What's Wrong with the White Working Class?

When the white working class sneezes, America catches a cold. The Federal Reserve Bank of St. Louis examines what may be ailing America in an analysis of trends in the wellbeing of this largest segment of Americans. It defines the white working class as households headed by non-Hispanic Whites without a four-year college degree. The white working class accounts for the 42 percent plurality of the nation's households. Another 26 percent are headed by whites with a college degree and 32 percent are headed by Blacks, Hispanics, and other minorities.

Using data from the Survey of Consumer Finances, researchers at the Fed analyzed trends in the socioeconomic wellbeing of the white working class, comparing its experience over the past few decades to that of college educated whites and to nonwhites. Relative to the other segments, the white working class has declined...

• The share of income accruing to the white working class fell from 45 percent in 1989 to 27 percent in 2016. Meanwhile, the share of income accruing to college educated whites and to nonwhites increased. 
• The share of wealth accruing to the white working class fell from 45 percent in 1989 to 22 percent in 2016. At the same time the share of wealth accruing to college educated whites and to nonwhites increased. 
• The median household income and median net worth of white working class households has fallen relative to the national medians, and their homeownership rate, marriage rate, and self-reported health status also have deteriorated.

These declines may be "the result of circumstances unique to the white working class," say the researchers. The circumstances include: 1) rising high school graduation rates for Blacks and Hispanics, which has increased the competition with nonwhites for jobs; 2) less racial and ethnic discrimination in the labor market, which has increased the competition with nonwhites for jobs; and 3) globalization, which has reduced job opportunities.

"The long-term decline of the white working class may be due, in part, to the reduction over time of their previous advantages over nonwhite working classes," the study concludes.

Source: Federal Reserve Bank of St. Louis, The Bigger They Are, The Harder They Fall: The Decline of the White Working Class