Greenstone tells The Daily Ticker that after studying the data more carefully he found "that a lot of men are no longer in the workforce or are working part time."
"If you put them back in, the earnings of the guy in the middle have declined 20% over the last four decades," he says. "As a result, the median earnings of men are back to the levels that prevailed in the 1960s."
In the latest jobs report released Friday, the average hourly earnings for men and women rose a penny to $23.58 an hour. That caps a 1.6% gain over the past 12 months, which is not enough to keep up with 2% inflation as measured by the Consumer Price Index.
Related: Job Growth Brightens but "Dark Clouds in This Picture"
Greenstone says the increase of women in the workplace has offset some of the impact of the rising number of men who've left the workforce.
"There's been a remarkable increase in [women's] earnings, education and a series of other great indicators," says Greenstone. "But in the last decade we're started to see some of the same trends for women (as men); their wages have [started] to stagnate," and he notes there are still few women CEOs and members of Congress."
More evidence of the declining middle class can be found in a recent report from The National Employment Law Project. Since 2001, employment has grown 8.7 percent in lower-wage jobs and 6.6 percent in high-wage ones but they've fallen more than 7% in mid-wage jobs. The situation since the Great Recession is similar: jobs in the mid-range paying $14 to $21 accounted for 60% of jobs lost but only 22% of the job gained while lower wage jobs paying a median wage ranging from $7.70 to $13.83 represented 58% of all new jobs.
Greenstone says the key to reviving the middle class is education. Up until 30 years ago, he says each successive generation got more education than the previous one. With that no longer the case, high school and college graduation rates, especially among men, have stagnated, Greenstone says.
Related: A College Degree Doesn't Guarantee a Good Job: Gary Shilling
"The data are incredibly clear," says Greenstone. "An investment in college has an enormous payoff, much higher than you can get in the stock market in bonds, and from buying a home."
Despite the decline in middle class wages and jobs, Greenstone, a former chief economist for President Obama's Council of Economic Advisers, says the labor market today is much healthier than it was four years ago.
"In the October 2008 jobs report the economy lost 500,000. This month we gained about 170,000 and there were positive revisions for the previous two months. The future looks much brighter today than it did 4 years ago," says Greenstone.
More from The Daily Ticker
New Jersey Beach Communities Crushed, but Officials Vow to Recover
Obama and Romney Agree on Small Business...and They're Both Wrong
Job Growth Brightens But "There Are a Few Dark Clouds in This Picture"
Check Out Yahoo! Finance's Breakout
Top 3 Ways to Ruin Your Financial Life: Ben Stein
Retail Sales, Rising Confidence Bode Well for Holiday Shopping Season
Icahn's Move Into Netflix Fuels Buyout Speculation