The New Yorker, October 16, 1995 P. 113

AMERICAN DREAM DEPT. about the death of the middle-class in America. Quotes William J. McDonough, 61, the president of the Federal Reserve Bank: "It is deeply troubling that during the nineteen-eighties the real wages of low-skilled workers in the United States have fallen sharply, both in absolute terms and relative to the wages of highly skilled workers." For a pillar of capitalism like McDonough to express concern about low wages is surprising. For him to then question whether America "will be able to go forward together as a unified society" is virtually unprecedented. Tells about the "Golden Era" in America, 1947-1973, when the incomes of all Americans rose. In the 1973-1993 period, this trend has not continued; the lowest two quintiles have lost wages, the middle quintile has remained at the same level, and only the uppermost quintile has shown real growth. The changing distribution of income suggests that the country has now split into four groups. At the top, there is an immensely wealthy elite which has never had it so good. At the bottom, there is an underclass, which is increasingly divorced from the rest of society. And between these extremes there are, instead of a unified middle class, two distinct groups: an upper echelon of highly skilled, highly educated professionals, who are doing pretty well; and a vast swath of unskilled and semi-skilled workers, who are experiencing falling wages, stagnant or declining living standards, and increased economic uncertainty. To label this group "middle class" doesn't make sense. The phrase implies two things--rising living standards and a high degree of economic security--but may no longer apply.

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