Aspects of Class in the United States: An Introduction
by John Bellamy Foster
In a speech delivered at New York University in 2004 Bill Moyers pointed out that,
Class war was declared a generation ago in a powerful paperback polemic by William Simon, who was soon to be Secretary of the Treasury. He called on the financial and business class, in effect, to take back the power and privileges they had lost in the depression and the new deal. They got the message, and soon they began a stealthy class war against the rest of the society and the principles of our democracy. They set out to trash the social contract, to cut their workforces and wages, to scour the globe in search of cheap labor, and to shred the social safety net that was supposed to protect people from hardships beyond their control. Business Week put it bluntly at the time
: “Some people will obviously have to do with less....it will be a bitter pill for many Americans to swallow the idea of doing with less so that big business can have more.”
The effects of this relentless offensive by the vested interests against the rest of the society are increasingly evident. In 2005 the New York Times and the Wall Street Journal each published a series of articles focusing on class in the United States. This rare open acknowledgement of the importance of class by the elite media can be attributed in part to rapid increases in income and wealth inequality in U.S. society over the last couple of decades—coupled with the dramatic effects of the Bush tax cuts that have primarily benefited the wealthy. But it also grew out of a host of new statistical studies that have demonstrated that intergenerational class mobility in the United States is far below what was previously supposed, and that the United States is a more class-bound society than its major Western European counterparts, with the exception of Britain. In the words of The Wall Street Journal (May 13, 2005):
Although Americans still think of their land as a place of exceptional opportunity—in contrast to class-bound Europe—the evidence suggests otherwise. And scholars have, over the past decade, come to see America as a less mobile society than they once believed. As recently as the later 1980s, economists argued that not much advantage passed from parent to child, perhaps as little as 20 percent. By that measure, a rich man’s grandchild would have barely any edge over a poor man’s grandchild....But over the last 10 years, better data and more number-crunching have led economists and sociologists to a new consensus: The escalators of mobility move much more slowly. A substantial body of research finds that at least 45 percent of parents’ advantage in income is passed along to their children, and perhaps as much as 60 percent. With the higher estimate, it’s not only how much money your parents have that matters—even your great-great grandfather’s wealth might give you a noticeable edge today.
As Paul Sweezy once observed, “self-reproduction is an essential characteristic of a class as distinct from a mere stratum.” What is clear from recent data is that the upper classes in the United States are extremely effective in reproducing themselves—to a degree that invites no obvious historical comparison in modern capitalist history. According to the New York Times (November 14, 2002), “Bhashkar Mazumber of the Federal Reserve Bank of Chicago...found that around 65 percent of the earnings advantage of fathers was transmitted to sons.” Tom Hertz, an economist at American University, states that “while few would deny that it is possible to start poor and end rich, the evidence suggests that this feat is more difficult to accomplish in the United States than in other high-income nations.”
The fact that the rich are getting both relatively and absolutely richer, and the poor are getting relatively (if not absolutely) poorer, in the United States today is abundantly clear to all—although the true extent of this trend defies the imagination. Over the years 1950 to 1970, for each additional dollar made by those in the bottom 90 percent of income earners, those in the top 0.01 percent received an additional $162. In contrast, from 1990 to 2002, for every added dollar made by those in the bottom 90 percent, those in the uppermost 0.01 percent (today around 14,000 households) made an additional $18,000.
Wealth is always far more unevenly divided than income. In 2001 the top 1 percent of wealth holders accounted for 33 percent of all net worth in the United States, twice the total net worth of the bottom 80 percent of the population. Measured in terms of financial wealth (which excludes equity in owner-occupied houses), the top 1 percent in 2001 owned more than four times as much as the bottom 80 percent of the population. Between 1983 and 2001, this same top 1 percent grabbed 28 percent of the rise in national income, 33 percent of the total gain in net worth, and 52 percent of the overall growth in financial worth.
More at http://www.monthlyreview.org/0706jbf.htm
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