Why America’s middle class is lost

Why America’s middle class is lost(washingtonpost.com)

30 points by Kopion 11 years ago | 5 comments

Many of the folks commenting on the washingtonpost site seem to miss the article's main thesis, which is that the problem is bigger than conservative vs liberal (or Repub vs Dem, etc). The problem isn't caused by too much or too little regulation, too high or too low taxes, too much or too little social services.

The problem is caused by computerization, automation, and globalization. It's a hard pill to swallow because those things also bring amazing benefits that we as a society probably wouldn't want to give up.

Just look at the description of the jobs Thompson did in the article: run plans from one side of a factory to another? Fabricating plastics? Spraying foam? None of those things would be done by a human today.

There may have been, for a time, some balance between the value of labor and the force of capital, but labor is increasingly devalued, so the end result is naturally a decrease in wages and employment.

Human workers today are like the working horse as industrialization arrived.

r00fus 11 years ago | |

> The problem is caused by computerization, automation, and globalization.

I disagree. The problem is corruption. If we still had Glass-Steagal, and controls against money influencing elections, there might be a chance that the middle class or poor may have some influence to control and defray the inevitable consolidation effect of wealthy interests.

However, those controls are effectively gone, and with it will go the middle class as there is no voting power anymore without courting big money.

Aside from Alan Grayson and Ron Paul (now retired), there is none in Congress who doesn't take corporate money. We are effectively a corporatocracy where the wealthy have massive controlling interest.

ende 11 years ago | | |

This isn't really true. There are considerable indications that all that corporate money doesn't really provide marginal advantages in close elections. There's an interesting study I read (would link but im typing from phone) that corporate donors don't actually back candidates with an exectation of their election, but rather hedge their bets backing both candidates in a race in order to insure lobbying access with whoever wins. So you're actually right with your first statement, the problem is corruption, but at the post-election level. These situations, and the nature of our elections in general, are largely the result of a two party system being fairly easy to game in that manner. That in turn is largely the result of an electoral system that is mathematically predisosed towards two party outcomes. The causes there are plurality voting, partisan primaries, and gerrymandering. Funding is also an issue, but largely irrelevant by the bipartisan filtering process.

But solving that wouldn't directly address the subject of the article. A true multiparty system however could possibly create enough policy market competiton to promote more innovation in policy ideas.

In any event, the OP of your reply is right. The current trends are largely dictated by massive disruptions caused by labor market expansion, automation and hyperefficieny. These developments bring both blessings and challanges, and in order to address the later we have to move beyond the tired prescriptions of the old world left and right ideaologies. Just like with every prior technological disruption of the status quo, deleveraging and adaptation will eventually occur, but in the mean time we need a political system that facilitates idealogical innovation to smooth the bumpy road ahead.

wsc981 11 years ago |

James Altucher claimed the middle class is dead in an article from 2013 [0].

I believe he's correct. In Europe the situation isn't much different from the USA. Middle class wages have not increased while company profits did increase in the last ~5 years. More data to be found in the Global Wage Report 2014/15 [1].

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[0]: http://www.jamesaltucher.com/2013/01/10-reasons-why-you-have...

[1]: http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcom...

PythonicAlpha 11 years ago | |

In Europe, our situation is very similar to the US -- we are just some years behind. So whatever happens to the US, is also happening to middle Europe. The reason is, that our governments are happening to copy all the trends from the US and sell it to the citizen as great "blessing" from the US, even when the US long has found that it was a mistake.

And yes, the middle class is also in decline in Europe very fast. Germany once had one of the best social security system in the world. Today it is in decline very fast and some thing is happening, that nobody would have found possible in 1990 ... we speak today of "poverty among the elderly" and not for some percent, but of vast numbers of them. And those things that where invented to prevent it, happens today to be the reason for it.

The dreams of "unlimited money and profit" from the 80s, 90s and 00s where found to be false dreams that came only true for <1% of the people.