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We Killed the Middle Class. Here’s How We Can Revive It.
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America is once again engaged in the process of rebuilding its economy from a devastating recession. The United States cannot afford another feeble and prolonged rebound, in which the gilded chambers of the economy recover faster than all the others, and it need not have one. But it may be slipping into that trap again, because our leaders have not learned the lessons of the nation’s great postwar boom, the last time America delivered lasting prosperity and security for the middle class. They have not learned that the way to create another middle-class boom is by investing in workers.
I’ve spent two decades writing and reporting about politics and economics, in Washington and around the country. For much of that time, I have been consumed by a question: Where did the good jobs go for the American middle class after the great postwar boom faded 40 years ago, and where will we find new ones to replace them? I have interviewed laid-off factory workers in Ohio, home health aides in Virginia, an aspiring lawyer who watched her mother lose her childhood home in Chicago, a relentlessly upbeat airport valet who earned poverty wages for wheeling elderly passengers through the terminal. I have watched more equation-stuffed slide decks at economics conferences than I would deem medically advisable. From the people and the cutting-edge research, I have built an understanding of what actually made the middle class boom after World War II, and what it will take to rebuild it from our pandemic crisis now.
My reporting taught me that the United States economy enjoyed a golden era of shared prosperity in large part because, during the war effort and the civil-rights era, America made it easier for people who had been previously shut out of economic opportunity—women, minorities, immigrants—to enter the workforce and climb the economic ladder, to make better use of their talents and potential. Research from economists at the University of Chicago and Stanford attributes two-fifths of our per-worker growth since 1960 to that improved flow of talent. Reducing discrimination made our country faster-growing and more productive. It lifted everyone up, including white men, who have set the rules of the American economy since its founding.
And I’ve also learned what isn’t working. I’ve seen the government bail out airlines and flood the financial system with money to keep it functioning, while leaving individuals to slowly scrape up the pieces of their shattered careers and dreams. I’ve watched politicians harness the politics of fear to lash out at immigrants, ignoring the doctors who have manned ventilators during the pandemic and the farmworkers who have kept produce flowing to Amazon’s delivery trucks. I’ve seen the public turn a blind eye to the centuries of systemic oppression that have kept Black women who don nursing scrubs and ring up groceries from earning and saving enough to buy their own homes. And in the depths of a crisis, I’ve watched populists pit one struggling group of Americans, who happen to be white men, against struggling Black and Latino men, and against women of all races.
The barriers that block some workers from advancement, such as inadequate parental-leave policies, federal limits on imported brainpower, and overt racial discrimination, are holding us all back. Those barriers don’t just hurt women and men of color. They’re shrinking the middle class, and they’re hurting our democracy.
Wide-ranging economic research shows that strong middle classes breed political and social stability. “Societies with a strong middle class experience higher levels of social trust but also better educational outcomes, lower crime incidence, better health outcomes and higher life satisfaction,” a 2019 report from the Organization for Economic Cooperation and Development concluded, citing several studies. “The middle class champions political stability and good governance. It prevents political polarization and promotes greater compromise within government.” The report warned that members of the middle class increasingly say the economy is unfair because they see so much income and wealth flowing to the rich, while their own lifestyles—their middle-class security blanket of a home, education, retirement savings—have become more expensive.
As America climbs out of its coronavirus recession, it must reinvest in its middle class, and in the people who will bring good, middle-class jobs forth in the economy. I’ve encountered a lot of very smart people while reporting, who have detailed thoughts on how to do just that.
Some of the solutions are themselves fodder for entire books, such as reducing the cost of American health care or bringing down soaring housing prices in superstar areas like Silicon Valley. Many are targeted at specific groups who are being held back. William Darity, a Duke University economist who has exhaustively chronicled discrimination and its effects, proposes a suite of programs to empower Black Americans to earn more and build wealth, including paying reparations to the descendants of enslaved people and providing a living-wage, government-guaranteed job for anyone who wants to work. In April, I tuned in to an online conference call where Darity said the pandemic recession had made those measures all the more important. The virus, he said, had exposed “the deep historical residue of health disadvantage that was already embedding itself in the Black community.” He predicted that it would further worsen income and wealth inequality on racial lines. Sure enough, it has.
Heather Boushey, the president and CEO of the Washington Center for Equitable Growth and an adviser to the Democratic presidential nominee Joe Biden, was one of the first economists to talk at length with me about the middle class and how to revive it. She favors policies that clear the way for women to work and earn more in the economy, allowing us to tap the full potential of our most skilled workers. Boushey proposes expanding paid leave for parents and caregivers, reducing or eliminating the cost of child care for working families, and adopting a universal prekindergarten system, all to support working women and their children, and advance women in the workplace. As the pandemic unfolded in the spring of 2020, she pushed for new and permanent policies to safeguard workers on the front lines of the virus response—both to protect those workers and to give Americans confidence that the people taking care of them during the outbreak would be taken care of themselves. She told me that the countries faring best in the crisis had “paid sick leave, universal access to affordable health care, and a robust public-health infrastructure”—along with income supports for workers and businesses, which automatically ramped up when the economy contracted.
Libertarian economists like Matt Mitchell at George Mason University, a crusader against the “crony capitalism” that favors the politically connected, support policies to end special favors from government that hold some workers back. These include eliminating state occupational-licensing requirements that prohibit people from working in certain fields, such as hair braiding, without a particular government-approved training certificate, and killing tax loopholes and direct subsidies that benefit handfuls of companies lobbying hard to maintain their edge over would-be rivals. The government response at all levels to the 2020 pandemic only reinforced this view: To adapt to the new world of economic restrictions and the realities of the health crisis, officials suspended a lot of regulations that some economists say never should have existed in the first place. They allowed bars to sell takeout cocktails and, in some places, deliver them to people’s homes. They let doctors and other health professionals work in states even if they did not have a license there. Some areas extended that same ability to foreign doctors who were not licensed in the United States. There’s no reason those restrictions should return.
One of my favorite professional antagonists, a liberal economist named Dean Baker who delights in criticizing the reporting of The Washington Post and The New York Times on his personal blog, is an often-lonely crusader for a similar change that would introduce elite white men to the same sort of labor competition that manufacturing workers face—by allowing doctors, lawyers, and other professionals who are trained abroad to more easily emigrate to the United States and ply their trades when they get here.
Late in 2019, I called Marianne Wanamaker, a University of Tennessee economic historian and former member of President Donald Trump’s Council of Economic Advisers, whose research has found that young Black men have experienced no gains in relative economic mobility since 1870—a stunning lack of progress. I asked her what policy change she would make to finally unblock the upward path for Black men. She said that she, like some of her more liberal colleagues in the profession, supports universal prekindergarten. But, she said, “if you’re going to address some of the core problems, you have to move back into people’s lives”—on a personal level. She was thinking of the work toward racial reconciliation in a church congregation, or her own family’s investment in their refugee neighbors in Knoxville. “The solution has to be us,” she said, “and how we treat people and understand people and love people, and how we interact with them in society. That’s a huge challenge. But it’s not government’s to solve.”
Government has played an important role in breaking down barriers to advancement; it’s hard to see how women and Black Americans would have made it even this far without federal civil-rights legislation, for example. But I also understand the hesitancy that many Americans feel about turning over more of the task of balancing the economy to politicians. American history is full of examples of political leaders using their power to block some groups from advancement. So I favor measures that meet a narrow test: Do they help people build their own human capital? Do they help them gain income and wealth and stability, so that they can survive the next recession, whether it is mild or severe? Do they defeat the power structures that hold people back? Do they help Americans do what they’re best at?
Policies that pass this test would help disadvantaged Americans get through college, find jobs, and advance in the workforce. They would aggressively punish discrimination and tear down power structures that exist to protect white elites. They would foster and train a new generation of entrepreneurs, homegrown and imported, to disrupt the competition calcification of the American economy and create jobs that allow working-class whites—and everyone else—to return to the work that best utilizes their talents. They would diminish government interventions in parts of the economy that are ripe for favoritism, and diminish the ability of opportunistic companies and people to game the economy for their own limited benefit, to the detriment of everyone else. They would protect against job losses in bad economic times and promote fair pay in good ones, and they would strive to keep the economy humming with strong growth and low unemployment—the formula that has produced sustained income gains that raise pay for everyone and pull people into the middle class.
If you add up all those initiatives, you might make a real dent in the problem. But you still won’t be going far enough. This is where I agree—naively, perhaps, but earnestly—with Wanamaker. The big change we need is attitudinal. We need a national commitment to helping one another succeed and get ahead.
We need to stop ourselves and others from discriminating by race and gender, stop vilifying the people who don’t look like we do. Elite white Americans, in particular, need to work harder to help everyone else enjoy the same opportunities they do. They should acknowledge that they have benefited disproportionately from the technological and globalization trends of the past 40 years, which amplified the advantages that elite white men have enjoyed for centuries. If they are interested in helping lift others up, or even just in optimizing the performance of the economy so that it will keep delivering gains for people like them, they should be willing to pay higher taxes, to fund investments in human-capital accumulation for everyone else. I am convinced such investments would make America more productive and entrepreneurial again; they would empower the people who will create new, good jobs.
By helping one another reach our full potential, we’ll help the whole country get its swagger back. This is a hopeful realization, but also a daunting one. We’ve never really achieved that goal as a nation, not even in the booming 1950s, nor in the civil-rights era. But I truly believe that we could achieve it now.
“It takes powerful social movements, I think, to move these things,” the University of Chicago economist Chang-Tai Hsieh, the lead author of a breakthrough paper on how the upward mobility of women and Black Americans supercharged the American economy in the postwar era, told me in an interview. “The ’60s and the ’70s in the U.S., I think, were a very special time,” he said. But, he added, “I do think there is the potential for a similar burst, if we had a similar type of revolution again, to tear down more barriers.”
I cannot and will not offer you a simple solution for that task. I don’t see a lot of complex problems around me being solved by simple plans. Like so much else in my career, I owe that perspective to Bill Woo.
Bill was my college mentor, my journalistic hero, and a great friend. He had been the editor of the St. Louis Post-Dispatch newspaper—the first Asian American to ascend to the highest job at one of the country’s large daily papers—until he realized he wanted no more part in his bosses’ slow march toward a smaller staff, shorter stories, and a diminished product that padded profits but shortchanged readers. He resigned, and later, he almost certainly saved me from a lifetime of studying and practicing law.
During my freshman year at Stanford, Bill taught a small seminar on writing and reporting the news. He ran us through mock news events and forced us to write on deadline. He unspooled hours-long, perfectly crafted tales of his news-gathering youth in tones that barked with joy and fell to a whisper so low you could barely hear it over the hum of the air-conditioning.
I think about the American progress that the arc of his life represented. More than a century after Chinese laborers laid the railroad tracks that built the fortune of a man named Leland Stanford, who used his money to create a university, that university hired William F. Woo, son of an American mother and a Chinese father, to teach journalism.
He died of cancer in 2006, months before my son was born. When I spoke at his funeral in St. Louis, I told the mourners that I had kept my assignments from his class, not because of the amateur writing I had produced, but for the notes he had left me in the margins in a sharp, red ink. I think of one of them in particular almost every day.
“I really hope you keep this message with you always,” Bill wrote. “There are no quick fixes, ever, for the things we hold dearest.”
But there is, I have learned, a good place to start.
This article is adapted from Tankersley’s recent book, The Riches of This Land: The Untold, True Story of America's Middle Class.
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JIM TANKERSLEY is an economics reporter for The New York Times in Washington and the author of The Riches of This Land: The Untold, True Story of America’s Middle Class.
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