other middle class breadwinners were able to support families with stay-at-home mothers. Middle class families owned houses and cars and could scrape together enough with some low-interest loans to pay for college for their children. Today, the typical middle class family cannot make ends meet with a single income, and many struggle on two incomes. Middle class salaries have stagnated, and many traditional blue-collar jobs — especially in manufacturing — have disappeared. The costs of housing, health care, and higher education have become big impediments to a thriving middle class.

A recent report from the National Employment Law Project revealed that most of the jobs recovered since the fiscal crisis have come in the lower-wage segment. The report confirmed concerns that there is a hollowing out of middle class jobs in this country. Lower-wage occupations accounted for 21 percent of the jobs lost during the great recession but account for 58 percent of recent job growth. Jobs in manufacturing, construction and information — traditional middle class jobs — accounted for only 22 percent of the new jobs, even though this sector accounts for 60 percent of the lost jobs.

Reversing the trend will not be easy. It will require a multipronged strategy, but education and skill development offer the best hope for those seeking entry to the middle class. A recent study by Georgetown University’s Center on Education in the Workplace reported that, “It’s a tough job market for college graduates, but far worse for those without a college education.” It found that more than half the jobs in the post-recession have gone to college-educated workers — even though they represent only one third of the workforce. The outlook is particularly discouraging for unskilled workers whose jobs are more often threatened by automation and outsourcing, and whose wages hold little prospect for much more than eking out a subsistence living.

Today, states spend a much larger share of their budgets on health care and have cut back on funding for higher education. Public universities have increased their tuition to make up for the shortfall, which leaves students graduating with large loans into an uncertain job market or, in some cases, not even able to complete a degree.

State legislators ought to make funding postsecondary education a top priority, and educators should meet legislators halfway by re-imagining the learning experience to deliver a better product at a lower cost.

Education alone may not be sufficient to restore the middle class, but it’s a necessary first step. In a global economy, the standard requirement will be adaptive skills marked by an ability to engage in continuous learning and skill development. A nation with the most educated workforce in the world has the best chance of building a vibrant middle class.

Joseph McDonnell is dean of the University of Southern Maine College of Management and Human Service, and a faculty member in the Muskie School of Public Service. He formerly had been dean of the college of business at Stony Brook University in New York, and had held executive management positions in both Fortune 500s and startups.

http://bangordailynews.com/2012/10/22/opinion/building-a-robust-middle-class/ printed on December 25, 2014