The root cause of the failure of the middle class?

[1-Old-Man]

Hey, its sunday evening and we can chat ... OK?

What do you think caused the downfall of the middle class, the "root cause" as they say? My thinking is that at its base the cause was that labor was denied participation in the management of the workplace. There have been great increases in profitability of the products of all forms of work in the last 50 years but labor has simply not got its fair share of the very increase in profit that resulted from increases in their own productivity.

[Angry Dragon]

1. I would agree

[XemaSab]

2. I'll also throw in the rise of the big box store and the decline of main street

Back in the day, every town of any size had a greengrocer, a butcher, a bakery, a clothing store, a toy store, a hardware store, and so forth, and they were all owned and run by people who were making a comfortable living.

Now the small towns have maybe a supermarket while the larger cities have the same big box stores you see everywhere staffed with people making minimum wage. Since people are making minimum wage, they can only afford to shop at Wal Mart and the beat goes on.

(On edit: which ties into what you're saying. Very few people are owners, and most people are workers.)

[1-Old-Man]

3. I could be way wrong, but wasn't there a time when Wal Mart stocked mostly domestic goods?

I swear I remember seeing Wal Mart advertisements on TV that boasted of how many of their products were "Made in the USA". Not now of course, but then.

[JHB]

38. That policy didn't outlive Sam Walton by much

Walton turned over operations to someone else in 1988, and died in 1992.

By most accounts, Walton sought out Made in the USA merchandise: in 1995 only 6% of their merchandise was imported. By 2005 it was 60%.
http://en.wikipedia.org/wiki/Criticism_of_Walmart

Basically, their insistence on decreasing prices from suppliers actively pushed the suppliers to move manufacturing overseas or face losing access to one of their major sources of sales. It wasn't "the Market" that decided, where people wouldn't buy a product due to its price, it was a condition Walmart imposed as gatekeeper to a substantial part of the market.

[Freddie]

4. ^^this^^

Back on the day a person could open a small business (restaurant, store) and not get rich but could support a family. Now it's impossible to compete with chains. Add to that the decline of unions and manufacturing gone to China. Really the only "middle class" jobs left are the ones Repugs are itching to destroy--teachers, police, etc.

[meti57b]

13. I agree.

[Igel]

32. The chains are more productive.

That's just how it goes. Lower cost per unit of production, more units of production per hour because of streamlined and at least partially centralized production.

[Laurian]

5. Unrestrained greed at the top combined with strengthened efforts

to discourage and bust unions that have met no resistance from our elected representatives.

[QED]

6. Outsourcing jobs to start with

Oursourcing may have saved on labor costs but those savings were not passed on to the consumer. Where did they go? Exorbitant CEO salaries, golden parachutes, and shareholders while those who worked in manufacturing were forced to take lower wage service industry jobs.

[Populist_Prole]

15. Outsourcing is a bad deal for anybody the works for a living.

Outsourcing may have saved on labor costs but those savings were not passed on to the consumer

Even if the savings were passed on to the consumer ( damn I HATE the word! ) and not just to fatten corporate bottom lines, it still is a net loss no matter how cheap stuff is. The lower cost just solidifies the gains of the still employed, while those who lost their jobs had their livelihoods utter destroyed. They certainly won't be consuming very much. Bad deal.

[Skidmore]

7. The middle class bought the notion that the "American Dream" writ large was

"Lifetime of the Rich and Famous" and started engaging in conspicuous consumption like there was no tomorrow. It also started disregarding the fact that the middle class are workers too and tried to act like the CEOs instead organizing to retain its power. The middle class helped to cut itself off at the knees.

[1-Old-Man]

10. So are you maybe saying relaxing of consumer credit?

I sort of see the engaging in conspicuous consumption (with many thanks to Bernays) as going hand in hand with the rise in a debt dominated society. The only thing my father, a child of the Great Depression, ever bought on credit was his house, everything else was cash - and he did not trust banks as far as he could toss one.

[Skidmore]

14. That definitely contributed to the decline as did the

change in the psychological make up of the class. You can't function as a part of a working class when you believe that you've already arrived on Park Avenue or were to the manor born. Remember that prosperity gospel that started making its rounds about then? If you want someone's house you stand outside of it and pray and it will become yours. It was a bizarre shift in the national psyche I thought I'd never see.

[physioex]

8. "Free Trade"......

There is no such of course, but I am guessing starting in the early 80's manufacturing like steel began moving to cheaper markets and not only did they take advantage of the poor in those economies, but also the lack of environmental regulations. BTW As a side effect, the quality of every product we purchase today is pretty much bottom of the barrel. Thanks Wal-Mart.

[Populist_Prole]

12. Bingo

As soon as you decouple money spent on goods from those that make the goods, it represents a leak in the boat no amount of low prices can assuage.

[physioex]

20. Hehe...

You said, "assauge". I don't know what it is about the word that makes me crack up.

[hay rick]

60. It's an anagram of sausage.

Or maybe you just enjoy words that start with ass...

[meti57b]

17. I agree.

There is nothing to discourage shipping jobs overseas where they can be done cheaper.

[physioex]

21. I think those days are coming to an end esp. in China and India....

When they reach the Lewis Point, but hey there are plenty of countries in Africa to exploit.

[pampango]

59. Tend to agree about the Lewis Point being reached in China, less imminent in India but

it is coming there too.

Once that point is reached in China and India, Africa won't be a source of cheap labor for long. The total population of the whole African continent is less than either India or China alone. It won't take as long to reach the Lewis Point there, too, if the globe's capital all concentrates on that relatively small labor market.

[Igel]

33. Steel moved earlier.

Mid-70s, perhaps as early as '72 or '73 for low-grade stuff. It began a little earlier and led to increased productivity in US steel mills, but really hit the fan in perhaps '73.

Late '70s saw boutique steels blossom overseas while US infrastructure lagged behind. Germany and Japan got those markets. It was a question of batch size, turnaround time, and adherence to specfications.

I grew up in the rust plume of a very large Bethlehem steel plant. We could watch the glow from the slag they dumped in the Bay from my aunt's car port. There were traffic jams at shift changes when I started elementary school, more than 30k workers. The year I graduated from Sparrows Point HS there were fewer than 3k workers, and they were mostly at the L, the last gasp of that steel mill. An attempt to produce very fast, high-volume low grade steel at precisely the point when everybody wanted precision-crafted steel.

It's like building a huge Miller Highlife brewery in the Pacific NW just as the microbrew craze started. Stupid decision.

[Rex]

9. The Grand Old Party.

Vulture capitalism and a strongly established plutocracy that was not there prior to the 1980s.

[Trajan]

11. Conservative economic policy dictates

that workers receive extremely minimal wage increases during a good economy, and wage DECREASES during downturns ....

It's all about disrespecting labor as a source of value to the organization that reaps the benefits of labor's productivity ... The rich want their portion, and labor's portion too ...

Unionization used to balance the relationship, but unions have suffered greatly in the GOP/Third Way philosophy that has prevailed over the last three decades....

[4 t 4]

34. The root cause is greed

pure and simple greed!!GREED, GREED, GREED The powers that be, became the majority because most republicans were bought off by really big money-they sold out. Labor unions denied, Big box stores encouraged, stock price improvement for big box stores the more the little business is destroyed. The republicans took the big box stores side. The middle class did nothing wrong. It could have all continued but the powers that be got scared because the middle class was doing so well. They were growing and having babies and buying houses and things and that can't be allowed . The resources( natural and finite)are so thin and they can't let you thrive because what will their grandchildren have ? Like Boner you think he cares about YOUR KIDS _DO YOU ?? You all must dye and go away. Sorry I hate the phrase the powers that be but I don't know what else to call them- that really is who they are. They really are all bought, I believe including , so very-very sad to say Obama. I believe he has been threatened in many ways. Oh how crazy you say but in politics I hate to say but most times " the worst case scenario is probably the most likely"

[RainDog]

16. gradual removal of social safety net, unions, and taxes on the wealthy

The middle class came into existence b/c of the GI Bill and works project government programs.

The middle class began to decline when Reagan began to undermine unions and both parties chose to favor profits for stockholders over jobs for the middle class.

The decline was exacerbated by tax cuts for the wealthy so that public works, infrastructure, etc. have been ignored or "privatized."

[pampango]

61. Great list. Progressive countries have strong safety nets and unions and higher/more progressive

taxes. There are lots of countries in the world that do this. Unfortunately, the US is not one of them.

[Lex]

18. Cutting taxes on the wealthy, demonizing government services and unions.

For starters.

[KG]

19. thier voting GOP

[MannyGoldstein]

22. The rise of Third Way Democrats

Wolves in sheep's clothing. Sold us off to the highest bidder while most thought "hey, they're Democrats... they have our best interests at heart".

All of the things you mention happened when Third Way Democrats ceased to fight for the middle class.

And here we are.

[Egalitarian Thug]

63. I thought this guy wanted a discussion o a Sunday night.

Seems that this was not the case.

[Peregrine Took]

23. Ronald Reagan's election in 1980.

Everything that has happened that is bad in the last 30 years can be traced to that event.

[1-Old-Man]

26. It would not be possible for me to agree more with what you just said

Virtually every evil that we seen in Government today was ushered into place during the Reagan years. You can not immagine how much I despise the memory of that charlatan.

[4 t 4]

42. I couldn't agree more !!!!

he was the very start of the bad turn in America. He was a greedy,hollywood star with a very bad idea about life. He contributed largely to the mess we are in today but he had Nancy the only one who really loved him.His children could hardly stand him- he had no use for them . The right still quotes his name all the time "disgraceful" One of the things we need to do is take care of the disabled and misplaced and lonely so we can help and take care of all and not have major problems. He was the one who decided to throw them to the wolves! Boy did that work great Thanks Reagan for nothing!!!!!

[Brigid]

52. You beat me to it.

That was it, all right.

[1StrongBlackMan]

24. I kind of agree; but ...

would frame it that labor was denied participation in the PROFITS in the workplace. As you correctly indicate, the executives got a greater and greater share of the profits the productivity increases generated; but despite much of the productivity increases having come from labor's initiatives, labor's share of the profits didn't keep up.

[physioex]

25. I think "greed" is a bit simplistic....

That is not to say that that most CEOs aren't greedy bastards, but government policy of opening "free trade" played a bigger role.

[BanTheGOP]

27. Does one even have to ask?

Most poeple have migrated from the middle class to the lower middle class, and even lower, since the GOP has mandated its repressive policies. IT is the existance of the GOP itself that fosters such elitism, hatred of humanity and the planet, racism, sexism, and other exclusionary tactics in which the GOP must employ for it to exist. The ONLY solution, therefore, is to render the GOP impotent through voting, as we were able to prove in 2012 can be done, or more rapidly and assuredly through court action using RICO statutes. But the bottom line is this: If the GOP is eliminated, then the political course becomes more diverse, more spirited, and more inclusive of all people and cultures, and we in effect would have an all INCLUSIVE "class", not rich, not poor, but entirely progressive. Eliminate the current status of "capitalism" and we will bring in a new era of peace, prosperity, and justice for all individuals.

[ELI BOY 1950]

28. WARS !!!!

THEY WERE NOT EVEN IN THE BUDGET...at 10 Billion a month over say 10 years , thats a starting point.

[NeoConsSuck]

29. Capitalism trumps middle class in the USA

In the 1950's and 1960's, when most manufacturing was done in the USA, there was a strong middle class. And the labor movement was tolerated, because the capitalists still made money.

But today, capitalism is a dying economic system on a dying planet. Natural resources are becoming more scarce, our oceans are becoming polluted dead seas, and it becomes harder and harder for infinite growth on a finite planet. Wall Street only sees newer highs on artificial bubbles, the tech bubble, the housing bubble etc. But the bubbles burst, and Wall Street crashes. Capitalism is like a shark, it must always keep moving ahead or it drowns. Without infinite growth, capitalism dies.

Outsourcing is just a way for the rich to see infinite growth in their net worth. When that is played out, they still won't be satisfied, they never are. They will set their sights on the middle class, as they are doing now. They have just as much contempt for the middle class as they do the lower class.

In the future, I see America tossing out that old tired idea of one person, one vote. I wouldn't be surprised if democracy is tossed out altogether. The peasants (the 98%) should have no say in how capitalist governments govern. We're seeing the beginnings of this now in the most recent presidential election in Florida and in other states with their voter registration supressions, and long voting lines.

SS CPI is just the tip of the iceberg.

[jody]

30. Too many people! An economy can only support a given number of craft & trades members at any stage.

Craft & trades members are IMO the critical core of a "middle class".

When they decrease, that guarantees the relative decrease in society's middle class with whatever consequences.

[socialist_n_TN]

31. There was a graph on here that summed it up nicely......

And I'm sorry, but I don't remember who posted it, but it showed the decline in union MEMBERSHIP along with the decline in wealth for the lower classes. The declines matched EXACTLY.

That one graph summed it all up.

[zbdent]

35. Maybe not the "root cause", but sure as hell contributed to it ... the "death of the liberally-

biased media" started when you had a nightly bashing of Carter which eventually was renamed "Nightline" ...

[HughBeaumont]

36. From another post: August 3rd, 1981.

http://en.wikipedia.org/wiki/Professional_Air_Traffic_Controllers_Organization_(1968)

On August 3, 1981, the union declared a strike, seeking better working conditions, better pay and a 32-hour workweek. In addition, PATCO no longer wanted to be included within the civil service clauses that had haunted it for decades. In doing so, the union violated a law — 5 U.S.C. (Supp. III 1956) 118p. — that banned strikes by government unions. Ronald Reagan declared the PATCO strike a "peril to national safety" and ordered them back to work under the terms of the Taft-Hartley Act of 1947. Only 1,300 of the nearly 13,000 controllers returned to work. Subsequently, Reagan demanded those remaining on strike return to work within 48 hours, otherwise their jobs would be forfeited. At the same time, Transportation Secretary Drew Lewis organized for replacements and started contingency plans. By prioritizing and cutting flights severely, and even adopting methods of air traffic management that PATCO had previously lobbied for, the government was initially able to have 50% of flights available.

On August 5, following the PATCO workers' refusal to return to work, Reagan fired the 11,345 striking air traffic controllers who had ignored the order, and banned them from federal service for life. In the wake of the strike and mass firings, the FAA was faced with the task of hiring and training enough controllers to replace those that had been fired, a hard problem to fix as, at the time, it took three years in normal conditions to train a new controller. They were replaced initially with nonparticipating controllers, supervisors, staff personnel, some nonrated personnel, and in some cases by controllers transferred temporarily from other facilities. Some military controllers were also used until replacements could be trained. The FAA had initially claimed that staffing levels would be restored within two years; however, it would take closer to ten years before the overall staffing levels returned to normal. PATCO was decertified from its right to represent workers by the Federal Labor Relations Authority on October 22, 1981. The decision was appealed.

snip

Michael Moore said that Reagan's firing of the PATCO strikers was the beginning of "America's downward slide", and the end of comfortable union jobs, with a middle-class salary, raises, and pensions. Wages have remained stagnant for 30 years. Moore also blamed the AFL-CIO for telling their members to cross the PATCO picket lines.

President Reagan's director of the United States Office of Personnel Management at the time, Donald J. Devine, argued that "when the president said no...American business leaders were given a lesson in managerial leadership that they could not and did not ignore. Many private sector executives have told me that they were able to cut the fat from their organizations and adopt more competitive work practices because of what the government did in those days. I would not be surprised if these unseen effects of this private sector shakeout under the inspiration of the president were as profound in influencing the recovery that occurred as the formal economic and fiscal programs."

Reagone's economic team stopped progress DEAD in it's tracks.

[indepat]

39. And the gipper did all this without the industry missing a beat or

public safety being compromised. The gipper taught 'em a lesson just like the one he later taught Grenada, proving he was indeed one swell even-handed fella.

[99Forever]

37. Greed.

[kelliekat44]

55. Bingo!!!! nt

[madfloridian]

40. I have a couple of ideas why the middle class is not as strong.

Both involve conscious decisions made by the Democratic party think tank, DLC, which had too much influence on the party.

A couple of quotes from Simon Rosenberg, one of the founders of the DLC paint a pretty clear picture.

On the reason they founded the think tank called the Democratic Leadership Council:

"freed... from positions making it difficult for us to win. "...Simon Rosenberg.

"Simon Rosenberg, the former field director for the DLC who directs the New Democrat Network, a spin-off political action committee, says, "We're trying to raise money to help them lessen their reliance on traditional interest groups in the Democratic Party. In that way," he adds, "they are ideologically freed, frankly, from taking positions that make it difficult for Democrats to win."

And another quote just after we lost the 2004 presidential election.

The clash will be between the "governing class" and the "activist class."

From an article called "What Happens to the Losing Team".

If there's a battle for the soul of the Democratic Party, predicts Simon Rosenberg, president of the New Democrat Network, a moderate advocacy group, it won't be the usual skirmish between the liberals and moderates of the professional political class in Washington but one between the Washington insiders on one side and the rank-and-file activists spread out across the country on the other. "What's changed over the past two years is that activist Democrats believe that Republicans are venal people," says Rosenberg. These activists "are going to be very intolerant of Democrats in Washington who cooperate with the Republicans. There's going to be tremendous pressure to stand up and fight and not roll over and play dead."

From the NYT Matt Bai in 2005:

Nothing better illustrated the passing of the party's long
ideological debate better than the explosive presidential campaign of Howard
Dean (now the party's chairman), whose record as a pro-gun, pro-Democratic
Leadership Council governor did nothing to prevent him from seamlessly
assuming the role of chief spokesman for those liberal voters who had always
embodied the so-called Democratic left.

What Dean's candidacy brought into the open, however, was another kind of
growing and powerful tension in Democratic politics that had little to do
with ideology. Activists often describe this divide as being between
"insiders" and "outsiders," but the best description I've heard came from
Simon Rosenberg, a Democratic operative who runs the advocacy group N.D.N.
(formerly New Democrat Network), which sprang from Clintonian centrism of
the early 1990's. As Rosenberg explained it, the party is currently riven
between its "governing class" and its "activist class." The former includes
the establishment types who populate Washington - politicians, interest
groups, consultants and policy makers. The second comprises "Net roots"
Democrats on the local level; that is, grass-roots Democrats, many of whom
were inspired by Dean and who connect to politics primarily online, through
blogs or Web-based activist groups like MoveOn.org. The argument between the
camps isn't about policy so much as about tactics, and a lot of Democrats in
Washington don't even seem to know it's happening.

The party that should have been standing for the grassroots failed to do so.

[The Second Stone]

41. Ronald F. Reagan is the responsible for the destruction of the middle class

The F stands for Fascism, the love and embrace of corporatism and jingoism ahead of the interests of people.

[Egalitarian Thug]

43. The American people chose to withdraw into a fantasy world. When this happened is debatable,

but I think it is safe to say that the point of critical mass was 1980.

IMO, is the quantum acceleration of technology. Our society is built around and stuck in the industrial model of the 19th century. Life on the clock, if you will.

We changed everything during that period to accommodate the new way. We shifted from a societal model based on the time of year and agricultural seasons to a 24/7/365 assembly line model. Things got really horrible until enough people said. "Enough!" and fought back.

Today we live in another world that, once again, effects everybody but we have yet to accept and deal with this new paradigm. The fact is that we no longer need everybody working 40 hours a week, 50 weeks a year to produce enough, but our economics and basic mindset is still based on that model, the model we shifted to over a century ago.

We could easily maintain our civilization with most people working half that many hours, but our economic system is still based on the old 40 hour, 50 week model that we won so long ago. And just as has happened every time before, the people on top are the biggest obstacle to the rest of us adapting to the new way and realizing a better life for the greatest number.

[mythology]

44. I trace it to the fact that business interests are better able to sustain pushes

than other interest groups. What I mean by that is it's easy to gin up public support for a policy at a particular point in time, but it's hard to sustain that. Especially with the growth of centralized power in Washington in the 20th century. If you're sending a lobbyist, having the most money helps. And so we have gotten more and more new laws that favor business and/or the very highest of the high earners.

Paul Pierson and Jacob Hacker make this point very well in their recent book Winner Take All Politics.

[Cal Carpenter]

45. Capitalism

Plain and simple.

Tendency toward monopoly and concentration of wealth and power will always trump any efforts to regulate such.

Capitalism means that more and more profits are skimmed off the value of the workers' labor. It requires constant growth, and where else is the profit going to come from at this point?

Capitalism does not allow for a lasting, thriving middle class.

I won't even get into why and how the term 'middle class' requires that there is always a lower or underclass...but that's capitalism too...

[JaneyVee]

47. Automation & the purposeful destruction of Unionism.

[WCGreen]

48. Lowering the tax rates on Capital Gains....

[nolabear]

49. Corporations unwilling to pay employees enough to afford their products.

They just outsource labor and keep the US wage down while keeping profits high. In a word, greed.

Simplistic but true.

[Yo_Mama]

50. Trade deficit

When we are buying more foreign goods than we are selling each year, it is a slow weakening of the economy.

Each year that's money and investment that is siphoned out of the US economy.
http://research.stlouisfed.org/fred2/series/BOPBCA?cid=125


With the trade deficit we export the jobs that created the middle class, and we create a labor surplus that drives down wages.

[frostfern]

54. This...

I blame the economics profession and it's naive unfettered embrace of "globalization". Seems they were all a bunch of accidental shills for multinational corporate interests. Even Paul Krugman was preaching the "free trade is good for all" bullshit in the 90's.

[Yo_Mama]

66. Yep, economists have f__ked the country

Economists also pushed the ridiculous mortgages. As a profession, economists have racked up a towering record of profound failure over the last 15 years.

Right up through the Fed. And they are still at it.

Economists know how to blow a bubble, but they don't know how to fix it.

In the end, the circle will complete and countries like China and India will find themselves in dire fiscal straits. India is already almost there. When the net consumption capacity of the entire world starts dropping (oh, gee, isn't that called a global depression?) then everyone gets hurt - but the next exporting countries get hurt the worst.

In the 1930s, it was the US. The GD was much worse here than in Europe, for example. This time, it's the developing countries that get the worst of it.

[Pretzel_Warrior]

51. Ownership class. No need for strong labor after 50's soooo

Off with their heads. Americans have been falling behind since the 60's.

[JDPriestly]

53. I agree. That and too many imports and too much outsourcing.

We need to impose tariffs on imported goods and services.

[Budgies Revenge]

56. Corporate personhood. nt

[Drew Richards]

57. DEREGULATION

[krawhitham]

58. NAFTA

[Kingwithnothrone]

62. Capitalism

The fiscal austerity gibberish spewing from American Dream Incorporated and the rest of the "austerity and shared sacrifice for all" flimflam artists makes most people puke.There is nothing whatsoever "compromising" or "pragmatic" about these bloodsucking, parasite politicians and their main stream media minions holding court over the dead corpses of the working class,the poor,the disabled and the elderly in this country.

The elites with the help of our elected "political saviors" have stolen the people's labor for a song,their lives for a promise of an illusion,and now they will plunder the people's retirement and squeeze the last shred of dignity that many might have left while they feast off the spoils like the bloated pigs they are.

There is no more room for the "compromise" and "pragmatic" garbage spewing from the wannabe elitist followers of this "two party" political illusion if there are to be any solutions to stop the destruction.We live in a society where far too many boiled from birth "middle class" gentrified "pragmatists" and true believers who earn a few hundred grand a year think they are immune from the future ravages of this Capitalist sink hole.Capitalism is the Great Fucking Moloch.It demands more and more sacrifices at the alter of profits.

If these people keep insisting that a system that glorifies the pestilence of profits before people,wars for empire,and the inevitable destruction of the working class and poor is the only way forward, then they better figure out who's gonna pay to bury the millions dead from the "shared sacrifice"...or maybe the survivors can just bulldoze the bodies into the sinkhole and chant USA USA USA while the "pragmatists" and "adult conversationalists" ponder their future prosperity and rightful place in the "American Dream".



“I am opposing a social order in which it is possible for one man who does absolutely nothing that is useful to amass a fortune of hundreds of millions of dollars, while millions of men and women who work all the days of their lives secure barely enough for a wretched existence.” - Eugene Debs


Happy Fucking New Year To Capitalism

[raouldukelives]

64. Wall St and the steady deregulation of it. nt

[moondust]

65. All of the above.

Unbridled greed took off and became acceptable in the amoral 80s and government did little or nothing to discourage it, in some cases making it worse.