The decline of the middle class; and why it is likely to continue.

This was originally written in response to an article from The Atlantic.

Good article, actually.  Not so naive as all that.  I’ve also looked at current trends as cycles that are playing out to conclusion.  Whether we can arrest those cycles is not clear.  But three things struck me in this article.
“Middle-paying jobs in the U.S., in which some workers have been overpaid relative to the cost of labor overseas or technological substitution” is in the article.  Overpaid is relative.  Those workers were making money for the employer; it’s simply that a Chinese or Indian worker could be paid less.  This means that the managerial elites can make more profit by laying off the US worker and replacing him with a Chinese, who’s working in China.  More money at the top, less in the middle class.  Plus with layoffs comes stratification in the US labor force.  Some laid-off workers are well educated and in the middle of their productive lives, say in the mid-30’s or 40’s.  If you’re less educated, older or younger, you’re in a weaker position.  Less competitive, in other words.  Uncompetitive workers are unlikely to remain in the middle class for long.  Employers can be very choosy just now, with all the surplus workers to choose from.  Those uncompetitive workers aren’t likely to get jobs until the economic decline reverses.
Education: the article is correct about the need for education.  But where’s it to come from?  American schools, even major universities, are poor sources for education compared to what they once were.  They’ve become sites for social experiment rather than education, for warehousing of youths who aren’t really “students”, because they aren’t studying and learning, only marking time until they can drop out or ‘graduate’; and at the top, they’re profit-making enterprises who don’t make money if marginal students are dropped from programs they have no realistic expectation of making a career in.  So they stay in, borrowing money and passing it to the university.  At the lower level, middle and high school, students are being prepared for college, whether they’re suited for that or not.  And many students don’t complete that college preparation, so they get nothing from their attendance at middle/high school.  They aren’t job ready nor are they college ready.  If they DO get to college, they begin with remedial classes to try to pick up what they missed in high school.  This isn’t likely to change.  It’s supposed to be the fault of teachers, less well paid than college grads in other fields, or administrators, and neither of these has any real power to make substantive changes.  Until school boards (at local, state, federal levels; cabinet positions, in other words)  become responsible for whether students get educated, rather than just responsible for setting budgets that schools live with for better or worse, then nothing will change.  I should also note that judges stick an oar in now and then, but again, they only care that procedures be followed; if these are bad for student education, judges don’t worry about that.  Based on the evidence, it isn’t even a consideration.
Politics: we set tax policy and trade policies as hodgepodge mixes of mostly-bad policy.  We run a trade deficit that’s large and getting larger, and no one apparently realizes that the money sent out of the national economy, in excess of what comes back in,  isn’t spent on economic activity within the nation.  When this deficit happens, either the home economy must contract in response, or it must be propped up by borrowing.  That’s the course taken by all the ‘developed’ nations, and ALL of the developed nations are in trouble.  And no economy can keep this up forever.  We must retake control of our politics and our trade policies; stop the free trade, reform tax policies so that it’s more favorable to keep an American company manufacturing here than moving operations overseas, level the economic field by either a Gross Receipts tax system or a Value Added Tax system to return competitiveness.  These are no longer choices; they’re necessities, if we plan on remaining a major power.  If we try to compete with China or India or Indonesia on the basis of price, the only result is that our middle class is forced to live on what that Chinese/Indian/Indonesian worker lives on.
To get any of this done, we must begin with our political system.  The constant turnover of Republican to Democrat to Republican must cease.  A start would be to establish term limits, so that power can’t become so entrenched between the major parties.  A third or fourth party, so that voters can have a real choice, is also desirable, as would be opportunity for a true independent to be elected.  If you’re a moderate, not particularly Progressive nor particularly Conservative, what is there for you to support?  The critters we put into the legislative branch and even the executive are more interested in gaining/retaining/regaining power.  They have evolved a system that perpetuates itself, power allowing government money to be funneled to those who will return money to the politicritter so that he/she can send more money…a real perpetual motion machine.  The TEA party isn’t the answer; government is needed.  The interlaced upperclasses who nominate and maintain government candidates, who in turn favor those upperclasses with legislation, can only be controlled by a government with the willingness to do that.  We don’t have such.  Meantime, the elites run the nation for their own interest, the middle class is slowly disappearing, the underclass is growing.
We’ve seen this before.  Americans carried out a revolution back then, in the late 18th century.  It remains to be seen if any action short of revolution will interrupt this current trend or cycle.  If the American economy is no longer the passive conduit for money that it’s become, feeding the improvements that are happening in India and China, will the burgeoning nations of the former ‘third world’ accept this?  It would require major downward adjustments in their own economy, and they may not be able to absorb that. Bluntly, it could lead to the Third World War.
And this time, we in the West are no longer in a strong position.  The nukes may well begin to fly.
Interesting times, indeed.
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: