If you did not get your multi-million-dollar bonus last year, few people will shed a tear for you. But spare a thought for people in the middle of your organisation. Many of them are highly vulnerable to risk with little prospect of reward.

In the last generation, wealth has stagnated for workers in the middle of the economy even as those at the top have, famously, become even richer and, an unsung achievement, many poor workers have increased their wealth share. Stagnating wages are the main cause; in the US, for example, the middle quintile is barely better off than it was 15 years ago. Though property values have increased, this asset is hard to access for ordinary income; to gain traction as consumers, mid-level families in the US and Britain have piled up debts, while middle-class Europeans have not done much better.

For this slice of society, stagnation has become intertwined with insecurity. Work has taken on a new character in recent decades for people in the middle; its risks are especially evident among those whose fortunes are tied to the “new economy” – cutting-edge, global businesses such as financial services, media and high-tech. They account for no more than 20 per cent of US and 15 per cent of British employment but in them, modern capitalism has concentrated its energies and defined its ideals.

The new economy has reformulated workers’ experience of time. Long service and accumulated experience do not earn the rewards that more traditional companies once provided. Instead, cutting-edge businesses want young employees who can work long hours; the “youth premium” works against older employees with multiple responsibilities. Dynamic companies have also shortened the time-frame of work itself; jobs are defined as short-lived projects rather than permanent functions. In media, mid-level employees can expect increasingly to work on six or even three-month contracts, if there are contracts at all. Throughout the “new economy”, companies are rapidly changing business focus and identity in response to shifting global market conditions.

Meanwhile, time has been transformed throughout the economy as the security net of benefits has torn. Thirty years ago, industrial labourers were menaced when plants went bust; today uncertain pensions and healthcare have become middle-class problems. The risks of space have compounded those of time. A generation ago the work exported to low-wage countries were routine, manual jobs; today, computer programming and architectural engineering can be profitably exported to India, China and Brazil.

Instability can be an opportunity – if you have real wealth to invest, or are young and unattached, or an immigrant exploring cracks in the labour force. If you are dutiful but not brilliant at work, if you have children and a mortgage, if you are worried about old-age hardship, then instability does not equal opportunity.

How did the middle slice of workers wind up in this fraught position? After the breakdown of the Bretton Woods agreements in the early 1970s, a sea of capital flooded the world and it was “impatient capital”, in the words of Bennett Harrison, the economist, capital looking for short-term returns on share prices rather than longer-term dividends on profits. To benefit, companies had to change themselves by innovating in their products or in the way they organised themselves, in order to “send a signal” to their markets. Performing for these markets has increased the centralisation of power. To turn a business around quickly, the command centre must be able to act decisively without bureaucratic muffling. Modern technologies have helped companies strip out their middle layers of bureaucracy, and so shorten the chain of command.

Though not a dominant employer, the dynamic motor of the new economy controls smaller, local businesses, down to goods in the corner store. More important, the short-term, lean, high-tech company has become the sex symbol of the business world. Mid-level, middle-aged, stable workers detract from the allure: they appear in managerial manuals devoted to the new economy as “ingrown bureaucrats” who are “resistant to change”. A company can sex itself up practically by replacing mid-level bureaucracy with technology, by exporting technical work to low-wage countries, or simply by enforcing a work ethos in which all employees are treated as young, unencumbered and driven.

For the last 10 years, my research team has been studying how people in the middle cope with these pressures. As befits adults, people with paunches are ambivalent. On one hand, they believe in the new work ethos: business should be dynamic and lean; in publicly-traded companies, mid-level employees recognise the shareholder pressures on their bosses. On the other hand, they see their own income stagnation as unfair. If the company does not value their commitment, why should they feel loyalty to it?

Many discussions of “work-life balance” focus on the lengthening time employees now spend on the job; in Britain, the European champion, working and commuting is edging up to 11 hours daily. The people we interviewed have found various effective ways to deal with these family-time deficits; they encounter more trouble managing the unreliability of work as a source of family support. That both men and women worry about failing their families was a key finding – this spectre once haunted manual labourers but has now migrated to the middle-class. Manual labourers had strong unions to turn to; white-collar unions are weak or non-existent in the new economy.

People in the middle, both young and old, grasp at the idea that “skills” will somehow defend them against the risks of the modern workplace. Yet, young people know that the education system turns out many more qualified graduates than there are jobs. And middle-aged people grasp at the idea of retraining themselves even though they know employers are likely to prefer freshly-trained workers at home or workers pre-trained abroad. Nothing was more grinding, to me, than listening to people my age talk of “re-inventing” themselves to be more competitive, mouthing clichés they barely believed.

The struggling middle class has become a favourite theme of western politicians. This political rhetoric seems out of touch with the realities on the ground. It celebrates the skills society, which in reality is increasingly located off-shore. Politicians have not taken on board, I think, the crisis of the work ethic for those in the middle, an ethic that turns on institutional loyalty and reliability in providing for the family – an ethic that requires political programmes to ensure continuity and durability in middle-class life, to countervail against the new economy.

The writer is author of The Culture of the New Capitalism, published this week by Yale University Press