Separate Realities: The Dream and the Iceberg - Scarecrow Press

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64 Chapter 2 of the sources, three related developments increase the intensity and extent of the downward mobility experience for workers and their families: massive job losses, income reductions, and downward intergenerational drift among young adults from middle-income (or upper-middle-income) families who cannot find jobs that will allow them to replicate their parents’ income levels or living standards. Down by Work: Lost Jobs One study estimated as many as one-fifth to one-third of all workers experienced downward mobility in the 1980s due to job displacement. 97 Such estimates are not surprising given that from 1979 to the mid-1990s, more than forty-three million jobs were eliminated in the United States due to displacement and downsizing. 98 And despite the fact that more new jobs have been created than have been eliminated since 1979, most new jobs (over 70 percent) involve work in low-paying industries, and these industries are also projected to provide the largest share of all new U.S. jobs through 2014. 99 In the manufacturing sector, which is highly unionized, 2.5 million jobs were lost between 1979 and 1999, and 700,000 more jobs in that sector disappeared in the period from July 2000 to May 2001. 100 After the U.S. economy entered a recession in March 2001, more jobs were lost. Job losses accelerated following the September 11 terrorist attacks, and by August 2003, a total of 2.4 million nonfarm U.S. jobs had been lost due to the recession and the “jobless recovery” that followed. “In June 2004 . . . the economy was still down 1.2 million jobs from the March 2001 peak—an unparalleled occurrence this far into a recovery.” 101 In the mid- and latter 2000s, the number of jobs created in the United States each month was often below the one hundred fifty thousand new jobs needed each month “just to absorb the labor market’s natural population growth.” 102 Down by Money: Lost Income The income consequences of job displacement are typically disastrous for what were formerly middle-income wage earners. Workers displaced from the auto, steel, meatpacking, and aerospace industries in the mid-1980s reported income losses of about 44 percent compared with their pervious earnings in the first two years after being laid off. 103 In the mid-1990s, of 2.2 million full-time workers laid off in 1993 and 1994, only two-thirds had found full-time work by 1996. More than one-half of this group was earning less than what their previous jobs paid, and more than one-third experienced pay cuts of 20 percent or more. The average weekly median earnings for this group declined about 14 percent, but older full-time workers (in their late fifties and early sixties) who found new jobs experienced pay decreases averaging 37 percent. 104
Separate Realities 65 During the 1999–2000 period, two million workers permanently lost jobs they had held for three or more years due to plant closings and other forms of job displacement. A study of this group found that by early 2002, of the 92 percent who had lost full-time jobs, only 62 percent were again working in full-time wage and salary jobs. Of this group, half reported earning less than what they had previously earned, and 25 percent reported earnings on their new jobs that “were 20 percent or more below those on the job they had lost.” 105 As was the case in earlier studies, displaced older workers (forty-five to sixty-four) experienced the greatest losses in earnings. 106 A study by Koeber and Wright found a similar pattern of older age/greater income loss. Their research involving 2,424 displaced workers revealed that for males over fifty, average weekly earnings declined by $98, from $743 (past job) to $644 (current job); for females over fifty, average weekly earnings declined by $44, from $419 (past job) to $375 (current job). 107 In addition to income losses related to job displacement, the thirty-year pattern of falling real per-hour and weekly wages (adjusted for inflation) for average workers further reinforces the downward mobility drift experienced by many workers. As noted earlier, average real hourly wages fell from $17.13 per hour in 1973 to $16.11 per hour in 2005 (in 2005 dollars). As real hourly wages declined, so did average weekly real wages, which fell from $685.20 in 1973 to $644.40 in 2005. Assuming workers were employed fifty-two weeks in each of the two baseline years, this means workers’ real incomes, apart from any income losses associated with job displacement, declined by $2,121, dropping from $35,630 in 1973 to $33,509 in 2005. 108 Down by Age: Lost Living Standards The extent of recent downward intergenerational mobility is difficult to determine, in part because of definitional issues concerning the meanings of the terms class, generations, and downward mobility. Despite these issues, recent income-based research findings, as well as studies of occupational trends, indicate that young workers today are finding it difficult to match the living standards achieved by older workers in the previous generation. Two intergenerational income studies from the late 1990s produced similar findings: young U.S. adult workers in the 1990s earned substantially lower real incomes (on average) than those of comparable young workers in the recent past. 109 More recent intergenerational income studies have reported similar results. 110 A more complex 2007 intergenerational study compared the income, educational, and occupational levels achieved by over 4,700 fathers in 1979 with the levels of these three resources achieved by their adult sons (2,554) and daughters (2,212) in 2004. Among other results, this study found that compared to similar studies in the 1960s and 1970s, there was substantially more downward mobility among young adults in the mid- 2000s. 111 These findings, as well as those from income studies, are reinforced
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