The size of the middle class in America has been one of this country’s greatest strengths. It demonstrated that economic success was available for many, it provided political stability and minimized unwarranted attacks on the “rich”, and wealth and opportunity was widely shared.
Notice that everything I wrote in the prior paragraph was written in the past tense. Why? Because, the middle class isn’t what it used to be and in fact is suffering more and more all the time. Pointing this out isn’t class warfare, it is identify a source of anxiety among many in the is country. There is fear among the middle class for their own economic survival and for the future awaiting their children. And some are afraid of possible negative impacts on political stability in this country, including fears of (armed) class warfare.
The fact is that the middle class, since 1979, has shared in the benefits of increased productivity less and less, while the top executives and managers have taken an ever larger share of economic growth. Check out this chart from The New York Times. Here is part of Robert Reich’s accompanying article, which is worth a full read:
Look back over the last hundred years and you’ll see the pattern. During periods when the very rich took home a much smaller proportion of total income — as in the Great Prosperity between 1947 and 1977 — the nation as a whole grew faster and median wages surged. We created a virtuous cycle in which an ever growing middle class had the ability to consume more goods and services, which created more and better jobs, thereby stoking demand. The rising tide did in fact lift all boats.
During periods when the very rich took home a larger proportion — as between 1918 and 1933, and in the Great Regression from 1981 to the present day — growth slowed, median wages stagnated and we suffered giant downturns. It’s no mere coincidence that over the last century the top earners’ share of the nation’s total income peaked in 1928 and 2007 — the two years just preceding the biggest downturns.
Starting in the late 1970s, the middle class began to weaken. Although productivity continued to grow and the economy continued to expand, wages began flattening in the 1970s because new technologies — container ships, satellite communications, eventually computers and the Internet — started to undermine any American job that could be automated or done more cheaply abroad. The same technologies bestowed ever larger rewards on people who could use them to innovate and solve problems. Some were product entrepreneurs; a growing number were financial entrepreneurs. The pay of graduates of prestigious colleges and M.B.A. programs — the “talent” who reached the pinnacles of power in executive suites and on Wall Street — soared.
We have to restore some semblance of equal economic opportunity and equitable sharing of income in order to return America to greatness and balance.
