Who's Got the Political Will to Save the Middle Class?

AP Photo/Charles Dharapak

It’s not easy being president during an epoch of downward mobility for the American people. The shrinking of the middle class--a phenomenon to which Americans are historically unaccustomed, most particularly during recoveries-- depresses the president’s popularity, drags down that of his party, and generally plays hell with incumbents’ election prospects.

That the American people are downwardly mobile was underscored this weekend by a report from the National Employment Law Project demonstrating that while lower-wage jobs accounted for just 22 percent of the jobs lost during the recession, they account for 44 percent of the jobs created since the recession ended in 2010. Middle-wage jobs, by contrast, accounted for 37 percent of the jobs lost during the recession, but just 26 percent of the jobs created since. Median annual household income is still roughly $4,000 beneath its level before the recession started.

Indeed, the most alarming polling for the Democrats--in a sense, for all incumbents--should be the January poll from the Pew Research Center that showed that the percentage of Americans describing themselves as middle class had declined from 53 percent in 2008 to 44 percent this year, while the percentage describing themselves as lower class rose from 25 percent to 40 percent during this time. The share of Americans describing themselves as upper class also declined during this time from 21 percent to 15 percent. More discombobulating still, the decline in the upper- and middle-class self-designees and the rise in the number of those who called themselves lower-class really began not in 2008 but 2010, when the recovery was ostensibly underway.

These changes reflect deep structural shifts in the American economy. Beginning in 2008, the slow erosion of manufacturing jobs became an avalanche, the number of jobs in construction plummeted, and long-embattled unions found themselves so enfeebled that they were unable to arrest the decline of their members’ wages and benefits in every sector of the economy. Collective bargaining effectively vanished from the American economic landscape. As employers automated jobs, reduced wages and replaced full-time workers with temps, American workers had no capacity to defend their interests.

These were all developments decades in the making, and cannot be reversed absent a massive shift in public policy. President Barack Obama, it’s clear from his speeches and proposals, understands that. The Affordable Care Act and his 2009 stimulus were his initial attempts to make such shifts, and succeeded in providing health coverage to millions and stopping the economic near-collapse of 2008-2009. He was unable to persuade enough Democratic senators to pass a version of labor law reform, the Employee Free Choice Act (EFCA),  that would have made it easier for workers to form unions. And with the Republican capture of Congress in 2010, none of his subsequent economic proposals--raising the minimum wage, funding major infrastructure projects--have gone anywhere.

The GOP’s obstructionism has badly damaged that party in the polls, but it’s damaged Obama as well--rendering the entire federal government incapable of even beginning to address the strange crisis of downward mobility that Americans are experiencing. An Allstate/National Journal poll released Monday shows that while more Americans believe that Obama and the Democrats are more aligned with their interests than the Republicans are, a scant 25 percent believe that Obama’s agenda would increase opportunities for people like them.

The changes that are necessary to arrest this decline are so fundamental that they virtually require a new political order. In essence, wealth and income now flowing almost entirely to capital has to be redirected to wages, through a combination of corporate tax reform that rewards companies that boost wages at capital’s expense, a re-legalization of collective bargaining, major increases in taxes on high levels of wealth and income, and massive public works programs that move the nation towards full employment. Such changes are hardly on the horizon, which means that not only Obama but his successor--and almost surely, his successor’s successors--will experience the same drop in support that he has. We have entered an age of dwindling economic prospects, and it will yield dwindling approval ratings for elected officials until they can turn the economy around. 

Comments

I'm sorry, Unions won't fix this, neither will changes in taxes to "redirect wealth to wages" nor will any public works programs.
The root of the problem is identified in the article; that we, as a nation, have lost a large chunk of our manufacturing base. The root of this is unfavorable trade agreements that we have.
We simply cannot have "well paying" middle class manufacturing jobs here while we allow the same products, made in China, India, etc., by workers paid pennies on the dollar, to be sold here free of tariffs. No American company, no matter how efficient or well-meaning, or well-run can survive paying its workers $25-$30/hour (or more with benefits) while competing against the same product made in china for less than $1.00/hour.

No amount of tax changes, regulations, or unions can stop this. They may only slow it down.
Even if we FORCED all American companies to employ more workers and pay them more, it would only be a matter of time before these companies pack up and move, or go bankrupt.
The other culprit is excessive regulations. Let’s assume that we, as a country, decide that all products MADE in the U.S. need to be pollution NEGATIVE, i.e. actually absorb existing pollution. That would be AWESOME! Expensive, but AWESOME! The problem is that the extra costs of meeting this goal would show up in the costs of the products. Well, then that's just the cost of being green, right? Well that’s fine as well, except if you let cheap products, made outside of the U.S.; made in any number of poluting ways to be sold here, without compensating tariffs. Well, which product will sell more, the super GREEN product, or the much cheaper product?
That’s the issue, at the end of the day, this fictitious pollution law didn't reduce pollution at all, it just moved it, and a bunch of jobs, overseas.
This is the problem we face, we have tons of expensive regulations here in the US that our companies have to follow, AND these regulations might even be GOOD, but we then have a back-door open for foreign companies to avoid these costs by simply NOT manufacturing here, and just selling here.

The US may be altered by global changes like the possible gold-backed currency from perhaps China, India, Brazil and others. Our military empire that began with Vietnam, moved to South America and the Middle East is over. Economic weakness of the people, climate change and unrest may begin to reorganize the people regardless of the wishes of the oligarchs. Our support system of food, energy and community will be reorganized. Global imports will not work with the cost of global transportation. Democracy is not a factor anymore in the US. The people will be responding trying to save themselves with no help from those trying to extract for profit and control for power.

There is a YouTube video, 5 minutes, contrasting the 1946 to 1976 "golden era" with the "1980 to 2008 "great moderation". It's good. https://www.youtube.com/watch?v=6zsXUDQXKuQ

The above comment about off-shoring manufacturing jobs is important. The concept -- When there's more for me, there's less for you -- also needs to be reviewed seriously. The collective income of 1% is greater than that of the lower-earning 60%, see this Citizen for Tax Justice table:
http://ctj.org/ctjreports/2014/04/who_pays_taxes_in_america_in_2014.php#.U2p7uStzlvY

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