President Barack Obama's State of the Union address Tuesday will center on how to generate millions of new jobs -- specifically, jobs that support a middle-class standard of living.
But many economists say the White House's focus skips over a stark reality: Most of the jobs that became part of the American economy in recent decades pay too little to support a middle-class family.
Despite four years of Obama policies aimed at altering this fact, most of the jobs created on his watch can still best be described as low-wage.
“The reality is most of our job growth isn’t going to be in manufacturing, it’s going to be in the services industry," Chris Owens, the executive director of the National Employment Law Project told The Huffington Post. "We need to enable those people to get a foothold into middle class.”
A middle-class job is one that pays between $13.84 and $21.13 per hour -- or between $28,787 and $43,950 per year -- and enables a family to afford the trappings of a middle-class lifestyle like a house, car and college education for their kids, according to NELP. Since the beginning of the economic recovery, 60 percent of the jobs created have fallen short of that standard.
While most of the jobs created during the recovery were in the low-wage service sector, those who still have a middle-class job are making less. The median household income declined nearly 5 percent to $50,964 between June 2009 and June 2012, according to an August report from Sentier Research.
“Over the last few decades, a lot of Americans have seen their earnings either stagnate or actually decline relative to people who had comparable jobs,” Michael Greenstone, an economics professor at MIT, told The Huffington Post. “That’s the first time that’s happened in American history. It’s a threat to the economy and to the social fabric that holds the country together.”
The middle-class has seen its income decline by 5 percent over the last decade, but the group's drop in wealth is even more stark, according to an August report from the Pew Research Center. Over the past 10 years, the median wealth for the middle class declined 28 percent, the report found. And Americans are feeling the gloom: More than 80 percent of Americans who see themselves as middle class say it's harder to maintain a middle-class lifestyle than it was 10 years ago.
Owens notes that manufacturing jobs many associate with the middle class weren’t always that way. Instead, an environment that combined strong unionization and regulations that established wages and workplace conditions, turned difficult work into desirable jobs. Even with manufacturing wage declines of recent decades, manufacturing workers earn more than those in comparable jobs in other industries, according to a February Brookings Institution report.
Boosting the middle class may require changing the standards for the jobs that are becoming more common in America, Owens said, like home health care aids, retail clerks and food servers.
Another route to growing the middle class may be one that Obama announces Tuesday: prioritizing education. The market for job-seekers with more education has improved in recent years, while the number of college graduates has remained basically flat, according to Greenstone.
“If you want to fix the problems with the middle class, numbers one and two on the list are to improve existing education systems and find ways to encourage people to stay in school,” Greenstone said.
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