Republicans surprised by results of the presidential election wouldn’t have been had they read an August survey by the PewResearchCenter.
It’s about demographics, perceptions and message, ladies and caballeros.
The Pew study – “The Lost Decade of the Middle Class” (released on August 22, 2012) – underscores not only the growing income gap among classes, but why that segment may be feeling increasingly removed from the wealth-generating sectors of the American economy to which Republicans are often tied.
For business interests, which tend to support and be supported by Republicans, these trends merit both watching and active engagement by Corporate America.
According to Pew, for the first time since the end of World War II, mean family incomes declined for Americans in all income tiers over the last 10 years but was most acute for the middle income tier (defined by Pew as all adults whose annual household income is two-thirds to double the national median), the only one that shrunk in size, a trend that has continued over the past four decades.
In the survey, the middle income tier included 49% of all adults, down from 53% in 2008 and 61% in 1971 (using the same income boundaries). According to Pew, this ‘hollowing’ of the middle has been accompanied by a dispersion of the population into the economic tiers both above and below. The upper-income tier rose to 20% of adults in 2011, up from 14% in 1971, while the lower-income tier rose to 29%, up from 25%.
However over the same period, only the upper-income tier increased its share of the nation’s household income pie; it now takes in 46% of all income, up from 29% four decades ago. The middle tier takes in 45%, down from 62% in 1971; the lower tier 9%, down from 10%.
In an interesting bit of data foreshadowing, 52% of middle class adults said that believed that Obama’s policies in a second term would help the middle class, compared to 42% who said likewise about Romney.
So who is the middle class? In terms of racial distinctions, 51% of whites, 48% of blacks, and 47% of Latinos/Hispanics self-identify as middle class, as do 53% of women. More members of the middle class identify with or lean toward the Democratic Party (50%) than with the Republican Party (39%), with 11% declining to take sides.
Interestingly, many of the demographic groups that fared worst during the Great Recession (roughly December 2007-June 2009) were young adults 18-24, blacks and Hispanics, who also happened to strongly support President Obama on Election Day.
The economic narrative the middle class tells about itself is consistent with the story told by government economic and demographic trend data. For the half century following World War II, American families enjoyed rising prosperity in every decade – a streak that ended in the decade from 2000 to 2010, when inflation adjusted family income fell for the middle income as well as for all other income groups. (US Census Bureau data).
Emphasizing the importance of education, adults with only a high school diploma were among the groups that lost the most economic ground over the last decade.
It’s no wonder that the narrowing middle class may also feel the American Dream slipping away and grasp at Big Government as a better answer for their families, at least until other options are on the table.
While Obama won by significant margins among young people, women, minorities (including Asians), and both the less affluent and the well-educated, Latinos are likely the most significant voter bloc to watch. They voted 2:1 for Obama and consider this: 50,000 Latinos turn 18 each month, translating to 600,000 new prospective voters every year.
A rising income gap that is squeezing the middle class, voter groups growing in population that are voting heavily Democratic, and a GOP without significant diversity and perceived by some as the party of the wealthy does not bode well for future Republican success, a trend that played out nationally on November 6 but that is also quite likely to manifest at other levels of elective office in the future.
There is evidence that Corporate America has recognized the economic significance of promoting education at all levels to produce a skilled U.S. workforce (more on that later).
For candidates who want to stimulate economic growth, a message centered on education and workforce skills training as the gateway to the American Dream may be just the ticket to bridge the middle.