The Bigger They Are, The Harder They Fall: The Decline of the White Working Class
Demographics of Wealth, 2018 Series, Essay No. 3
Executive Summary
This essay explores the intersection of race, ethnicity and education, which we use as a proxy for class. We examine five measures of well-being between 1989 and 2016, the range spanned by the Federal Reserve’s Survey of Consumer Finances.
We document three main findings:
- Large racial and ethnic gaps in a range of measures of well-being lessened solely because of improvements for nonwhite families without college degrees.Over time, nonwhite working class families—those without a four-year college degree—became more similar to working class non-Hispanic whites in terms of family income and wealth. This also was true of the likelihood of being a homeowner, of being married or cohabiting and of reporting good or excellent health.
Conversely, families headed by someone with a four-year college degree who identified as non-Hispanic black or Hispanic of any race fell further behind similarly educated white families on all of those measures. More families are working class than college educated, so declining gaps are evident in the population as a whole.
- The white working class has declined both in size and relative well-being. Uniquely among major socioeconomic groups, the white working class decreased in absolute numbers and population share in recent decades. At the same time, the five measures of well-being we tracked all deteriorated for the white working class relative to the overall population. The shares of all income earned and wealth owned by the white working class fell even faster than their population share. (See Figure 1.)
- Neither race nor education is sufficient alone to explain the decline of the white working class. White college graduate families are doing very well, suggesting that factors related to identifying as white are not sufficient to explain the decline. Education and class also don’t provide a full explanation: Hispanic and black working class families made some progress on many measures, while the white working class regressed.
A more plausible explanation for the decline of the white working class is their diminishing set of advantages relative to nonwhite working class families in terms of high school graduation rates, access to relatively high-paying jobs, and freedom from explicit workplace discrimination.
The income and wealth bar graphs in Figure 1 have been updated for accuracy.
SOURCES: Federal Reserve’s Survey of Consumer Finances and authors’ calculations.
