Milken Institute Review 2Q10 Page 56

The Milken Institute Review

since 2000 and declining hours on the job

were symptoms of an economic system that
has loaded the dice against the middle class.
Indeed, they concluded that the historical link
between economic growth and broadly

shared income gains had been broken.

The analysis they present in support of

their contentions is based on the economic
outcomes of traditional families married

couples with children in the home. And when
we similarly restricted our analysis, we got the
same results.

It is unclear, however, what these conclu-

sions imply for the whole economy, and why

what happened to this subgroup of working
families differs from outcomes for a broader
cross-section of the labor force. The total
hours worked by married men and women
living with children during 2007 represents
only 38 percent of all work in that year. We
understand the importance of traditional

families in the context of policy discussions
about how the economy is evolving. But this
group represents a minority of the contem-
porary work force and one that is not espe-
cially vulnerable to economic disruptions
caused by economic restructuring.

Our analysis suggests somewhat different

conclusions about recent work force dynam-
ics. We found that average hours worked in-
creased modestly across virtually all age and

gender groups in 2000 to 2007. We did not
find a disproportionately large share of the
productivity contribution of workers across
the economic spectrum being diverted from
those at the lower end to those at the upper
end. We found, though, that substantial
shares of compensation gains were going to
pay for retirement and health benefit pro-
grams and that these benefits generally take
a larger share of the added compensation dol-
lar in the lower- and middle-income ranges
than in the higher ranges.

h e a lt h c a r e i n f l at i o n