Commenter Ezra points to this from the Washington Post:

Why America’s middle class is lost

The middle class took America to the moon. Then something went horribly wrong.

Written by Jim Tankersley

DOWNEY, CALIF. — One day in 1967, Bob Thompson sprayed foam on a hunk of metal in a cavernous factory south of Los Angeles. And then another day, not too long after, he sat at a long wood bar with a black-and-white television hanging over it, and he watched that hunk of metal land a man on the moon.

On July 20, 1969 — the day of the landing — Thompson sipped his Budweiser and thought about all the people who had ever stared at that moon. Kings and queens and Jesus Christ himself. He marveled at how when it came time to reach it, the job started in Downey. The bartender wept.

On a warm day, almost a half-century later, Thompson curled his mouth beneath a white beard and talked about the bar that fell to make way for a freeway, the space-age factory that closed down and the town that is still waiting for its next great economic rocket, its new starship to the middle class.

They’ve waited more than a decade in Downey. They’ve tried all the usual tricks to bring good-paying jobs back to the 77-acre plot of dirt where once stood a factory that made moon landers and, later, space shuttles. Nothing brought back the good jobs.

Yes, the stock market is soaring, the unemployment rate is finally retreating after the Great Recession and the economy added 321,000 jobs last month. But all that growth has done nothing to boost pay for the typical American worker. Average wages haven’t risen over the last year, after adjusting for inflation. Real household median income is still lower than it was when the recession ended.

Make no mistake: The American middle class is in trouble.

That trouble started decades ago, well before the 2008 financial crisis, and it is rooted in shifts far more complicated than the simple tax-and-spend debates that dominate economic policymaking in Washington.

It used to be that when the U.S. economy grew, workers up and down the economic ladder saw their incomes increase, too. But over the past 25 years, the economy has grown 83 percent, after adjusting for inflation — and the typical family’s income hasn’t budged. In that time, corporate profits doubled as a share of the economy. Workers today produce nearly twice as many goods and services per hour on the job as they did in 1989, but as a group, they get less of the nation’s economic pie. In 81 percent of America’s counties, the median income is lower today than it was 15 years ago.

In this new reality, a smaller share of Americans enjoy the fruits of an expanding economy. This isn’t a fluke of the past few years — it’s woven into the very structure of the economy. And even though Republicans and Democrats keep promising to help the middle class reclaim the prosperity it grew accustomed to after World War II, their prescriptions aren’t working.

From the Great Depression through the 1980s, American recessions and recoveries followed a pattern: Employers shed jobs when the economy turned south but added them back quickly once it recovered. That changed in the early 1990s and worsened through the 2000s. Jobs came back more slowly, if at all. Even before the 2008 crisis, the 2000s were on track to be the weakest decade for job creation since the Labor Department started tracking the statistics. The great mystery is: What happened? Why did the economy stop boosting ordinary Americans in the way it once did?

The answer is complicated, and it’s the reason why tax cuts, stimulus spending and rock-bottom interest rates haven’t jolted the middle class back to its postwar prosperity.

Downey illustrates the nation’s struggle to resurrect that shared prosperity, and it reminds us what the economy has lost.

… Thompson’s rise mirrored the plant’s, which mirrored Downey’s, which mirrored Southern California’s, which mirrored America’s. North American won the Apollo contract in 1961 and ramped up to 25,000 workers, including production grunts, accountants and engineers. A lot of them bought houses in Downey, big adobe split-levels with lush green lawns. …

By 1990, there were nearly 200,000 aerospace workers in Los Angeles County alone, and the local median income had risen almost 20 percent since 1970, after adjusting for inflation. Then things cratered. The Cold War ended, and defense cuts starved the industry. More than half the county’s aerospace workers lost their jobs over the next decade, and when they found new ones, they weren’t nearly as good. The county’s median income fell more than 10 percent — and stayed there.

In Downey today, “we have a lot of restaurants,” Thompson said. “There’s a lot of minimum wage. People take those jobs.”

Thompson now runs the Downey Historical Society, a dimly lit relic stuffed with space memorabilia. He sat in his office, amid model rockets and black-and-white posters of prop planes, next to a playground called Apollo Park. His wistfulness faded, and he turned, instead, to hope — hope that his country would reclaim its past glory, if not economically then at least astronomically.

I believe, he said, that Americans will walk on Mars someday.

He’s just not sure how they’ll get there.