Middle-Class Mythology and the Houdini Disappearing Act: Health Care and Jobs Joined at the Hip

Abstract

Myths have long legs. Once they become integrated into the cultural ethos they are almost impossible to dislodge. The Middle Class Myth is a case in point. Spoken of in reverential terms, the conventional wisdom holds that the U.S. economy is driven by a vast middle class, anchoring its consumer-driven system of goods and services. But contrary to frequent statements by pundits, politicians, and many economists, the middle class has actually disappeared. Another commonly held myth--that the United States has the best health care system in the world--is perpetuated by medical leaders and the mainstream media. Despite huge worker layoffs causing 50 million to be without health insurance, and millions more who are underinsured, the myth persists. A third myth, one currently in vogue among media pundits and politicians, is that health care and jobs are two separate issues and policymakers can deal with them as unrelated to each other, when in reality they are inextricably interwoven--the connective tissue of a physically and mentally robust workforce. The authors use Census Bureau after-tax income and Federal Reserve data to demonstrate that the middle class has disappeared, leaving millions of Americans with little disposable income, meager savings, and no health care safety net.