The Middle/Working Class Has Not Been “Hollowed Out”

By Jeremy Horpedahl. Excerpt:

"Claims that the middle class or working class has been “hollowed out” in the US have been made for years, or decades really. The latest claim is an essay in the Free Press by Joe Nocera. But these claims are usually lacking in data, while strong in anecdotes. Let’s look at the data.

One data point we might use is median weekly earnings for full-time workers with a high school diploma, but no college degree. That sounds like a reasonable definition of “working class.” Here’s what that data looks like adjusted for inflation with the PCE Price Index:

Notice that the latest data point is for 2024, which is the highest they have ever been in this data series, and likely higher than any point in the past. While many point to about the year 2000 as when troubles for the working class started (this is when manufacturing employment really fell off a cliff, and China joined the WTO in 2001), inflation-adjusted earnings have risen 11% for this group of workers since then. You might say that’s not a lot of growth — and you would be correct! But this group is better off economically than in the year 2000, which is a point that gets lost in so many discussions about this issue.

But that’s just a national number. Might some states that were especially hit by manufacturing job losses be worse off? Nocera mentions North Carolina and the Midwest. To answer this, we can use BLS OEWS data, which has not only median wages by state, but also the 10th percentile wage — the lowest of the working class. Here’s what median real wage growth (again inflation-adjusted with the PCEPI) since 2001 (the earliest year in this series with comparable data):

Notice that every single state had positive real median wage growth from 2001 to 2024. Every single one! North Carolina median wages beat inflation by 24%. The lowest is Michigan, just barely above inflation, one of the hardest hit states by manufacturing job losses — but even theirs is positive. And see what it looks like for the 10th percentile earners:

Again, every single state beat inflation at the 10th percentile. Michigan, the laggard at the median, looks much better here, beating inflation by 39% at the 10th percentile. Wow! North Carolina 10th percentile workers beat inflation by 33%, even better than their median workers. In fact, only 6 states had worse growth at the 10th percentile than at the median (AL, LA, MS, OK, SC, and WV), but all of these states still had positive, inflation-adjusted wage growth from 2001-2024."