Georgia’s middle class shrinks even as household income plummets, Pew reports

By David Pendered

A report released today by Pew Charitable Trust shows that Georgia’s middle-class has shrunk since 2000 – even as the benchmark, which is median household income, plummeted by 18 percent during the period.

Here are the numbers:

Shrinking Middle Class

Georgia’s middle class has shrunk even as the benchmark, median household income, has plummeted. Credit: pewtrusts.org

Share of middle-class households:

  • 2013 – 44.2 percent
  • 2000 – 49 percent

Median income:

  • 2013 – $47,829
  • 2000 – $58,473 (inflation adjusted)

Share of household spending at least 30 percent of income on housing:

  • 2013 – 34 percent
  • 2000 – 27 percent

The analysis produced by Pew’s Stateline shows the middle class shrank in all 50 states. The median household income declined during the period in most states.

Pew’s report speaks to a growing discussion over job growth and wages.

Jim Clifton, CEO/chairman of Gallup, and Daniel Quinn Mills, a professor of business administration at Harvard University, spurred some lively debate with their recent observations on unemployment.

In a piece titled, “The Big Lie: 5.6 Percent Unemployment,” Clifton wrote:

  • “There’s no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.”

Clifton offered several examples to support his premise, include this:

  • “Say you’re an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 – maybe someone pays you to mow their lawn – you’re not officially counted as unemployed in the much-reported 5.6 percent.”

Clifton backed off his contention a week later, telling CNBC that he feared he may “suddenly disappear, I need to make it home tonight,” if he contested the accuracy of unemployment rates reported by the federal government.

In an op-ed published in The Wall Street Journal, Mills contests the government’s practice of adjusting employment figures based on seasonal conditions. That may have made sense when adopted 70 years, when:

  • “Construction shut down in winter and automobile manufacturing closed in January.” … Today’s economy is a service economy, with far less weather-related employment variation.”

Mills began his piece with this statement:

  • “The U.S. economy lost more than 2.7 million jobs between the middle of December and the middle of January, but the big news from the January jobs report was that the economy added 275,000 jobs during the same period. Why the discrepancy? The Bureau of Labor Statistics touts “seasonally-adjusted” figures….”

Former WSJ economics reporter Ben Casselman led the charge against Mills’ opinion. Casselman left the newspaper in 2014 to become chief economics writer at ESPN’s FiveThirtyEight. Casselman wrote:

  • “It is, without exaggeration, one of the dumbest things I’ve ever read. … This is so wrong that it’s hard to know where to begin. … Mills, whose Harvard website says he is “an expert on the differences between Asian and Western leadership styles,” also appears to misunderstand how the government’s adjustment formula works….”

Pew’s analysis is based on data collected in the Census Bureau’s American Community Survey and the University of Minnesota’s IPUM project, with the acronym standing for Integrated Public Use Microdata Series.

Stateline defines middle as earning from 67 percent to 200 percent of median income. Median is the point at which half the incomes are higher, and half the incomes are lower.

The federal standard for housing affordability is 30 percent of household income.

 

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

1 reply

Leave a Reply

Want to join the discussion?
Feel free to contribute!

What are your thoughts?

This site uses Akismet to reduce spam. Learn how your comment data is processed.