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SD middle class vanishing

Middle-wage jobs in San Diego depart, and wages drop, more rapidly than in state or nation.

"The rich get richer, the poor get poorer (or stay relatively the same), and the middle is disappearing," is how economist Kelly Cunningham of the National University System Institute for Policy Research synthesizes his new study of the San Diego occupational landscape. Looking at data from the 2007-2011 period, the number of high-wage jobs requiring specific training and skills, actually increased during the period, greatly because of technology gains. Middle-income jobs declined, as did total their total compensation; low-wage jobs also shrank while wages were about flat.

Middle-wage job and income losses were deeper in San Diego than in California and the nation. Between 2007 and 2011, middle-wage occupations in San Diego dropped by 15.2%, versus 13.2% in California and 8.3% in the nation. Inflation-adjusted middle-wage earnings dropped 16.8% in San Diego, 12.3% in California and 7.7% in the nation. The conclusion is clear: the middle class is disappearing more rapidly in San Diego County than elsewhere.

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"The rich get richer, the poor get poorer (or stay relatively the same), and the middle is disappearing," is how economist Kelly Cunningham of the National University System Institute for Policy Research synthesizes his new study of the San Diego occupational landscape. Looking at data from the 2007-2011 period, the number of high-wage jobs requiring specific training and skills, actually increased during the period, greatly because of technology gains. Middle-income jobs declined, as did total their total compensation; low-wage jobs also shrank while wages were about flat.

Middle-wage job and income losses were deeper in San Diego than in California and the nation. Between 2007 and 2011, middle-wage occupations in San Diego dropped by 15.2%, versus 13.2% in California and 8.3% in the nation. Inflation-adjusted middle-wage earnings dropped 16.8% in San Diego, 12.3% in California and 7.7% in the nation. The conclusion is clear: the middle class is disappearing more rapidly in San Diego County than elsewhere.

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Comments
60

Don, can you provide the annual incomes that define low, middle, & high income levels and the percentage of jobs in each category?

Dec. 12, 2012

Dennis: I will try to get those two things late Thursday. Best, Don Bauder

Dec. 12, 2012

Don, give them 2 me too please.

Dec. 13, 2012

Homony: See response to Dennis below. Best, Don Bauder

Dec. 13, 2012

Dennis: See response below. Best, Don Bauder

Dec. 13, 2012

What about the occupations that are dying, or leaving?

Dec. 13, 2012

Homony: One of the biggest factors destroying the middle class has been corporations sending jobs overseas, accelerating in the 1980s. I doubt that death of companies has had as much of an effect on wages as the fleeing of jobs overseas. Best, Don Bauder

Dec. 13, 2012

Don, can you provide the annual incomes that define low, middle, & high income levels and the percentage of jobs in each category?

The MEDIAN income in CA today is $29K in cash salary. I would put middle class at $25K- $75K, UPPER middle class @ $76K-$250K, and well off at $250K and above. Not for a FAMILY but for a single wage earner.

Dec. 13, 2012

I would put wealthy at any amount over $250K in cash salary in a single year. Just my 2 cents.

Dec. 13, 2012

SP: I will check Cunningham. Best, Don Bauder

Dec. 13, 2012

RESPONSE TO DENNIS: The average San Diego wage in 2011 was $50,350. Cunningham defined high wage as 25% above that, and low wage 25% below. In 2011, high wage represented 25.3% of jobs, low wage 46.5%, and middle wage 28.2%. Best, Don Bauder

Dec. 13, 2012

Could we call this the "Qualcomm Effect?"

Dec. 12, 2012

Visduh: Qualcomm Effect? In some ways, I guess. Best, Don Bauder

Dec. 12, 2012

We lost NTC, a number of other local bases, and much of the defense contract work that was here in the 80's-like production of the Patriot Missiles, @ $200K per pop.......

Dec. 13, 2012

SP: Oh yes, the peace dividend of he early 1990s hurt San Diego's economy. Best, Don Bauder

Dec. 13, 2012

The number one root cause of this is the fact that GOP already drove America off the economic cliff during the Bush administration, and there are increasing numbers of cities and states that are losing the middle class because of it.

Dec. 13, 2012

Anon: Yes, American corporations, by shipping jobs overseas to low- and slave-wage nations, destroyed their own markets -- the middle class. Most executives will never figure this out. Best, Don Bauder

Dec. 13, 2012

The number one root cause of this is the fact that GOP already drove America off the economic cliff during the Bush administration, and there are increasing numbers of cities and states that are losing the middle class because of it.

No, the root cause is destruction of our manufacturing base, which has been going on since the mid 70's and really picked up steam in the 80's and is now off the charts. Both parties caused it.

Dec. 13, 2012

SP: One of the causes is that we went from a producing nation to a money-shuffling nation. Over several decades, manufacturing went from more than 20% of the economy to less than 10%, while financial went from 10% to more than 20%. We're now a financial engineering economy. Best, Don Bauder

Dec. 13, 2012

SurfPuppy619, you appear to have forgotten that we achieved one of the strongest economies in history during the Clinton administration, then Bush drove us over the cliff due to his failure to learn the fundamentals of economics while he was in college.

Another fact that far too many failed to learn in Econ 1 is that capitalism is the absolute best way to create wealth for the entire nation, but capitalists are human and too many try to maximize their greed regardless of destructive consequences to capitalism itself.

Don was absolutely correct to focus on "American corporations, by shipping jobs overseas to low- and slave-wage nations, destroyed their own markets -- the middle class."

Dec. 13, 2012

Surf Puppy 619, you appear to have forgotten that we achieved one of the strongest economies in history during the Clinton administration, then Bush drove us over the cliff due to his failure to learn the fundamentals of economics while he was in college.

Clinton's economy, while good, was no match for the economies of the 50's, 60's and early 70's. Take out the internet tech bubble and it was average.

Dec. 13, 2012

SP: On the other hand, the 1950s economy was a rebound from the Depression and World War II days. There was a huge springback of long-depressed demand. A baby boom began shortly after World War II that helped propel the economy for many decades. Now baby boomers are beginning to retire, and the effect will be the reverse. Best, Don Bauder

Dec. 14, 2012

Thanks again for the clarifications and perspectives Don and SP.

It looks like you really should have been a headline writer SP:)

Dec. 14, 2012

Anon: As I understand it, SurfPuppy is a lawyer. By and large, lawyers get paid by the word. Verbosity is a virtue in the legal profession. So lawyers would be the worst headline writers. Best, Don Bauder

Dec. 14, 2012

You are 100% correct, but you left out we were doing 89% of the worlds manufacturing because we were the ONLY industrialized nation left with working factories.

Dec. 14, 2012

SP: Germany and Japan did a tremendous job rebuilding their manufacturing capacities after World War II. They were building structures that were up to date for the times. That may be one reason that those two countries passed the United States in many areas of manufacturing. Nothing is more pathetic than going through American cities with vacant, out-of-date buildings, really not suited for current kinds of manufacturing. Best, Don Bauder

Dec. 14, 2012

Germany and Japan did a tremendous job rebuilding their manufacturing capacities after World War II.

With OUR money under the Marshall Plan. They rebounded very fast. But what Japan did to our nation and numerous industries-which we allowed- is shameful. Carnegie/US Steel built this country, and the world and is exhibit #1. We owned the steel production business up until the 1970's when Japan rigged and manipulated the market, through unlawful trade, and now their steel builds the world. That is one example of thousands.

Dec. 14, 2012

SurfPup: There is no doubt that Japan practiced mercantilism more than capitalism after World War II. China today is practicing mercantilism. Best, Don Bauder

Dec. 15, 2012

The average San Diego wage in 2011 was $50,350. Cunningham defined high wage as 25% above that, and low wage 25% below. In 2011, high wage represented 25.3% of jobs, low wage 46.5%, and middle wage 28.2%. Best, Don Bauder

Don, I think defining high wages as anything above $62,937 might surprise quite a few folks in SD. That might define the low end but it doesn't tell us much else. A breakdown of the income levels in that upper 25% would be more revealing. It also doesn't tell us anything about those that don't derive their income from wages. I'm more inclined to go with Surf Pup's numbers on upper middle & well off.

Dec. 14, 2012

Just how is it that we continue to swallow, hook, line, and sinker, every arbitrary "figure" that every "expert" picks out of the air? I don't doubt Cunningham's good intentions, but he needs to do at least a little more work on what it means to be in a category than pick a convenient margin. As Geiger long ago pointed out (to little effect): "The more you generalize about a population, the less you know about any individual in that population."

Dec. 14, 2012

Twister: Cunningham is an excellent economist. I am sure he knows that his work generates criticism. That is part of being an economist. (It's also part of being a journalist.) Best, Don Bauder

Dec. 15, 2012

Dennis: Any economic study can be structured different ways. Cunningham could have used income rather than wages. That's true. And there could have been different guidelines for high, low, and middle. But it was a very good study. All such studies are open to second-guessing. Best, Don Bauder

Dec. 16, 2012

The average San Diego wage in 2011 was $50,350

The "average" can be skewed by high wage earners, the median single taxpayer wage/income is no where close to $50K+. I would question if it is that high even in Santa Clara County where Silicon Valley is located. The median, as most here know, is the 50% mark, half above half below.

I need to be careful how I state these statistics.

Dec. 14, 2012

We all need to be careful how we cite statistics, and which "statistics" we cite. Removal of distortion remains the great undone task of statistics as a discipline. We continue to believe that, through statistics, we will erase the lie from anecdote. We're not there yet. Will we ever be? What's so bad about anecdote?

Hint: The preponderance of the evidence may be a superior way to examine phenomena. "Beyond a reasonable doubt" ranks 'way up there in the top ranks of absurdities. Arrogance. Indifference. We know that this arrogance has left a trail of ruin behind. We also know that a preponderance is not good enough to kill the party found "guilty" thereby.

Dec. 14, 2012

Twister: Removal of distortion is not only the great undone task of statistics. It is the great undone task of every discipline I can think of. Best, Don Bauder

Dec. 15, 2012

SP: Per capita income in San Diego is about $31,000. There is a figure for median household income, a bit below $64,000. If you divide that by 2.79 persons per household, that would get you around $23,000. Best, Don Bauder

Dec. 14, 2012

Thanks don, the family income gets tossed around like it is single earner income a lot..............the way you cite these statistics can be confusing, and knowing which one to cite fir accuracy is sometimes hard (average/mean vs median)....

Dec. 14, 2012

SurfPup: Just remember, I don't know that any economist would bless my dividing median household income by 2.79 persons per household. Best, Don Bauder

Dec. 15, 2012

Don, Was not referring to you specifically when I posted, but all of us.

Dec. 15, 2012

SP: It makes no difference to whom you were referring. We bat ideas around on this blog. Best, Don Bauder

Dec. 16, 2012

Not only have industries been lost to "outsourcing," the exceptionally high-level skills that were associated with them (e.g. machinists), at least in sufficient numbers to re-start re-industrialization, are lost forever because those with the skills have retired or died. It took a long time to build such high skill levels and the culture surrounding them which handed down those skills to a younger generation.

If I recall correctly, this decline began in the Reagan administration (I seem to remember Ronny talking up the idea that we were moving into an "information" economy and did not need those skills and industries). We shifted from being "can-doers" to gamblers and servants, and that trend continues.

I would like to put what little money I have left on the continued disintegration of this economy, because as I have repeatedly said here (honk, honk!), the concentration of power and wealth in the hands of the few has had, and continues to have, the effect of killing the Golden Goose, the consumer. If this is true, the Fiscal Cliff coming in January will seem like a rather small curb rather than the abyss into which the US (and thus the world) economy will collapse.

We had better get used to living well within our increasingly meager means, because we continue to ignore the fact that the baseline for "normal" is continually reset to the top of the previous bubble. We are in a delusional dream-world, and we had better wake up and smell the toasted barley (if we're in the upper-middle class) while the rich sniff their real coffee. First, there will be the hyper-inflation to suck up the last of our savings, followed by a deep cratering into epidemic and pandemic poverty from which we will require generations to get back to anything resembling a life at a subsistence level, much less one of reasonable comfort (still far below the binge-spending one we persist in having).

Dec. 14, 2012

Twister: You have indeed made the point many times, and it is a valid point. Concentration of wealth in the hands of a few is one of our biggest problems. It is one of the factors killing the middle class, and thus harming consumption, which is 71% of the economy. Federal Reserve policy exacerbates the maldistribution of wealth and income. As the Fed keeps interest rates low, the value of stocks and bonds rises. The upper 10% to 20% has a very high percentage of this financial asset wealth. On the other end, the low interest rates hurt the lower income persons, who tend to keep money in savings accounts. Best, Don Bauder

Dec. 14, 2012

If one followed, for example, "pure" Islam, one could charge no interest at all. One would not borrow outside of one's group, however. But that would be just fine with me--were the system not so contaminated that the social mores that impose an obligation to eventually reciprocate (loan to the young, they take care of you when you're too old or sick to work--that's the "interest" on the debt) not so screwed up by "western values."

Dec. 15, 2012

Twister: The bible's book of Leviticus gives clear approval to slavery. It is cited, seemingly favorably, in other parts of the bible. But we don't permit it, and neither do other industrial nations. Best, Don Bauder

Dec. 15, 2012

I misspoke. Here is the corrected copy:

If one followed, for example, "pure" Islam, one could charge no interest at all. One would not borrow outside of one's group, however. But that would be just fine with me--were the system not so contaminated that the social mores that impose an obligation to eventually reciprocate (loan to the young, they take care of you when you're too old or sick to work--that's the "interest" on the debt) not so screwed up by "western values" that the ancient "pay it forward" principle survives only in the bits and shards of past social (cooperative) mores ridiculed into insignificance by the segment of this rotten culture in which doing TO others is the central value and doing FOR each other is considered quaint. I have discussed this principle in terms of real grownups and spoiled brats in my recent piece on this website. http://www.sandiegoreader.com/weblogs/earth-fire-and-water/2012/dec/14 /valid-tears/ Note: Those who wish to read this piece may have to cut-and-paste this URL to reach the piece directly. Apparently the Reader's machinery will not permit links to specific articles--at least not in the catacombs wherein the blogs of the masses lie incognito.

Dec. 15, 2012

Twister: This suggests that the Federal Reserve, which is charging banks 0% to 0.25% for money are practicing almost pure Islam. Best, Don Bauder

Dec. 15, 2012

I may have been responsible for the faulty link, not the Reader. I hope this works . . .

Dec. 15, 2012

Paul Jacobs salary is upwards of $30 million per year. Is his salary included in the calculation of the average salary? Brandes earns $120 million per year. Is his compensation included in the average? If you subtract the outliers like Jacobs and Brandes from the calculations, I suspect the average salary is considerably below $40,000 per year, probably in the range of between $30,000 to $35,000 per year. A few heavy hitters like Jacobs and Brandes could add $15,000 or more to the average.

Dec. 15, 2012

They ARE included in the mean/average, which is why you are correct in that they are outliers, that is why the median, the 50% mark, half above- half below, is a better measure, then you could use standard deviations to cancel out the outliers.

Dec. 15, 2012

SurfPup: It is true that the median is considered better than the average in many calculations. Best, Don Bauder

Dec. 16, 2012

Burwell: This spring, Forbes listed Paul Jacobs's total earnings at $36.33 million, of which $28.93 million represented stock gains. Other listed his total earnings last year at $21.7 million. Either way, he is doing well for a guy of only 50 years old. I have heard that Brandes pulls $120 million a year out of Brandes Investment Partners, but have no way of knowing if that is true. If it is, it is disgraceful, because the money manager's performance has been dismal. Money under management has plunged from above $100 billion to $29.6 billion. It's true that if you take the outliers out, averages drop. That's why the median is used so often. Best, Don Bauder

Dec. 16, 2012

When dealing with statistics one has to watch out for outliers and outright liars.

Dec. 15, 2012

!Ay, seguro que si!

Dec. 16, 2012

Burwell: So true. Best, Don Bauder

Dec. 16, 2012

When dealing with statistics one has to watch out for outliers and outright liars.

:)

Dec. 16, 2012

SP: Burwell may make Bartlett's with that perspicacious observation. Best, Don Bauder

Dec. 17, 2012

Yeah, that is pretty funny, but let me observe that "outliers" is where the action is. Visualize that curve oscillating back and forth as it moves forward. Every genius was and is an outlier. Some are more glib than others and some have better publicists.

Dec. 17, 2012

Twister: Yours is a discerning observation, too. I agree that geniuses are outliers, although I have no personal knowledge of that, 'cause I ain't no genius. It's true that glibness, luck and PR often make the outlier into a super-outlier. I have spent many years involved in opera. It always interests me how some singers rise to stardom and riches, and others who seem to be just as good don't make it to the top. Best, Don Bauder

Dec. 18, 2012

Waal, Don, methinks the laddie doth protest too much. But that's as it should be. Richard Feynman seems to be an example of a true genius who didn't need no publicity agent. "You are what your publicity says you are" is the old cynical saw about show biz. Some have so much talent that they can't avoid "making it to the top;" others kiss enough ass or screw their way to the top, and others care only about getting better and better. Those are maintained by those like you who spread the word about your discoveries. Hint!

But think of those outliers who have been, figuratively and literally (or should I say "virtually?") burned at the stake for their heresy. Then there are those who are crucified, stoned because of jealousy or envy on the part of those who hold the high ground, as in academia, for example. Then there is pure pig-headedness (my apologies to real pigs) . . . and the list goes on.

The lesson of all of this is that it's all about THE WORK, the art, NOT about the ego.

I await your list of the unknown greats . . .

Dec. 22, 2012

I would like to add some sauce to this statistical soup, our planet has reached a point where it is now running a resource deficit. In other words, humans are destroying rather than sustaining planetary resources at a rate never before seen in human history.

Gentlemen we are doomed.

Dec. 26, 2012

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