Thursday, August 11, 2011
Can the Middle Class Be Saved?
article from the Atlantic. Highlights:
"from May 2009 to May 2011, daily consumer spending rose by 16 percent among Americans earning more than $90,000 a year; among all other Americans, spending was completely flat."
"...studied how several recent financial crises affected income distribution—and found that in their wake, the rich have usually strengthened their economic position."
"Middle-paying jobs in the U.S., in which some workers have been overpaid relative to the cost of labor overseas or technological substitution, 'are being wiped out. And what will be left is a hard and a pure market,' with the many paid less than before, and the few paid even better — a plutonomy strengthened in the crucible of the post-crash years."
"Since 1993, more than half of the nation’s income growth has been captured by the top 1 percent of earners, and the gains have grown larger over time: from 2002 to 2007, out of every three dollars of national income growth, the top 1 percent of earners captured two."
"College graduates may be losing some of their luster for reasons beyond technology and trade. As more Americans have gone to college, Autor notes, the quality of college education has become arguably more inconsistent, and the signaling value of a degree from a nonselective school has perhaps diminished. Whatever the causes, “a college degree is not the kind of protection against job loss or wage loss that it used to be...Without doubt, it is vastly better to have a college degree than to lack one. Indeed, on a relative basis, the return on a four-year degree is near its historic high. But that’s largely because the prospects facing people without a college degree have been flat or falling."
"As recently as 2001, U.S. manufacturing still employed about as many people as did health and educational services combined (roughly 16 million). But since then, those latter, female-dominated sectors have added about 4 million jobs, while manufacturing has lost about the same number. Men made no inroads into health care or education during the aughts; in 2009, they held only about one in four jobs in those rising sectors, just as they had at the beginning of the decade."
"A thinner middle class, in itself, means fewer stepping stones available to people born into low-income families. If the economic and cultural trends under way continue unabated, class mobility will likely decrease in the future, and class divides may eventually grow beyond our ability to bridge them."
"...in fact, career-academy students go on to earn a postsecondary credential at the same rate as other high-school students...One recent major study showed that on average, men who attended career academies were earning significantly more than those who attended regular high schools, both four and eight years after graduation. They were also 33 percent more likely to be married and 36 percent less likely to be absentee fathers."
"One of the largest challenges that Americans will face in the coming years will be doing what we can to make the jobs that have traditionally been near the bottom of the economy better, more secure, and more fulfilling — in other words, more like middle-class jobs."
"Bad jobs at rock-bottom wages are a primary reason why so many people at the lower end of the economy drift in and out of work, and this job instability in turn creates highly toxic social and family problems."
"A continued push for better schooling, the creation of clearer paths into careers for people who don’t immediately go to college, and stronger support for low-wage workers—together, these measures can help mitigate the economic cleavage of U.S. society, strengthening the middle."
"The top income-tax rate was 91 percent in 1960, 70 percent in 1980, 50 percent in 1986, and 39.6 percent in 2000, and is now 35 percent."
"...in a neat and perhaps unconscious two-step, many elites have pushed policies that benefit them, by touting theoretical gains to society—then ruled out measures that would distribute those gains widely."
"The post-war decades of the 20th century were unusually hospitable to the American middle class—the result of strong growth, rapid gains in education, progressive tax policy, limited free agency at work, a limited pool of competing workers overseas, and other supportive factors. Such serendipity is anomalous in American history, and unlikely to be repeated."