Tidbits for Political Junkies with Short Attention Spans & Hearty Appetites


Wednesday, April 28, 2004

Better Jobs -- and the Shrinking Middle Class

I suspect this piece will only raise a few issues that I'll come back and visit from time to time -- but let me at least lay down some of the background, and a few useful links.

A piece I’ve quoted a lot, in various places, over the last few months is Michael Lind’s article in January’s Atlantic Monthly, “Are We Still a Middle-Class Nation?” If you missed it back then, by all means go read it, when you have the time.

To answer his title question, however -- we are by all appearances distinctly less so that at any point in our past – at least partly because we seem to have forgotten just what , as a nation, we did in the past to make the middle class thrive. It wasn't a happy accident, and it most assuredly wasn't something that was purely left to the marketplace:

To most of us, the transition from farmer to industrial worker to service worker—sometimes within three generations of one family—appears in retrospect to have been inevitable, like some geological process. Indeed, many conservatives and libertarians seem to believe that a mass middle class is an inevitable by-product of capitalism. The truth is that each of America's successive middle classes has been artificially created by government-sponsored social engineering—a fact that is profoundly important for us to admit as we think about the future of middle-class America.

Consider the first American middle class, composed of yeoman farmers. There could never have been a mass agricultural middle class in the United States without vast quantities of cheap farmland, divided up into small farms.

From 1800 to 1848 the U.S. government acquired more than two million square miles of territory, much of it arable, by purchase or negotiation (the Louisiana Territory from France in 1803; Florida from Spain in 1819; Oregon from Britain in 1846), by annexation (Texas, 1845), or by conquest (the Mexican Cession in 1848). Populists sought to ensure that this land went to small farmers rather than large landowners or speculators. The danger of European-style feudalism in the United States was neutralized by the land ordinance of 1785, which guaranteed that the federal domain would be broken up into "fee simple" properties, with no complex web of multiple ownership. And the Homestead Act of 1862 provided 160 acres of free public land to settlers who would live on it and improve it for at least five years. Meanwhile, the federal government subsidized continent-crossing railroads, and the Army Corps of Engineers built much of the country's rural infrastructure. This was social engineering on a colossal scale.

The Homestead Act, in fact, is one of the prouder accomplishments of the nineteenth-century Republican Party – and an excellent reminder of just how far from its roots, and any sense of the common weal, that the modern GOP has become. What is sad here, really, is that there doesn’t seem to be any serious discussion, on either side of the political divide, of anything of remotely comparable grandeur or vision. There isn't, at least not yet, a New New Deal. It is almost as we have forgotten, as a nation, how to be truly bold.
In the absence of some system of private or public redistribution, then, there is no guarantee that rising national productivity will spontaneously and inevitably produce rising incomes and wealth for most Americans, rather than just windfalls for the fortunate few.

Since the 1970s inequality of both income and wealth in the United States has increased dramatically. As Paul Krugman has observed in The New York Times, a Congressional Budget Office report shows that from 1979 to 1997 the after-tax income of the top one percent of families climbed 157 percent, while middle-income Americans gained only 10 percent, and many of the poor actually lost ground. The share of after-tax income that goes to the top one percent of Americans has doubled in the past three decades; at 14 percent, it roughly equals the share of after-tax income that goes to the bottom 40 percent. The concentration of wealth at the upper levels of the population has been even more extreme.

It is worth noting, of course, that this growing income inequity is also the result of "social engineering on a colossal scale" -- it just happens that in this case the consequences have been colossally wrong.

Three new pieces, from the last few days, underscore just how extreme the inequities are. Nathan Newman tackles the Wal-Mart problem, and the global race-to-the-bottom in wages; Claudia O’Keefe takes a look at “Brave New Jobs” in the service sector; and Robert Kuttner sums it up, in a fine argument not just for jobs, but good jobs:

One approach to creating good jobs, however, is a proven failure: George Bush's strategy of cutting taxes, gutting regulation, and trusting private industry to do the rest. This path has led to a few astronomically compensated executive jobs, a bonanza for a few fortunate investors, and a slow slide for the working middle class. Ultimately, many roads are available in the new economy. How to reconcile globalism with good American jobs remains a political choice.


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