On a number of occasions this month we’ve drawn attention to the divergent fates of the 80% of American workers whose wages are declining and whose general outlook is concomitantly deteriorating, and the other 20%, whose pay is increasing and who generally feel good about their economic future. We also pointed out that with the correlation between wages and consumer spending now nearly perfect at 0.93, depressed wage growth may indeed drag on US economic output going forward. Given this, we weren’t surprised to learn that the biggest threat to traditional American society is in fact class (i.e. income inequality). This is vividly illustrated in a new work by Robert Putnam (of “Bowling Alone” fame). One key observation: race matters far less than it did in decades past and class matters far more.
From The Economist:
Among the educated elite the traditional family is thriving: fewer than 10% of births to female college graduates are outside marriage—a figure that is barely higher than it was in 1970. In 2007 among women with just a high-school education, by contrast, 65% of births were non-marital. Race makes a difference: only 2% of births to white college graduates are out-of-wedlock, compared with 80% among African-Americans with no more than a high-school education, but neither of these figures has changed much since the 1970s. However, the non-marital birth proportion among high-school-educated whites has quadrupled, to 50%, and the same figure for college-educated blacks has fallen by a third, to 25%. Thus the class divide is growing even as the racial gap is shrinking.
Cont...
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