Enjoying a post WWII boom, US productivity increased from the 1940’s up to the mid ‘70s. Then wages began to stagnate and the middle class began to dwindle. Many factors created this problem and this isn’t a full treatise, but here are some biggies.
Unlike the very wealthy and large corporations who dominate the political scene and thus are able to shield their money with loopholes, the middle class are taxed to the fullest. In the process, they pay for everything twice. First, they pay for their purchases at the store as they buy food and clothing. Then their tax dollars fund entitlement programs supplementing low income families, who buy that same food and same clothing with their middle class taxed dollars. Robert Reich coined the term upward redistribution as he described this phenomenon in a Huffington Post article in November of 2015.
If that wasn’t enough of a problem, wages for the middle class have been shrinking. Before 1970, most jobs were well paid full-time jobs. Then the women’s movement doubled the number of workers without doubling the number of jobs. As a result of stiffer competition for not enough jobs, wages began to stagnate. Simple supply and demand. Employers were able to save money by creating more part time jobs, and desperate workers were willing to take them. Excluded from pension plans, health insurance, and accident insurance, these workers fell into a new working poor category. Many now work two or three part time jobs trying to eke out a living. You can arrange the numbers and divide the pie any way you want, but sophistry doesn’t cloud reality: that’s no longer middle class.
The Board of Governors in 2014 issued yet another proof of the dwindling middle class. Hovering on the brink of disaster, Paul Krugman estimated that 47% of the US population cannot afford an unexpected $400 expense. Inherent in life are dying appliances, car repairs and a multitude of little disasters. Unable to meet these with a reserve in savings, bills mount up. The new working poor are forced to purchase necessities with credit cards and compounded interest. It doesn’t take an Einstein to predict a downward spiral.
It hits the working poor especially hard. The Urban Institute in May of 2015 reported that a poor person has a 2 in 3 chance of remaining in poverty for at least a year, and a 2 in 3 chance to return to poverty within five years. Getting a good job—or three—helps, but without a reserve, they are unable to maintain their status. Upward mobility grinds to a halt. The middle class continues to shrink.
Looking to government for resolution of this dilemma is like looking to the fox for help in solving the problem of a dwindling number of chickens in the farmyard. Politicians enjoy contributions from the very people and corporations creating the problem, and therefore lack the incentive to fix the broken tax code or reduce the government subsidies. In addition, politicians either want to cater to the poor by promising more and more subsidies, or they want to remove all subsidies without fixing the underlying problems.
Solving what ails us must come from the very people who looked the other way and let it happen. It must come from us. We must study the issues, remove from office the bottom dwellers, and elect people who understand how to fix our broken country. Then we must hold their feet to the fire and demand they do their jobs. It falls upon we the people to save our nation, restore a healthy middle class, and make America great again. We must get involved.