Mike McCabe’s neighbors in rural Gillespie, Illinois, consider him lucky. After being out of work for a year, he landed a job in January making cardboard boxes at a nearby Georgia-Pacific plant for $19.60 an hour.
He would agree with them, were it not for the fact that his previous job in a steel mill near St. Louis paid $28 an hour. “I’ve had to rethink my whole life to make ends meet on what I’m now making,” McCabe said. “The middle class is struggling for sure, and almost anybody in my position will tell you that.”
Middle-class Americans have fared worse in many ways than their counterparts in economically advanced countries in Western Europe in recent decades, according to a study released by the Pew Research Center.
What is more, as McCabe’s experience suggests, the authors of the Pew study found a broader contraction of the American middle class, even as the ranks of the poor and the rich have grown.
“Compared with the Western European experience, the adult population in the U.S. is more economically divided,” said Rakesh Kochhar, associate director for research at Pew. “It is more hollowed out in the middle. This speaks to the higher level of income inequality in the United States.”
For example, between 1991 and 2010, the proportion of adults in middle-income households fell to 59 percent from 62 percent, while it rose to 67 percent from 61 percent over the same period in Britain and to 74 percent from 72 percent in France.
Households that earned from two-thirds to double the national median income were defined as middle income in the Pew study; in the United States that translated into annual income of $35,294 to $105,881, after taxes, in 2010.
A shrinking middle class is not necessarily cause for alarm, if the reason for the contraction is that more people are moving up the income ladder, said David Autor, a professor of economics at the Massachusetts Institute of Technology.
The proportion at the top did rise, but so did the proportion at the bottom, rising to 26 percent from 25 percent. That is much more worrisome, said Autor, who was not involved with the Pew study.
Moreover, the middle-income group was smaller — and the groups at either extreme larger — in the United States than in any of the 11 Western European countries studied.
And incomes in the middle rose faster in Europe than they did in the United States, according to Pew. Median incomes in the middle tier grew by 9 percent in the United States between 1991 and 2010, compared with a 25 percent gain in Denmark and a 35 percent increase in Britain.