How the middle class got screwed: globalization and our new Insecurity Economy

The social safety net is in tatters. No jobs are safe. Who is to blame — and what has the anxiety done to us all?

It is clear that American families have been struggling in recent decades. Less obvious are the forces that are responsible for this reversal of fortune. However, a significant body of research now points to a confluence of economic and social trends that many scholars agree have played a crucial role in the rise of financial insecurity.

Since the 1970s, work in the United States has undergone a dramatic transformation—a regression from the New Deal quest for stability and from shared prosperity to insecurity security to a state in which work is precarious. In the words of sociologist Arne L. Kalleberg, work has become more “uncertain, unpredictable, and risky from the point of view of the worker.”

One reason for the rise of precarious work is the wholesale restructuring of the American economy from one based on manufacturing to one based on services. After World War II the manufacturing sector comprised 40 percent of the labor force; by 2005, that share had fallen to only 12 percent. The service sector now makes up about 80 percent of the jobs in the United States. Durable manufacturing jobs (autoworker, machinist, chemical engineer) offering higher wages and good benefits have been replaced by service sector jobs (store clerk, cashier, home health-care aide) that pay less, offer few or no benefits, and are more insecure.

Moreover, while the manufacturing sector tends to create good jobs at every employment level, the service sector tends to create a relatively small number of high-skill, high-paying jobs (in fields like finance, consulting, and medicine) along with a large number of low-skill, low-paid jobs (in retailing, child care, and hospitality). The result is that secure, semiskilled middle-income jobs like those that once fueled the rapid expansion of the American middle class are increasingly hard to find.

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