Is America's Middle Class Dying Out?
While corporate profits and poverty are trending upward, stagnant unemployment remains a national paranoia. Since the election season, long-term economic problems have been largely glossed over as the media's cameras have pushed onto more transient, profitable stories. As a note, bipartisan failure hardly counts as "news." While it seemed candidates were in a competition of who could talk "rebuilding the middle class," the issue of the dissolution of the middle class persists forcefully.
The evidence supporting the continued demise of the middle class is clear: wealth and power centralize in the hands of a few; with no sign this trend will stop any time soon. The Dow just hit a record high, but still millions are out of work.
Stockholders' celebration can be attributed to the growing benefits of globalization; rampant economic growth in India and China translate to profits for multinational corporations. Robert E. Moritz, chairman at PricewaterhouseCoopers, recently commented, "right now, CEOs are saying, 'I don't really need to hire because of the productivity gains of the last few years.'" Corporate earnings have surged at a rate 20.1% per year since 2008, but still 85% of middle class Americans think its tougher to keep up their lifestyle than it was 10 years ago — according to a Pew survey. The populous has spoken, why is nobody listening?
The numbers are ugly. From 1983-2010 the number of households with less than $10,000 in total assets rose from 29.7% to 37.1%. This figure includes Americans with negative assets, or debt. But we're not done yet. According to Forbes, over half of Americans are at least partially financially dependent on government support. This staggering note is sure to inflame the passions of libertarian ideology, but nonetheless constitutes a key component of reality. However, reliance on the state does lend itself toward a growing trend: the fairy tale of the "American Dream" is unfortunately just that — a fairy tale. Living off Uncle Sam's dime emphasizes the desperate situation so many Americans find themselves in.
Dependence on the government could be blamed on the people, that simply too many Americans lack the go-getter approach. But this type of Mitt Romney elitism is not considerate of the ethical mindset that must be taken in public policy. It is more likely however that increased financial pressure is the cause of such state dependence in the first place. Therefore, it is the government's failure to provide adequate structural framework that has led to an increased inability to make it by oneself. Anecdotal evidence of picking oneself up by the bootstrap is again a tired line that is simply invalidated by economic realities. Those stories simply do not correlate to the actualities of middle class America.
Those privileged enough to analyze this subclass of American society may utilize self-reliance as a psychological safeguard. The phrase "no, my success is entirely my own" scientists know of as a phenomena called the self-confirmation bias. The fact remains that morally arbitrary factors such as: the family you were born into, geographic location, how much money your parents made, to what degree you parents instilled values in you, etc. have a significant impact on where you will end up in society. You cannot take credit for having been lucky enough to be born into a family that taught you hard work is important. Unfortunately, the notion that everyone who’s considered financially successful got there solely on his or her own merit is flawed. This must be carefully considered when sparking a dialogue about class structure.
The arbitrary odds that contribute to the success of one also possess a converse effect: purely from chance many are born into families where education and values have no role, the environment is unsafe, the parents are just terrible parents, etc. Individuals who are born into such circumstances through no fault of their own are immediately disadvantaged from the moment they are born.
The attention paid to the inequality in America is frequently accompanied by a sense of "the other." The heart of America is dissolving, but at least it's not us. This perception is reflected in recent research from Michael Norton at Harvard Business School and Dan Ariely from Duke. The second bar that 92% of Americans chose as "ideal" is in fact much akin to wealth distribution in socialist Sweden. The actual distribution of wealth is interestingly not at all what a survey of 5,000 Americans desire.
In sum, America finds itself in a unique position that it does not fully realize its own demise. For the movers and shakers, middle class despair is nothing new but only continues the trend that has resulted over the last three decades. The reason nobody's still crying out for the middle class is because there's no image left that can be easily pinpointed as "middle class." Keep watching the Dow, however, as this economic indicator shows no signs of sputtering. The fall of the middle class is not merely a shift of economic reality, but perceptual reality. As long as this disillusion is maintained, wealth and power will continue to centralize in the hands of a few. They're sitting on the veranda sipping on mint juleps, profiting on your "knowledge" that they are not there.