The U.S. Middle Class Is Turning Proletarian

New Geography ^ | February 16, 2014 | Joel Kotkin

[2ndDivisionVet]

The biggest issue facing the American economy, and our political system, is the gradual descent of the middle class into proletarian status. This process, which has been going on intermittently since the 1970s, has worsened considerably over the past five years, and threatens to turn this century into one marked by downward mobility.

The decline has less to do with the power of the “one percent” per se than with the drying up of opportunity amid what is seen on Wall Street and in the White House as a sustained recovery. Despite President Obama’s rhetorical devotion to reducing inequality, it has widened significantly under his watch. Not only did the income of the middle 60% of households drop between 2010 and 2012 while that of the top 20% rose, the income of the middle 60% declined by a greater percentage than the poorest quintile. The middle 60% of earners’ share of the national pie has fallen from 53% in 1970 to 45% in 2012.

This group, what I call the yeoman class — the small business owners, the suburban homeowners , the family farmers or skilled construction tradespeople– is increasingly endangered. Once the dominant class in America, it is clearly shrinking: In the four decades since 1971 the percentage of Americans earning between two-thirds and twice the national median income has dropped from 61% to 51% of the population, according to Pew.

Roughly one in three people born into middle class-households , those between the 30th and 70th percentiles of income, now fall out of that status as adults.

Neither party has a reasonable program to halt the decline of the middle class. Previous generations of liberals — say Walter Reuther, Hubert Humphrey, Harry Truman, Pat Brown — recognized broad-based economic growth was a necessary precursor to upward mobility and social justice. However, many in the new wave of progressives engage in fantastical economics built around such things as “urban density” and “green jobs,” while adopting policies that restrict growth in manufacturing, energy and housing. When all else fails, some, like Oregon’s John Kitzhaber, try to change the topic by advocating shifting emphasis from measures of economic growth to “happiness.”

Other more ideologically robust liberals, like New York Mayor Bill de Blasio, call for a strong policy of redistribution, something with particular appeal in a city with one of the highest levels of income inequality in the country. Over time a primarily redistributionist approach may improve some material conditions, but is likely to help create a permanent underclass of dependents, including part-time workers, perpetual students, and service employees living hand to mouth, who can make ends meet only if taxpayers subsidize their housing, transportation and other necessities.

Given the challenge being mounted by de Blasio and hard left Democrats, one would imagine that business and conservative leaders would try to concoct a response. But for the most part, particularly at the national level, they offer little more than bromides about low taxes, particularly for the well-heeled investor and rentier classes, while some still bank on largely irrelevant positions on key social issues to divert the middle class from their worsening economic plight.

The country’s rise to world preeminence and admiration stemmed from the fact that its prosperity was widely shared. In the first decades after the Second World War, when the percentage of households earning middle incomes doubled to 60%, it was no mirage, but a fundamental accomplishment of enlightened capitalism.

In contrast, the current downgrading of the middle class undermines the appeal of the “democratic capitalism” that so many conservative intellectuals espouse. In reality, capitalism is becoming less democratic: stock ownership has become more concentrated, with the percentage of adult Americans owning stock the lowest since 1999 and a full 13 points less than 2007. The fact that poverty — reflected in such things as an expansion of food stamp use — has now spread beyond the cities to the suburbs, something much celebrated among urban-centric pundits, is further confirmation of the yeomanry’s stark decline.

How our political leaders respond to this challenge of downward mobility will define the future of our Republic. Some see a future shaped by automation that would “permanently end” what one author calls “the age of mass human labor,” allowing productivity to rise without significant increases in wages. In this world, the current American middle and working class would be economically passé.

One would hope business would have a better option that would restart upward mobility. Lower taxes on the investor class, less regulation of Wall Street, and the mass immigration of cheap workers — all the rage among investment bankers, tech oligarchs and those with inherited wealth — does not constitute a compelling program of middle-class uplift. Nor does resistance, particularly among the Tea Party, to make the human and physical infrastructure investment that could help restore strong economic growth.

Fortunately history gives us hope that this decline can be turned around. The early decades of the Industrial Revolution saw a similar societal decline, as once independent artisans and farmers became fodder for the factory lines. Divorce and drunkenness grew as religious attendance failed. But a pattern of reform, in Britain, America and even Germany, helped restore labor’s place in the economy, and rapid growth provided the basis not only for the expansion of the middle class, but remarkably improvements in its well-being.

A pro-growth program today could take several forms that defy the narrow logic of both left and right. We can encourage the growth of high-wage, blue-collar industries such as construction, energy and manufacturing. We can also reform taxes so that the burdens fall less on employers and employees, as opposed to those who simply profit from asset inflation. And rather than impose huge tuitions on students who might not finish with a degree that offers employment opportunities, let’s place new emphasis on practical skills training for both the new generation and those being left behind in this “recovery.” Most importantly, the benefits of capitalism need be more widely shared if business hopes to gain support from the middle class for their agenda.

[2ndDivisionVet]

Joel Kotkin is executive editor of NewGeography.com and Distinguished Presidential Fellow in Urban Futures at Chapman University, and a member of the editorial board of the Orange County Register. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

[cunning_fish]

Isn’t it a main democrat goal since LBG? A war on poverty to bring more poverty.

[okie01]

An intelligent essay with a different perspective.

Thanks for posting.

[Cringing Negativism Network]

This is really happening.

The GOP is in part causing this, by shipping American jobs to China.

Bring back American jobs. Now.

[Jack Hammer]

“...which has been going on intermittently since the 1970s...”

The author seeks - as does everyone in the press these days - to deflect blame from the Marxist in the White House.

You want to know why the economy is in the tank? It’s because that’s precisely where Obama wants it.

[cunning_fish]

>>>“...which has been going on intermittently since the 1970s...”

The author seeks - as does everyone in the press these days - to deflect blame from the Marxist in the White House.

You want to know why the economy is in the tank? It’s because that’s precisely where Obama wants it.<<<

What made it possible to put a Marxist to a White House? It is all growing from the 60s.

[cunning_fish]

>>>This is really happening.

The GOP is in part causing this, by shipping American jobs to China.

Bring back American jobs. Now.<<<

War on Women, Zimmerman show trial etc are a smoke screen used by the democrats to camouflage a real war they are waging. I mean the War on the Middle Class. Feminism, racism, LGBT crap - all the -isms to push for affirmative action which is a main tool to ruin the mainstay of the Middle Class - an accomplished white male and his family. Enabling China the way you are talking is just another angle of it.

[CitizenUSA]

“Bring back American jobs. Now.”

You repeat that quite a bit, but...you’re 100% right. How in the world are we ever going to get people out of the dependency class without jobs, and I’m talking real jobs, not just low pay and low skill “service” ones. We need manufacturing, construction, and other skilled labor, and that labor needs to be American, not hordes of illegal aliens paid under the table.

American jobs for Americans NOW.

[Cringing Negativism Network]

Thanks.

China has now built up a larger export machine, than America’s manufacturing base.

China continues to rapidly grow.

America we really, are living in the past. Bring back American jobs.

[Fee]

If Americans want to preserve their place in the world and standard of living of the past,they must first demand their corporations keep trade secrets and skills in US. Study the story of silk. If China ever dominates in the sciences and etc, that is the model China will preserve her power and society. The US lead the world in science and manufacturing till the greedy corporations decide to close the tech gap with China, India and Mexico by sending American technicians over to teach them how to do jobs Americans were doing. 1980 Chinese workers could not even decently solder circuit boards nor their factory managers had the skill to manage production. Then US corporate reps showed up set up schools and tech skill shops to teach the capable Chinese how to do it. Once the factory is set up we just close the ones in the US and dump the high paid workers onto the US taxpayers as unemployment. Did the price of the goods made in China drop in price. Nope. $ 300 Apple Smart phones, Chinese factory (not worker) gets $ .75. That means Apple execs pocket $ 299.25 for themselves and yet proclaim that the profit margins were too razor thin to have them built in the US or pay higher corporate taxes on their profits. It is a tough business they all scream and yet their HQ look like glass and modern metal palaces, with scifi looking cafeterias, offices, million dollar sculptures and art in lobbies, designer furniture, state of the art gyms and etc. Pat Buchanan is the only one that notices something is not right with the corporate narrative that they pay too much taxes and cannot afford to have US workers. Tea Party also notices something stinks with the corporate narrative. TP members are learning the traitorous nature of corporate America via the illegal immigration issue and more guest high tech workers while many American college grads cannot get jobs (because they are Americans) and others are losing it to Obamacare and offshore jobs. If the big gov and big corporation do not change, the people will rise up and change them. Opening battles are already underway between the screwed and corporate minions in left wing Oakland CA. Google (pro Dem corporation) buses can take over public bus stops. The poor (pro Dem voters) are slashing their tires and throwing rocks at them. Such arrogance is met by righteous violence. The main street Americans in the GOP and Dem are fighting with their party agents of corporate America faction because they are sick and tire of being screwed by them and forced to bailout their messes.

[Jack Hammer]

“It is all growing from the 60s.”

Yep - the 1860s.

[Cringing Negativism Network]

Good post. You are 100% correct.

[nathanbedford]

An American soldier returns from duty abroad with three limbs instead of four. His government rewards him by reneging on its promise to care for him and provide for his retirement by cutting his pension.

An American bureaucrat blows the whistle on corruption and is fired and disgraced by his government while his plight and the corruption which he exposed go unremarked by the American press.

An American couple complete 40 years of dutiful employment in the private sector and enter retirement under the expectation that their savings and their home together with Social Security would be enough to cover their "golden" years to find that there pensions have been bankrupted, their savings ravaged by inflation, their Social Security and health care under attack, their home worth less than they had been led to expect.

A young woman graduates from Bryn Mawr magna cum laude with a degree in women's studies only to find that she is massively in debt and with limited employment prospects. She had been told by the professors in college that the important issue confronting America was the Republicans' war on women and economic challenges facing America are the result of Republicans' failure to regulate big business and big banks. She is unaware of the amount of federal monies funneled into her alma mater by way of grants, subsidies, tax exemptions, and "projects."

The middle-class is being inexorably hollowed out by the government it votes for every two years.

[dennisw]

War on Women, Zimmerman show trial etc are a smoke screen used by the democrats to camouflage a real war they are waging. I mean the War on the Middle Class. Feminism, racism, LGBT crap - all the -isms to push for affirmative action which is a main tool to ruin the mainstay of the Middle Class - an accomplished white male and his family. Enabling China the way you are talking is just another angle of it.

My take too!!

Odungu and his Democrats are smart to focus on income inequality. This shows they are doing their polling and focus groups so now you see them unleashing their psyops warfare via the mass media to imprint income inequality on Americans brains. Not that they have any programs that will fix it. Not even a bit, because socialism always fails.
But it is a perfect hook for the lo-info voters our public skools educational system has churned out

The last 30 years of free trade idiocy are largely to blame for American income equality. I have followed this since 1990. With lack of honest indusrty we now have the FReserve and its mad money printing to juice our phony economy where non-productive sectors AKA paper shufflers (Federal Gov't, Wall Street, Facebook etc) dominate

Detroit, steel making and other manufacturing sinks for 30-40 years while the Federal Gov expands

[dennisw]

A superior post. Thanks!!!

[knarf]

I always thought the working class WAS middle class.

Never in my blue collar life did I consider myself poor, nor stuck in a rut or something

Most of the time I had two cars (one for the Mrs), the 5 kids were fed, healthy, educated and cared for.

We went on vacation once a year (If I decided to stop working to go), and a ton of other very satisfying elements of my life

Y'mean .. I WASN'T content and happy ... with a bank account to boot ?

[dennisw]

War on Women, Zimmerman show trial etc are a smoke screen used by the democrats to camouflage a real war they are waging. I mean the War on the Middle Class. Feminism, racism, LGBT crap - all the -isms to push for affirmative action which is a main tool to ruin the mainstay of the Middle Class - an accomplished white male and his family. Enabling China the way you are talking is just another angle of it.

Single professional white women are Obama's biggest allies in the war on the married white male (and his family) who is the most conservative American these days. As such, single professional white women align themselves (politically) with multiKulturalsim, gays, blacks, illegal immigrants, open borders etc.etc, Many married professional white women are as bad and as leftist. Universities are now turning out more female than male lawyers so will be controlling the legal system and divorce courts?. Universities become more and more feminized and hostile to men with normal testosterone levels so men drop out of this game.

The job mix in America is moving way from guy type jobs (hands on blue collar) and towards jobs that liberals, women and gays like and  gravitate to (fashion, Government, paper shuffling jobs, university administrator, EPA, OSHA)

[Carbonsteel]

The media failed to mention that when Democrats talk about equality, they mean bringing everyone down so that we will all be equal in our poverty.

[dennisw]

Socialism and communism mean the equal distribution of poverty.

[jsanders2001]

I’m one of them. The article speaks truth. I believe the downward spiral is fallout from Obama’s horrid economic policies and I think its intentional. What we are experiencing is due to a social experiment being conducted by mad men with far too much money (that are being controlled by evil forces / Satan spoken about in the bible) who want to reduce and bring the U.S. into a state where it can be inducted into the NWO. I think this is being done because the U.S. was once a nation founded on Christian principles and was too strong for the dark forces to overtake and they knew we would have to be reduced for other objectives to be attained. I know it sounds like the ramblings of a mad man but think back to how much has changed since 2001 and especially since 2008