The “Attack” Of The Middle Class

In November I asked a simple question:

Would you be more or less likely to look for a new job if your current job no longer offered vacations and holidays?

I got a couple of answers and they confirmed the very obvious:  We would be more likely to look for a new job and certainly not LESS likely.

More recently I made an observation concerning teacher salaries:

…to receive the bonuses and raises, teachers must sign away some job security provisions outlined in their union contract. About 20 percent of the teachers eligible for the raises this year and 30 percent of those eligible for bonuses turned them down rather than give up those protections.

Teachers in Washington DC valued the clause in their contract that prevents them from being fired MORE than they valued $30,000 in bonus AND a $37,000 salary increase.

In both cases, the point is made, one theoretical and the other practical, that compensation comes in forms OTHER than strictly wages and salaries.  Vacation is one form of compensation.  Protection from having to actually DO your job is another.  It’s something that I’ve always suspected.  However, Dan Mitchell on his blog points out a couple of studies by CATO that demonstrates the lower earning deciles is growing more rapidly than the growth shown in the highest earning deciles:

While it is true that the cash explicitly paid to employees has become more unequal over the last generation, the…more benign explanation for the change in cash compensation over a generation is the dramatic increase in health insurance costs. …inequality in total compensation has not increased because the fixed costs of health insurance are a much larger percentage of the total compensation of lower-earnings workers. Burkhauser and Simon explore this explanation. They add the value of employer-provided health insurance as well as Medicaid and Medicare to the pre-tax, post-cash-transfer household income data and find that the bottom three income deciles actually exhibit higher growth than the top seven deciles from 1995 to 2008.

Compensation, in it’s many forms, grows more rapidly for the lower earning deciles.


Using unpublished BLS total compensation data, including employer health insurance expenditures, from 1999 to 2006, he finds that the growth in compensation by earnings decile (from the 30th to the 99th) averages 35 percent, with 41 percent growth at the 30th percentile (workers earning $10–$14 an hour) and only 35.8 percent growth at the 99th percentile (workers earning $59–$80 an hour).

We’re certainly going to h ear from Obama and the Democrats this election cycle that the Middle Class is under attack, perhaps true, but that attack takes the form of government dominated health care, not some form of class warfare engaged by the elite.  Obama is going to cast himself as the Middle Class warrior.  The media will produce study after study that shows the rich are getting richer while the poor are getting poorer.

Don’t buy it.  Do the work.  Get the data.


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