Good Old Days are Gone for the American Middle Class

There seemed to be nothing in the way of Jimmy Richer`s life when he worked at Nortel Networks making 94,000 dollars a year after graduating from university. When he was laid off in March 2000 because of the company`s economic woes, he was confident that he would soon get another job. Six months later, however, he was still looking for a job. He had to lower his expectations about a new job and recently found work at a cable company earning half the money he made at Nortel Networks.

“I no longer associate having a job with achieving my dream. The workplace is there just for work,” said Mr. Richer.

Craig Hayer(43), who once worked as a consultant for a telecommunications company, was one of a typical member of the middle class who enjoyed the economic boom of the 1990s. He once made 150,000 dollars annually and bought a luxurious house in suburban Washington. But failing to be employed again after he was laid off in July 2001, he suffered from depression. Mr. Hayer, who now barely makes a living working as a freelancer, said that his living standard plummeted to a pre-1990 level.

The middle class in the U.S. is on the decline. The Wall Street Journal reported Thursday that the living standard of the middle class these days is far below 1990`s levels. They are now experiencing downward mobility in socio-economic terms. This is largely due to the deteriorating job market, despite the recent economic recovery. The Washington think tank EPI (Economic Research Institute) said that payrolls have been decreasing for as many as 20 months in a row even though the recession is officially over. This is the first time that has occurred since World War II. Some analysis indicates that the current situation is more serious than in 1992 when payrolls decreased for 16 months in a row. More than 2.7 million people are unemployed since the recession began in March of 2000.

A remarkable phenomenon during this recession is a lower quality of life among the white-collar middle class who enjoyed high income in the late 1990s. Many of them lost their jobs in the early 2000. But they cannot expect to work at a good company as they did before the recession due to an insecure job market.

The Wall Street Journal reported that many high-wage earners in the technology and telecommunication sectors have lost their jobs. These people are forced to lower their expectations on annual salary and many of them might not be able to enjoy the wages and status they once possessed, forecast the paper.

Jung-Ahn Kim credo@donga.com