Noah Smith: The decline and fall of America's working class

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One big piece of news in the past couple of weeks has been the release of a new paper by recent economics Nobel winner Angus Deaton and his co-author Anne Case. The paper highlights a very disturbing trend -- death rates are increasing for white people in America, especially for working- class middle-aged whites. The increase looks like it has been going on since the late 1990s.

Among other American groups, such as Hispanics and blacks, mortality has fallen across all age and income groups during the past decade and a half. Death rates have also plunged in Europe and in other rich countries. Although some statisticians later found that the mortality increase was a bit less than reported in the Deaton-Case paper, even a slight increase stands in stark contrast to the decline among all other groups.

The trend is concentrated among the less educated. For college-educated whites, mortality fell, much as it did for other racial groups and other nations. For those with some college, mortality was unchanged -- a poor result, but not disastrous. But for white Americans with no college education, deaths have soared.

Something very troubling and very unique is happening to American working-class whites.

The immediate causes of the increase are not hard to identify.

Drugs and suicide are the culprits. There is an epidemic of prescription painkiller, alcohol and heroin abuse among American whites. Deaths from alcohol and drug poisoning among middle-class whites have skyrocketed. White suicide rates have also risen dramatically to more than 20 per 100,000 people in the 45-54 age cohort.

But this doesn't give us a real answer. Why are working- class whites turning to drugs and alcohol? Why are they killing themselves in record numbers? The trend started long before the 2009 recession, so that can't be the main explanation. Falling household wealth isn't the reason either, since mortality kept on increasing during the housing boom in the early 2000s. Nor is obesity the obvious cause; Case and Deaton find that obese and non-obese people report similar increases in pain and mental- health problems.

What about economic insecurity and falling wages?

Starting in about 1980, job security stagnated and wages began to fall for the less-educated. But as economist Lane Kenworthy notes, mortality continued to fall among middle-aged uneducated whites from 1979 to 1995, and only later began to rise. In addition, economic insecurity and wage stagnation have been an even bigger problem for blacks and Hispanics, and yet those groups are seeing their mortality fall.

In other words, none of the easy economic or health explanations are very persuasive. When Japan saw a huge rise in suicide in the 1990s, and South Korea in the 2000s, slowdowns in economic growth seemed like the obvious culprit. When alcoholism soared for Russian men after the collapse of the Soviet Union, the reason appeared equally clear. But none of those explanations works for working-class American whites during the past 15 years.

Economists may yet manage to tease out a reason from among the thicket of trends and variables. But this may simply be one of those times when economic theory isn't that useful. After all, there exists no good economic model of drug abuse and suicide in the first place. The roots must be somehow sociological and psychological.

In fact, the deterioration of the American white working class is evident in other areas. Divorce rates have risen dramatically for this demographic group, even as they have fallen for the more educated. In other words, family breakdown is now as severe among the white working class as it was among the black working class in the 1960s, when Daniel Patrick Moynihan wrote his famous report.

Is family breakdown the cause of alcoholism, drug abuse, and suicide?

Possibly -- after all, families are an incredibly important source of emotional support. But that merely leads us to the question of why family breakdown is occurring in the first place.

Here's a possible explanation that takes us back to economic factors. Beginning in the 1980s, the U.S. economy started trending toward greater inequality. The less-educated lost the semi-skilled jobs that they had held in previous decades. The uneducated class became a floating low-skilled labor force, which decreased the marriageability of white working-class men. That impaired family formation. A couple of decades later, the lack of family support started to take a big bite out of the emotional health of working-class whites, causing them to turn to alcohol, drugs and suicide once they reached middle age.

I don't know if this explanation is true. But if so, it means that our laissez-faire, neoliberal economic policy, combined with the pressure of competition from China and other low-wage countries, has had steeper social costs than we anticipated. Let's hope economists find out if this, or something else, is behind this worrying deterioration of the working class.

- Noah Smith is an assistant professor of finance at Stony Brook University and a freelance writer for finance and business publications.