This paper presents a macrostructural perspective on changes in the middle class in the United States and on policies needed to address its stagnant economic position and declining status. Trends in the middle class since the 1970s exhibit both wage and job polarization. There has been a growth in income inequality since the 1970s, mostly due to the divergence of the top 1% or 10% from the bottom 99% or 90%. The small increases in the next 40% of incomes and stagnation in the bottom 50% have not kept pace with the growth of GDP since the late 1970s. There has also been an expansion in both high-skilled, good jobs and low-skilled, bad jobs along with a decline in semi-skilled, well-paying jobs that has shrunk the size of the middle class and degraded its economic position and status. Several explanations have been used to account for such wage and job polarization: mainstream economists have emphasized the role of technology and digitalization in producing routine-biased technological change, whereby there has been a declining demand for routine, middle-class jobs and an increasing demand for high- and low-paid non-routine jobs; social-institutional approaches—which are advocated in this paper—point to reductions in institutional bargaining power as the main reason for the decline in the economic position and status of the middle class. These divergent explanations suggest different strategies for rebuilding the middle class and the final section of the paper outlines some of the key policies needed to improve its economic position and status: enhancing social protections regardless of employment status; providing greater opportunities for skill acquisition; and promoting more collective worker institutional bargaining power.

Arne L. Kalleberg is a Kenan Distinguished Professor of Sociology at the University of North Carolina at Chapel Hill. He has published extensively on topics related to the sociology of work, organizations, occupations and industries, labor markets, and social stratification (https://arnekalleberg.web.unc.edu). He is the author of Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Employment Systems in the United States, 1970s–2000s (Russell Sage Foundation 2013) and Precarious Lives: Job Insecurity and Well-Being in Rich Democracies (Polity Press, 2018). Most recently, he is the co-author (with Kevin Hewison and Kwang-Yeong Shin) of Precarious Asia: Global Capitalism and Work in Japan, South Korea, and Indonesia (Stanford University Press, 2022). He served as the President of the American Sociological Association in 2007-8 and is currently the editor of Social Forces, an International Journal of Social Research.