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St. Louis Fed Study: The Bigger They Are, The Harder They Fall: The Decline of the White Working Class


St. Louis ― A new study released by the Center for Household Financial Stability (HFS) looks at the decline of the white working class, as measured by a broad set of indicators. From 1989 to 2016, the group's population shrank, its share of U.S. income diminished, and its members' good health reports waned. The Center looked at which white working class’s identity is responsible for these findings, whether it be class, defined here by college degree status, or race? They discovered that neither race nor class alone can explain the decline.

The third and final essay in the 2018 Demographics of Wealth series, “How Education, Race and Birth Year Shape Financial Outcomes,” is based on an analysis of the Federal Reserve’s triennial Survey of Consumer Finances (SCF). The essays are based on the 2016 SCF data. The authors are William R. Emmons, St. Louis Fed assistant vice president and HFS lead economist; Ana H. Kent, HFS policy analyst and Lowell R. Ricketts, HFS lead analyst. In this essay the Center looks at how white working-class families’ shares of the U.S. population and of household income and wealth have dropped by double-digit percentage points since 1989.

The Center focused on three main findings while looking at the white working class decline in the U.S.

  • Large racial and ethnic gaps in a range of measures of well-being lessened solely because of improvements for non-white families without college degrees.

The gap is narrowing with non-white working class families, meaning those without a college degree. The authors found that they became more similar to working class non-Hispanic white working-class families in terms of family income and wealth. The same holds true of the likelihood of being a homeowner, married or cohabiting and in terms of good health.

  • The white working class has declined both in size and relative well-being.

White working class families saw deterioration in all five measures of well-being that were being tracked, 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 graduates are doing well. Black and Hispanic working class families have been making some progress in narrowing wealth and income gaps with white peers, while the white working class regressed. Some explanations may lean towards high school graduation rates, access to relatively high-paying jobs, and freedom from explicit workplace discrimination.

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.

For more information about the report and the Center for Household Financial Stability, see the Center’s website at