Edward Luce has written a frustrating piece for the Financial Times on “the crisis of middle class America.” It has received a great deal of positive attention. Fortunately, Scott Winship has gone through the piece very carefully and thoroughly to explain exactly where it goes wrong.

Given that Luce’s piece has received so much favorable attention from left-of-center bloggers, I was surprised by the following:

And, much like the boarded-up houses that signal America’s epidemic of foreclosures, the drug dealings and shootings that were once remote from their neighbourhood are edging ever closer, a block at a time.

This is very vivid, and it is the kind of rhetoric we’ve heard in connection with how the rising tide of violence in Mexico has impacted border states. Scott explains, however, that Edward Luce’s implication that the American middle class is plagued by crime is somewhat misleading.

Well, the violent crime rate in 2008 was 19.3 per 1,000 people age 12 and up, down from 27.4 in 2000 and 45.2 in 1985.

To be sure, this level of violent crime is too high, and I tend to think we should shift resource from incarceration to policing.

But Scott’s strongest passage shreds Luce’s claims regarding the supposed “slow economic strangulation” of middle class families in the U.S. First, Luce:

The slow economic strangulation of the Freemans and millions of other middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation. Over the same period the incomes of the top 1 per cent have tripled. In 1973, chief executives were on average paid 26 times the median income. Now the multiple is above 300.
Then Scott:
Adjusting for household size and using the PCE deflator to adjust for inflation, median household income in the Current Population Survey rose from $29,800 in 1973 to $40,500 in 2008 (in 2009 dollars, again based on my compuatations). Factoring in employer and government noncash benefits would show even more impressive growth.

Luce’s claims get thinner from there, and Scott does us all a tremendous service.

Yet there is a nagging concern beneath the numbers on median household income: it is true that the median income for men between 35 and 44, what we think of as the prime earning years, has declined while total compensation has remained flat. This phenomenon can easily be traced to the deterioration of the labor market position of men without post-secondary education. That doesn’t change the fact that it is a real source of unease.

Moreover, one can argue that the relative success of women in the labor market relative to men — that is, the fact that women have seen gains in earnings while non-college-educated men have not — could reflect the fact that women, for a variety of reasons including the perceived need for work-life balance, have been more amenable to more flexible work schedules. As firms disaggregate, there is a growing need for part-time labor, seasonable labor, consultants, and other non-traditional modes of employment that facilitate the outsourcing of non-core functions. And if women are quicker to embrace this new landscape, if only out of necessity, than men, it isn’t terribly surprising that men will lose ground.