The White Working Class is Earning Less Than They Did in 1996
Donald Trump says our country is a “disaster.” Hillary Clinton and Barack Obama, on the other hand, are touting America’s robust economy. The truth about our economy rests somewhere between those two views. We have low unemployment, rising middle-class wages, and other indicators telling us things are right as rain. But we also have some other troubling signs — inequality, low labor force participation rates, and high levels of personal debt — that are keeping things in perspective.
Now, we have even more uncomfortable facts to contend with. The release of a new report from Sentier Research shows that white working class men are earning less today than they were 20 years ago, in 1996. That means for millions of people, they’re ostensibly no better off today than they were the first time the Colorado Avalanche won a Stanley Cup, or when Twister and Independence Day were in theaters.
According to the report, white working class men earned 9% less in 2014 than they did in 1996 — a substantial drop that goes a long way toward explaining the current anger and resentment many Americans are feeling. The report was published by former Census Bureau officials at Sentier Research and says working class white men, on average, earned $36,787 in 2014, as compared to $40,362 in 1996.
The plight of the working class
It’s important to lay down some definitions, in the case of this report, specifically for terms like “working class.” For their research purposes, Sentier defines the “working class” as those who have graduated from high school, and have not attained or earned a college degree of any kind. College degrees, the report goes on to say, seems to be the big difference maker in earnings.
“The results suggest vastly different experiences for high school and college graduates during the period. For example, during this 18-year period wage and salary income per cohort member for high school graduate cohorts declined by 9 percent overall while the income for college graduate cohorts increased by 23 percent. In 2014, income per cohort member stood at $94,601 for college graduates but only $36,787 for high school graduates,” Sentier’s team writes.
On one hand, you have a group of people who saw their incomes drop 9% in 18 years, and another which saw income increase by 23% over the same stretch. And higher education seems to be the crux of the issue.
Obviously, there are numerous factors that play into this, ranging from globalization to decreasing unionization, education costs, and everything in between. Discrepencies in wage growth, like the ones shown in this report, aren’t easily explained. But it does show that, on average, going after that college degree will pay off — though that may not be the case for every individual.
Is there a solution?
The report digs into the data by looking at incomes of men in ten separate groups, each broken up according to their ages. Starting with 25 and 26 year-olds and going up to 43- and 44-year-olds, Sentier followed the earnings patterns for the 18-year period between 1996 and 2014. The 43- and 44-year-olds in 1996 were 61 and 62 in 2014.
Not only did college education play a role in eventual outcomes, but each age group saw some interesting fluctuations. Older workers, for example, saw wages fall due to reasons like leaving the labor force and then returning to it by taking a part-time job with lower earnings. But, as the headline indicates, the most striking and clear takeaway was for those who remained members of the “working class” — which, again, saw earnings nosedive.
Is there an easy fix? If there was, you’d probably already see it in action. Unfortunately, there are so many variables at play that there isn’t a silver bullet to help turn things around. That is how, as the report says, you end up with a wide gulf between the working class and professional class.
“In 2014, income per cohort member stood at $94,601 for college graduates but only $36,787 for high school graduates.”
Those numbers are hard to ignore.