Study Compiles Evidence of Squeeze on Middle Class : Economy: Most households in which both parents have jobs work harder just to keep from falling behind financially, the report says.

A large majority of two-earner families with children had to work harder simply to stay in place during the 1980s, according to a new congressional study that documents the widely felt syndrome of “middle-class squeeze.”

The study illustrates a sharp disparity between those who prospered during the 1980s and those who did not. And it is particularly striking because it looked at the incomes of families with two wage earners and children--a group many assumed had fared better during the 1980s than individuals or one-wage-earner families.

Families with incomes of more than $63,000--the wealthiest fifth of American families--saw their incomes increase by 15%, the new study shows. By contrast, families with incomes of less than $35,000--two-fifths of all two-earner families--saw their incomes stagnate and, in many cases, decline--despite longer hours worked.

Families in the middle of the income ladder were able to increase their incomes slightly during the 1980s, but only because wives greatly increased the hours they worked. Measured in terms of dollars per hour--or looked at in terms of the time left for parents to spend with their children--those families saw their standard of living fall, the study concluded.

The study, conducted by the staff of Congress’ Joint Economic Committee and based on data collected each year by the Census Bureau, analyzed data up to 1989. Because of that, the picture it provides does not take into account the impact of the current recession, which almost certainly has sharpened the trend that the study has documented.

The new study is certain to fuel an already heated debate over the economic legacy of the 1980s. Republicans have argued that the economic policies of the Ronald Reagan and Bush administrations created a decade of economic recovery in which the nation’s wealth sharply increased. But Democrats have charged that the new wealth created during the 1980s was sharply skewed, flowing mostly into the pockets of the already rich.

And with the recession focusing attention on flaws in the economy, that argument appears to be gaining ground. Pollsters have found that large numbers of Americans feel squeezed as they try to juggle the demands of children with the hours of work needed to sustain a middle-class lifestyle. Those pressures are a major factor in the increasing numbers of people who say the country is “on the wrong track,” pollsters say.

The skewed distribution of 1980s prosperity was “a set of facts that could be swept under the rug until the recession struck,” said economist Gary Burtless of Washington’s Brookings Institution, who also has studied family incomes.

But now that individuals are looking more carefully at their economic circumstances, the declining income many experienced during the 1980s “makes the pessimism of the last eight months very understandable,” Burtless said.

Previous studies already have shown that average income during the 1980s grew far more slowly than in the immediately preceding decades. For married couples, the average income growth in the 1980s was half the growth in the 1970s and one-fifth the growth during the 1950s and 1960s.

But many past studies have concentrated on the declining wages of male workers rather than the overall impact that the 1980s had on families. The new study shows the way that trends in earnings of men and women combined to boost the income of those who already were doing well while holding down the income of families who were struggling.

The shifts in income during the 1980s can be traced to two major trends, the study’s authors said.

The first major trend was the previously documented sharp decline in hourly wages for most male workers, with the biggest drops hitting already low-paid workers, primarily those without a college education.

Adjusted for inflation, wages dropped 12% for husbands in families whose income ranked in the bottom fifth and 10% for those in the second fifth. Because most of those men already were working full time all year, they had little opportunity to make up lost income by working longer.

The only male workers whose hourly income rose during the 1980s were those already in the top fifth of incomes. As a result, the gap between low-wage and high-wage workers widened substantially. In 1979, men in the lowest income group earned an hourly wage that was 31% of that earned by men in the top income group. By 1989, their hourly earnings were only 25% of those in the top group.

Wives, by contrast, generally were able to enjoy increasing hourly wages during the 1980s and, even more strikingly, they experienced large increases in the number of hours worked. The gains were greatest for women at the top of the income ladder.

And because high-paid women are more likely to be married to affluent men, the increases for upper-income men and women allowed family incomes for those at the top to rocket upward.

The hourly wages of women in the lowest income group, by contrast, dropped slightly during the 1980s. Because they increased the number of hours they worked, however, those wives were able to increase their overall earnings, although not enough to fully offset the declining earnings of their husbands.

Although two-parent families with children are no longer the overwhelming majority of American households, they remain a significant part of the population. The families covered by the new study make up 40% of the total U.S. population, roughly 100 million people. As of 1989, they were responsible for raising 73% of the nation’s children.