The myth of the large upper middle class

Among the many theories exposed as fallacies by the Great Recession is the idea of the mass upper middle class. During the years of the American bubble economy, progressives and conservatives alike lauded the graduation of most citizens from the working class to a new elite that included the majority of Americans...

Elite progressives and elite conservatives share the assumption that the ideal society is one in which most Americans would be more like them, in owning educational credentials (progressives) or capital (conservatives)...

Progressives love to claim that education is the key to upward mobility. But this is based on an obvious fallacy. The "college premium" that results in higher incomes for college graduates is the result of the relative scarcity of college degrees. If everyone had a B.A., then the value of a B.A. in generating high wages would drop. We know this to be the case, because access to college has expanded more rapidly in Europe, where the gap in wages between the college-educated and the rest as a result is smaller than in the U.S.

Nor is there any basis to the claim, repeated by politicians and pundits of both parties, that most of the jobs of the future require a college education. On the eve of the Great Recession, the Bureau of Labor Statistics identified the occupations with the largest numerical growth in 2008-2018: registered nurses; home health aides; customer service representatives; combined food preparation and serving workers, including fast food; personal and home care aides; retail salespersons; office clerks, general; accountants and auditors; nursing aides, orderlies, and attendants; and post-secondary teachers. Of these careers, only two -- accountants and auditors, and post-secondary teachers -- require a bachelor’s degree rather than on-the-job training or an associate degree, and only one -- post-secondary teachers -- requires a graduate degree (a doctorate)...

Conservatives of the bubble economy era had their own mass upper-middle-class fantasy. In their version, membership in the mass upper middle class depended not upon educational credentials but upon ownership of capital invested in the stock market...

A majority of Americans may have some money invested in the stock market, usually through employer pension plans or 401Ks, but it is very little indeed. Forty-three percent of Americans have less than $10,000 in retirement savings and 36 percent contribute nothing to retirement savings at all...

Millions of Americans who by objective standards belong to the working class or lower middle class have persuaded themselves that they are part of the professional-investor elite, because they have worthless degrees from diploma mills, negligible amounts invested in stocks, and suburban trophy houses they cannot afford...

But many have profited from the peddling of the dream of the mass upper middle class. The claim that everyone should go to college served the interests of the educational-industrial complex, from K-12 to the universities, that now serves as an important constituency of the Democratic Party. (Along with Wall Street investment banks, universities provided Barack Obama with his largest campaign donations.) And the claim that everyone needs to pour money into the stock market, to be managed by banks and brokers who fleece their clients, served the interests of the financial-industrial complex that has replaced real-economy businesses as the dominant force in the Republican Party...

More at the link.