There is new evidence of the high price working-class people are paying because of the stranglehold conservatives have on our economy that should embolden Democratic candidates to offer bolder, progressive populist prescriptions for addressing income inequality and remaking our economy.
The headline of the article on middle-class fortunes published in The New York Times on Tuesday could hardly have been more stark: “The American Middle Class Is No Longer the World’s Richest.” The underlying facts are by now familiar: Incomes of the top 5 percent have skyrocketed in the past three decades, reflecting the disproportionate share of national wealth that has moved from working people to the ownership class.
What we may not be used to hearing is the conclusion by authors David Leonhardt and Kevin Quealy that “the American middle class, long the most affluent in the world, has lost that distinction.”
Middle-class incomes in Canada appear to be higher than they are in the United States, according to their research. Lower-income families – specifically people in the bottom fifth of the income distribution – fare much better in Sweden, Norway, Finland or the Netherlands than the United States, their report says. And while incomes of working-class families have remained stagnant in the United States after the 2008-2009 recession, they have risen in much of Europe.
The Times’ story cites two factors. One is that younger Americans are falling behind their appears in other developed countries in education attainment, based a recent study by the Organization for Economic Cooperation and Development. “A second factor,” the story continues, “is that companies in the United States economy distribute a smaller share of their bounty to the middle class and poor than similar companies elsewhere. Top executives make substantially more money in the United States than in other wealthy countries. The minimum wage is lower. Labor unions are weaker.”
These are the consequences of deliberate economic decisions over the past three decades made by conservatives when they had control of the levers of power and fiercely defended against efforts by the Obama administration to reverse them. Even after six years of the Obama administration in the White House and seven years of Democratic control of the Senate, tax policies are still in place that enable the highest income earners to have lower income-tax rates than many middle-class families. Higher education continues to be starved of funding, with the consequence that college students start their careers with a millstone of debt around their necks even as they enter a workforce where unions have been weakened and wages – especially those at the bottom – have stagnated at the behest of corporate lobbyists fighting increases in the minimum wage.
Conservative political candidates will respond to this in the coming months with a form of faux populism. Many of these candidates will say that Washington has paid too much attention to the powerful and too little to ordinary working people. They will not, of course, hold themselves accountable for being the very ones guilty of doing that, and they will certainly not own up to the ways that their policies would continue favoring the powerful at the expense of everyone else. Their agenda of more tax cuts for the wealthy, less support for struggling families and less regulations to obligate corporations to act in the public interest will worsen income inequality and cause working families in the U.S. to fall even further behind their peers.
There will be a temptation for Democratic candidates this fall to say, as they did to disastrous political effect in 2010 after passing what proved to be a too-meager economic recovery bill, that there are “green shoots” in the economy, and we simply need more Democrats to do more tending in the garden to help these shoots flower.
That will not be any more of a winning message this year than it was in 2010, warns Democracy Corps in its latest political memo. “As a start, Democrats should bury any mention of ‘the recovery’,” the memo says. Working-class families, such as those interviewed for the Times story, don’t feel it, and when Democrats speak of economic recovery, they simply sound out of touch with reality.
“The more powerful set-up for Democrats’ economic message is the contrast with CEOs and the 1 percent whose incomes have soared, while everyone else works hard just to get by,” the memo continues. “That reflects the experiences of real people in this economy.”
That would call for placing the responsibility for the U.S. middle class falling behind its counterparts in other developed countries squarely on the conservatives and pro-corporate politicians in both parties who supported tax cuts for the rich, weakened economic support programs for everyone else, and set the climate for suppressed wage growth for ordinary workers as CEO pay soared. Income inequality didn’t happen. It has a set of causes. We need to repeatedly name them.
We need to be equally frank about the solutions. We need to raise the minimum wage, and we also need to strengthen the ability of workers above the minimum wage to bargain effectively for higher wages and benefits, so that they can rightfully share in the gains their labor have produced. We need corporate tax reforms that restores true progressivity to the tax code. We need to invest in our young people at every stage of their lives, from preschool through affordable college. And we need to invest in the foundations of our future economic growth, including our transportation systems, green energy and basic research. The policy answers embodied in such proposals as the Progressive Caucus’ Better Off Budget may have only gotten the votes of 96 House members, but its cornerstones have broad support among the Populist Majority, and they ought to be front-and-center of the coming political debates.
In 2008, Samuel J. Wurzelbacher, best known as “Joe the Plumber,” mocked then-candidate Barack Obama for saying that “when you spread the wealth around, it’s good for everybody.” Obama survived the mocking, but the concept of “spreading the wealth around” so that all Americans share in the economic growth that their sweat helps create did not. But the time for timidity is over. America is not used to being second-class, and its working class shouldn’t stand for being second class because of policies that enable a small group of people to snatch all of the wealth.
Now that the consequences of not spreading the wealth around are more clear than ever, let’s get bolder about putting forth a progressive populist alternative.