February 19 2014

On The Endangered List: The Middle Class

Charlotte Hays

President Obama likes to portray himself as the champion of the middle class, a claim he made in the 2012 campaign that went largely unchallenged.

Somebody should have called him on it.  

In an article headlined “The U.S. Middle Class Is Turning Proletarian,” urban development professor Joel Kotkin writes:

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.

Since our Founding, the chance for upward mobility has always been a hallmark of American society. This, apparently, is no longer the case. Kotkin reports not only that the middle class is shrinking but that one in three people born into the middle class will fall out of it. How does one become--and remain--middle class? Getting and holding employment is the road into the middle class.

Kotkin’s piece seems particularly relevant in the wake of a CBO report that projects the loss of half million jobs if the administration succeeds in having the minimum wage raised to $10.10. A minimum wage job isn’t middle class, but it can be the economic foothold that allows an individual to start on the ladder of upward mobility. That the White House and Democrats are so dismissive about this projected loss of jobs shows something of what is behind the shrinkage of the middle class.  

While earlier generations of liberals, according to Kotkin, recognized the importance of a good economy in expanding the middle class, the current crop of progressives “engages in fantastical economics.”

Some such as New York Mayor Bill de Blasio advocate redistribution of wealth, which may improve the economic status of some marginally and over the short-run but creates a “permanent underclass of dependents,” including part-time workers and permanent students or people in service industries who never make enough to get ahead.

Kotkin faults business and conservative leaders for not coming up with a response to the progressive position. They offer “little more than bromides about low taxes,” according to Kotkin. How can we reverse the pattern of downward mobility? This is a key to what kind of country the United States will be in the future.

Some of Kotkin’s prescriptions won’t appeal to Inkwell readers, but we can hope that his optimism is not misplaced:

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.

The middle class has been in a downward path since the 1970s, according to Kotkin. But the last five years have been an outright assault on the middle class. It is ironic that the president makes so much rhetorical hay talking about a class he is shrinking.

I can't leave the topic without noting that ObamaCare will likely shrink the middle class even more—it will provide disincentives to work, and hard work is the way one becomes and remains middle class. Of course, one needs a job at which to work hard.  

 

 

 

 

 

Comments
blog comments powered by Disqus