The Delphi bankruptcy and GM’s announcement last week of more plant closings have sparked a new wave of concern about the middle class and the supposedly vanishing American dream. “Shifting Down: A Middle Class Made by Detroit Is Now Threatened by Its Slump,” fretted even the Wall Street Journal recently.

Certainly the downsizing of the Detroit-based auto industry is a threat to its workers, most of whom would consider themselves middle class – something that requires an income of about $45,000 a year. Delphi is proposing a base wage of $12.50 an hour, or about $26,000 a year, with a comparable downsizing of benefits as well as major work rule changes. GM says it plans to close nine plants outright.

But the death of manufacturing in the United States is vastly overstated. While manufacturing jobs have indeed contracted 20% or so just since 1996, and by 50% since 1970, manufacturing output itself has remained fairly steady when adjusted for prices, according to the Economist magazine. Something similar characterized the transition from an agricultural to an industrial economy in the early 20th century.

And what Delphi is proposing to do is not reduce its workers to Third World levels but to the levels of most other American manufacturing workers. While Delphi’s total labor cost, including retiree pensions and health care, currently is a staggering $76 an hour, according to Steve Miller, chairman and chief executive, such competitors as Lear, Johnson Controls and Denso pay wages and benefits closer to $21-25 an hour.

Miller acidly notes he has visited some of those other suppliers,”and there is no rioting in the streets there.”

Miller most recently presided over the emergence from bankruptcy of Bethlehem Steel, another icon of American industrial supremacy. He finds its story instructive. Bethlehem trimmed its workforce to 8,200 from 11,500, ended company-paid health care for retirees and handed off pension costs to the Pension Benefit Guaranty Corp. (which reduced pension payments by a third).

But as the New York Times recounted several weeks ago, Bethlehem, now owned by the Dutch giant Mittal, “has consolidated into a larger company with a leaner work force and more pricing power.” The result has been a return to profitability and good, if not spectacular, wages. “I’m doing better at this mill than I’ve ever done,” the Times quoted an employee at the huge Sparrows Point plant in Maryland.

The loss of industrial jobs has been just as rapid in other advanced countries. In America, however, it has been accompanied by an increase in other, even higher-paying jobs. That’s why the middle class, far from disappearing into the ranks of the poor, has by and large been disappearing into the ranks of the affluent.

The share of households earning more than $75,000 (in inflation-adjusted dollars) has expanded sharply 1980, while the share of households earning $25,000 or less has declined, according to a Census Bureau report last year.

Bill Ford Jr., whose company faces problems very similar to those of GM, was in Washington last week making the case for a new round of subsidies for his beleaguered industry, including support to “help American manufacturers convert existing – but outmoded plants – into high-tech facilities.”

That might be something that politicians in a lot of states with “existing but outmoded” plants might support. But overall support may be tepid, at best, from an American middle class that is by and large making the transition to a globalized marketplace on its own. Reform from within is still the best hope for a Detroit looking to rejoin the American dream.

Mr. Bray is a Detroit News columnist.