THE DIMINISHED MIDDLE CLASS
Even if Occupy Wall Street was not able to perpetuate a sustainable movement, they did us all a favor by helping to make it common knowledge that 1% of the population holds overwhelming economic advantage over 99% of the population. As it stands, the gap between the rich and poor is greater than it has ever been, even during the 1920’s “gilded age”.
At present, the top 10 percent now average nearly nine times as much income as all of the bottom 90 percent. And Americans in the top one percent average over 38 times more income than all of the bottom 90 percent. And it’s clear to most people that the top 1% hold an inordinate amount of economic and political power.
The very rich are after all the “job creators” (in Bush-speak), controlling wages, who gets hired and what work gets out-sourced. In the aftermath of the recession, many American companies have been flush with cash, yet have refused to add new jobs and most wages have been frozen at pre-recession levels. Not only do the rich control much of the economy, the 1% are also the biggest campaign contributors, giving them a huge advantage in control of the political sphere.
The economic expansion that took place during WWII and its aftermath greatly benefitted the middle class. The GI bill allowed many veterans the opportunity to attend college and buy a home. At that time, it was possible for the head of a household doing semi-skilled work to raise a family on a single salary often with the promise of lifetime employment from a single employer.
But this is not to say that it was all rosy, for everyone since factors of race still played a major role in unequal opportunity for many. As well, at this time, there were the beginnings of major efforts to weaken unions and keep wages low. But for many in the American middle class, the post WWII period was a time when they became much more prosperous than ever before.
In the 70’s and 80’s, the economic expansion of the middle class seemed to slow to a stop at the same time that the rich continued to see phenomenal gains. From 1983 to 2004 middle income Americans saw only modest gains, not even enough to keep up with inflation. During the same period the richest Americans saw their incomes nearly double every decade. While the poorest Americans during this same period saw no gains and many actually lost income.
Starting in the 80’s, the American dream of steady work and home ownership from the employment of a single family member had all but vanished. In most middle class households, both parents were forced to work just to keep up. And globalization, international trade and technology only made matters worse as American companies sought higher profits by outsourcing labor, using their multi-national status to avoid paying U.S. taxes, while computerization and automation made more jobs obsolete. During this time the rich continued to prosper while the middle class did poorly and the lower class declined.
The great recession which started in 2007 was caused by the housing crisis created by bankers who put their greed before economic fairness or even common sense. The recession hurt the middle and lower classes more than anyone else. And since the recovery, only the upper class has fully rebounded with most even making significant gains.
During the end of 2008 and most of 2009, the American economy lost hundreds of thousands of jobs every month, with a total of nearly eight million jobs lost. And even during the period of time of greatest need by the middle class, the Republican controlled congress refused to enact any of Obama’s plans to spur more job creation. And while the overall economy got better, many of the same jobs never came back. It was a jobless recovery which hurt the middle and lower classes most of all.
It is supremely ironic that the desperation of the middle class caused by dire economic conditions would ultimately lead some of them to vote for Trump. After all it was the steady deregulation of financial markets largely lead by Republicans which helped pave the way for the housing crisis. And it was a Republican congress which stood in the way of more job creation under Obama. So why would you want a nominally Republican president too?
And yet many middle class voters felt tired of being ignored, so in their desperation they voted for Trump. It’s unclear how many of these voters were aware that high on Trump’s wish list was repealing most of the Obama era financial market regulations that were put into place to stop something like the great recession from ever happening again. Additionally, Trump’s proposed budget cuts severely curtail safety net programs benefitting both the lower and middle classes. At the same time, there is really no Republican-led jobs program, or other proposed legislation on the horizon that would actually benefit the middle class in any significant way.
LINKS: SIDEBAR 5: THE DIMINISHED MIDDLE CLASS
Occupy Wall Street Declaration
Trump Moves to Roll Back Obama-Era Financial Regulations
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