How the Upper-Middle Class Was Made

I don’t think I’ve ever been so depressed as I was when reading the latest study that supposedly proves, once again, why populists are so, so wrong.

It was a study put out by the American Enterprise Institute showing that while the middle class has been shrinking since the 1970s, the overwhelming movement is out of it toward the upper-middle class.

David French summed up the key finding in the study, which measured inflation-adjusted household income numbers:

In 1979, 10.4 percent of families were upper middle class, with incomes from 500 percent to under 1,500 percent of the poverty line. By 2024, the percentage had almost tripled, to 31.1 percent, and the percentage of the rich (incomes of 1,500 percent of the poverty line and higher) went from a microscopic 0.3 percent to 3.7 percent, a more than tenfold increase.

We’re the richest we’ve ever been. We enjoy a standard of living and technological baubles undreamed of even 50 years ago. In one sense, an op-ed by Jason Riley promoting the study was written almost as a caricature of conservative polemic: Nobody has a right to complain because there’s nobody who isn’t living the best possible life right now, except through their own most grievous faults. Yet complaints are a “constant refrain from doom-and-gloom populists on the left and right.”

With this study, David French sought to finally reconcile the picture the stats paint with the broadly reported dissatisfaction of Americans with the economy. He ended up on the visibility of social classes and distinctions -- the premium Disney tickets, expensive travel sports, the endless configurations of airline tickets that effectively remind us that the top 10 percent of earners have nearly half the spending power in the economy. Many of us are exposed to reminders that we’re not getting the best of what’s on offer. On his Capital Record podcast, David Bahnsen got somewhat closer to the mark by highlighting the truly deleterious effect of housing inflation on the morale of those who do work hard and play by the rules.

Yet man is more than a worker or a consumer. Households are made up of family members. What are the trends behind that AEI study? Conservatives should be able to elaborate on them.

One small but real factor is that we have traded some economic security for dynamism. In 1980s America, a solid chunk of the private economy still offered one‑company careers where you could spend 20 years climbing a single ladder; since then, those “career jobs” for older men have eroded while job‑to‑job churn has risen by about 50 percent, with the share of workers jumping directly from one employer to another in a year rising from roughly 6 percent of the labor force in the late 1970s to nearly 9 percent by the late 1990s. The old bargain of stability and steady, in‑house raises has been replaced with a faster but more stressful game in which ordinary workers are pushed to keep hopping jobs just to chase the wage growth that used to come from loyalty and long service. And there is another stressor in this arrangement: Because health insurance is tied to employment, there is an understandable anxiety about changing jobs or starting new ventures when one has vulnerable dependents. Medical bills are the largest driver of bankruptcy in America.

But the overwhelming contributor to the growing upper-middle class is not higher productivity, yielding higher wages. It’s not some secret American know-how. And it isn’t something that we can repeat or project into the future forever. It’s more hours worked, and at a higher wage. And almost all of that is down to women who entered the workforce and are achieving higher status within it.

In the late 1970s, many women worked, but they were more likely to work part-time or seasonally. The story since then is one of sharply higher female participation in the labor force, along with more hours and huge gains in relative pay and professional status. Women working full-time earned 62.3 percent of men’s earnings in 1979. By 2021, they earned 82–83 percent. Real median annual wages for women aged 25–59 rose by about 49 percent between 1981 and 2015, from roughly $22,700 to $33,800 in 2015 dollars, with especially large gains at the top of the distribution.

The rise in women’s wages partially disguises a stagnation among men. Male participation rates in the labor force have declined, driving their share of household income production down, even as those who stayed in the workforce saw stagnant or modest growth in their wages.

While men still dominate the very highest-earning positions in the economy, women, on average, are starting to surpass men in educational and professional status, earning more degrees and becoming more likely to enter professions such as law or medicine.

At the level of the upper-middle class, what we are seeing sociologically is assortative mating, if you can get it. High-earning women expect to marry men who earn as much as or more than themselves. These are the people who form the “double income, no kids” ranks of young professionals and then drive the social norms among the new upper-middle class. These tendencies are also a first-order driver of household inequality.

However, women are so outpacing men now in educational attainment that they are settling for marriages across class or for single life. We’re seeing more households where women are lawyers and men are contractors. Or where women despair of finding a suitable partner at all.

This exists alongside an economy in which women face a huge earnings penalty for interrupting their careers to focus for a few years on their infant and toddler children.

Riley writes that “populist rhetoric is designed to appeal to emotion, not reason.” But what’s actually at work is that conservatives are unable to deafen themselves to family dynamics and gender roles. Looked at from a progressive perspective, women are achieving more equality with men in the workplace, or even surpassing them. But the fact that women still strongly prefer men to earn at least as much as or more than them in marriage suggests that equality isn’t what they are chasing.

What most people feel is that men are worth less to their households and women are more burdened in them. Men aren’t primarily relieved by the earnings of their partners. Women prefer a higher-earning spouse, and so the pressure men feel to earn more is increased even as their relative contribution falls and their overall status has weakened. It’s not enough to keep up with the Joneses; one must keep ahead of his spouse or his date.

The number of personal hours spent in leisure at home or maintaining the home has dramatically gone down as well, as women take on full-time work. This is where the story connects to immigration. It is precisely this growing upper-middle class that fights tenaciously for mass immigration, because it allows them to more easily afford the landscaping, the meals out, the housecleaning, and the babysitting that this dual-professional life requires. The standard of living that the upper-middle class harvests from our economy is partially subsidized by an immigrant class willing to live at a lower standard of living and with less legal protection.

Further, conservatives should not be blind to the social unsustainability of this lifestyle. In 1979, America was already below the replacement rate for native fertility. Now, it is at all-time lows. The compounding effect over generations is to shrink the number of kith and kin we have -- the number of people who share our burdens, share resources in common, and help us raise our families without requiring wages. Our households are stuffed more than ever with cheap and not-so-cheap consumer goods. But we’ve lost many non-consumer goods in the chase.

French asks, “How could it possibly be rational to feel such prolonged pessimism in the face of such extraordinary economic growth?” The Wall Street Journal answers that it’s simply irrational. Other conservative moralists say it’s just envy, or displaced anger at ourselves for making bad choices.

If man were built for the market, this social transformation would be great. We’ve minimized non-market relations and expanded the zone of commerce deeper into our lives. But no, the market is supposed to serve man. This is a one-time, major social shift that is nearing its terminus. We give more of our lives to the market and get more of the stuff that we say doesn’t really matter in the end. We’re growing the economy -- at the cost of dad losing his feeling of contribution, at the cost of mom burning out, at the cost of many opting out of parenthood entirely.