Issue #73
Last Update May 10, 2013
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Finance What Middle Class? by David Katz October 31, 2010 Modern American politics is all about paying homage to the American middle class, while doing nothing to help them. By framing the issues in terms of the middle class, the real problems and solutions are obfuscated. Just what is the middle class, anyway? We used to have four classes in this country: the rich and powerful, which in other countries would have been a hereditary aristocracy; the middle class, which was composed of shopkeepers, merchants, government officials and professionals; the working class, which included farmers, factory workers, laborers (both private and public) and artisans; and the lower class, which contained the unemployed and the indigent. Class was defined by function, not money – a factory worker that had made and saved a decent amount of money, owned his own home and had no debt was nevertheless working class. A merchant with a failing business was nevertheless middle class, as were poor churchmen. This all changed in the middle of the 20th Century.
Thanks to prosperity, unions and a desire to keep the working class from embracing socialism, the boom times of the mid-20th Century were shared with the workers. People on the assembly lines and in the mines, as well as clerical workers and lower management, now were middle income people, even if their jobs did not match up with the traditional definition of the middle class. Home ownership was encouraged (and made possible by low-cost construction in the suburbs), higher education for the children of workers was promoted, and white collar jobs were promoted as being more desirable and more prestigious that blue collar jobs. The role of middle income people as consumers, rather than as producers, was highlighted.
The attacks on worker prosperity had never really ended, however. Those at the top, who wanted a larger share for themselves, attacked unionization at every turn. Starting with “Right to Work” laws and the flight of businesses to the non-union South, and culminating in Ronald Reagan's successful breaking of the Air Controller's union and others (and unconsciously abetted by union corruption and overreaching, which turned public opinion against them), union power was diminished. To obfuscate the divide between workers and (especially senior) management, the concept of the middle class was broadened, allowing the fantasy to propagate that the middle income person, tenuously hanging on to the prosperity gained in the 40s, 50s and 60s, had nothing to do with with the needs and struggles of the working class. The Reagan, Clinton and George W. Bush years exacerbated this disconnect, by convincing people that they were overtaxed when in fact federal tax rates were at their lowest point since WWII, and previous tax cuts (especially under Reagan) and the subsequent substantial reduction in federal aid to the states, resulting in a rise in property, sales and state income taxes, had shifted the tax burden from the wealthiest to the middle income taxpayer.
The result has been the creation of the largest income gap between the top and bottom of our populace, with the middle shrinking and bleeding into the bottom. As long as average voters retain the fantasy of being middle class instead of working class, they will continue to vote against their own economic interest. Words have power; in this case, the power to confuse. To find a solution to our problems, the right words must be found again.
New York Stringer is published by NYStringer.com. For all communications, contact David Katz, Editor and Publisher, at david@nystringer.com