TOPICS > Economy

Writer Asks: Can the Middle Class Be Saved?

September 1, 2011 at 12:00 AM EST
The cover article in the latest issue of The Atlantic magazine asks: "Can the middle class be saved?" Jeffrey Brown speaks with author Don Peck about his take on the erosion of America's middle class.
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TRANSCRIPT

JEFFREY BROWN: Finally tonight, in the last several weeks, we have been looking at the problem of income inequality in America, focusing on the extreme top and bottom.

Recently, I talked with a writer who has studied what he sees as the erosion of the vast middle. Don Peck’s cover article in the latest issue of The Atlantic Magazine asks, “Can the Middle Class Be Saved?” His new book on the subject is titled “Pinched.”

Here’s our conversation.

Don Peck, welcome back.

DON PECK, The Atlantic Magazine: It’s a pleasure to be here.

JEFFREY BROWN: Now, we have been talking a great deal of late about the ongoing jobs problem. You’re making a case that there is something even bigger going on.

DON PECK: Yes, absolutely.

You know, if you look at the structure of job losses in this recession, what you find is that, overwhelmingly, the jobs lost on net are what economists call middle-skill jobs. These are the jobs in manufacturing, in non-managerial office work that have traditionally provided a middle-class life to people with a high school diploma, but not a college degree.

JEFFREY BROWN: Those are the ones hit hardest now?

DON PECK: They have been hit hardest in this recession.

Companies have pulled forward restructuring decisions and offshoring decisions that otherwise would have taken years to play out. And so that group of people, high school graduates, really, have been hit extremely hard in this recession. But that’s really just an acceleration of a trend that’s been happening for a long time.

JEFFREY BROWN: Yes, that’s what I was going to ask you, because we have talked about some of these things over time. So this is long-term trend. Now it just gets worse.

DON PECK: Exactly.

If you look at the aughts in general, wages were not rising for people with high school degrees. Job growth was quite flat. That was really covered up to a large extent by the housing bubble and by rising housing prices, which gave people a sense of progress, but, of course, you know, that fig leaf has now blown away.

JEFFREY BROWN: Can you give me an example? You went out in the country and you talked to people.

DON PECK: Yes. Well, so I talked to one guy outside of Reading, Pa. I call him Frank Massoli in my book. And he’s an Italian-American in his mid-40s. He’s worked outside for much of his life, began in factories, now had more recently worked as construction foreman.

And he lost his job, you know, as the recession started. And he’s a great guy. He had adopted eight kids with his wife before they split up. But he really struggled when he lost his job. He — he knew there were retraining opportunities available to him, but he told me: I have never been much of a classroom guy. I have struggled in classroom. And it’s been a long time anyway. I feel like I’m too old for retraining.

An interviewing coach sponsored by his church group tried to help him interview. And she told him, you know: Frank, you’re just not going to get a job given your very gruff style of self-presentation outside of construction. But that’s what he was used to.

And so he didn’t really know what to do. And what he ended up doing was essentially rooting through his neighbors’ trash for a year-and-a-half or so. He learned the trash pickup schedule for his neighborhood, his town and surrounding towns. He would go out in his pickup, sometimes with his kids, at night, and try to scavenge old appliances that he could resell for scrap.

So, you know — and his plight really, I think, is representative of the plight of many middle-aged people, especially blue-collar middle-aged men who have not only been struggling in this recession. They have been struggling for a long time as the economy has evolved.

JEFFREY BROWN: Well, when you look — put this together in a larger picture, you write, “America’s classes are separating and changing.”

So a tiny elite, a professional class that is going sideways, at best, I guess, and then this kind of what you’re calling the nonprofessional class, which is going backwards.

DON PECK: Exactly.

I talked to a lot of college graduates and parents of college graduates who are really worried about their future or their children’s futures, and with good reason. With the economy so weak, few people are getting ahead outside of the economy’s upper echelons.

But I think that problem is one that’s temporary and related to current weakness. There’s something more worrying going on for people who don’t have a college degree, whose skills have been devalued by globalization, and even more so by the encroachment of technology.

And I think, as a society, we need to recognize that many of the people who are falling out of the non-professional middle class without help are not likely to regain it.

JEFFREY BROWN: One of the aspects that you look at here is, I think, you refer to as a kind of geographical segregation. You can see what you’re talking about in specific places.

DON PECK: Yes, absolutely.

I mean, if you think about the recession and the recovery, they have both been very uneven. So, Washington, D.C., is the most optimistic city in the U.S. right now…

JEFFREY BROWN: Really?

DON PECK: … as to the state and future of the economy.

You know, wages in Manhattan and Silicon Valley have been growing remarkably rapidly. In the places where the meritocratic elite, the most highly educated, highest skilled people have increasingly congregated over the past 20 years, the recession was lighter, housing fell less, recovery has begun.

In many of the former middle-class meccas, though, places like Tampa and Phoenix and Las Vegas, where people with moderate education, limited savings tended to go over the last 20 years to try to get in on a middle-class lifestyle, we see tremendous pain.

JEFFREY BROWN: You note about Tampa specifically here…

DON PECK: Yes. Well, Tampa — Tampa has really collapsed.

A lot of its growth was predicated on housing. And it built out more and more housing. People took out home equity loans. And now what you see is a shrunken economy. Tampa doesn’t have a particularly high base of human capital, fewer productive — highly productive industries than many cities. And in the exurbs of Tampa in — particularly, you really see a lot of pain, a lot of disappointment.

JEFFREY BROWN: And the other aspect, I mean, sort of looking at this longer term and the maybe more provocative side to this is the — I think you refer to it as a cultural segregation, the long-term implications of what this could mean for a large segment of our population culturally.

DON PECK: That’s right.

You know, when you — when you look at the cultural habits and family structure as well of people with high school degrees in the U.S., you know, their families, their outlooks in the 1970s closely resembled those of college graduates.

Today, the families of high school graduates closely resemble those of high school dropouts in terms of the happiness of marriage, the likelihood of divorce, the prevalence of single-family — of single-parent households.

So, as life has become more insecure for the non-professional middle class, their family and cultural habits have also changed. And I think this is profoundly worrying, because children who grow up in unsettled households don’t do as well as children who have very stable childhoods, and increasingly you are seeing big class divisions, big geographic divisions in the families and communities in which these children are growing up.

That could have big implications for the whole idea of opportunity and upward mobility in America.

JEFFREY BROWN: Now, let me just ask you briefly, is it your sense that — because we have just come after this big political debate here in Washington. Is it your sense that leaders, Republican and Democrat, across the board, have a sense of these long-term trends, or is it just the focus on the here and now?

DON PECK: You know, I think there’s not as much recognition of these trends as there should be. In part, there is a very myopic focus right now on the budget and on the debt.

But I also think, because of the geographic segregation that we have seen, the most influential people in the U.S., and including its political class here in D.C., they don’t see many of the struggles of everyday Americans. They don’t see the family problems that a lot of people have.

And I do think that has led them to focus less, perhaps, on many of the cultural problems and long-term problems that are really plaguing the nation today.

JEFFREY BROWN: All right, Don Peck’s work is in The Atlantic Magazine and in the new book “Pinched.”

Thanks very much.

DON PECK: Thank you.

JEFFREY BROWN: In our next story, we will look at whether the inequality gap is growing as much as conventional wisdom has it.