One of our readers raised several questions related to my last post:
- I get that the wealthy have done real well, but what about the middle-class?
- In the 80’s Republicans told us that wealth would “trickle down,” did it?
- If things are getting worse for the middle and working class, why do they keep voting for people who clearly work against their financial interest?
The Economic Policy Institute data tracking income and wage patterns show that the majority of income growth has for decades gone to a startlingly small number of top earners, while other workers have suffered a persistent stagnation or even decline in real earnings. While many middle-income families have lost jobs, homes, and retirement savings during the latest recession, their economic woes date back much further.
34.6% of all income growth over the past three decades has gone to the top one-tenth of 1% of all earners. By contrast, the bottom 90% of all earners has collectively seen only 15.9% of all income growth over the same period.
And it shows that this general wage stagnation has occurred even as the country has enjoyed large gains in productivity:
“The benefits of this growth have not accrued to the typical worker,” said Mishel, co-author of The State of Working America, during his recent Senate testimony. For the past 30 years, the real income of the middle class, adjusted for inflation has been stagnant, while the wealthy capture the lion’s share of our economy’s output.
The reader can discern from the two charts above that the major changes happened 30 years ago when corporations and the wealthy made their concerted effort to capture more of the pie, as discussed in my last post.
So why have the middle and working class allowed this to happen, or more precisely, why do they keep voting for people who pass laws that clearly work to reduce their financial well-being? The answer is best captured in the landmark book, “What’s the Matter with Kansas ,” by journalist and historian Thomas Frank.
Frank discusses how the corporations, their lobbyists and the wealthy, who want to push laws that benefit them – tax policy and deregulation – co-opted the social conservatives to form a powerful coalition. The economic conservatives promised the social conservatives that they would fix the laws on abortion, gay rights, school prayer and the like, if they supported them.
This conservative coalition is the dominant coalition in American politics, and that since the coalition formed in the late 1960s, it has been "fantastically rewarding" for the economic conservatives. The policies of the Republicans in power have been exclusively economic, but the coalition has caused the social conservatives to be worse off, due to these very economic policies and because the social issues that this faction pushes never go anywhere after the election. Abortion is never outlawed, school prayer never returns, gay rights increase in every cycle. The very capitalist system the economic conservatives strive to strengthen and deregulate promotes and commercially markets the perceived assault on traditional values.Ronald Reagan was the premier example of a politician who represented the interests of the wealthy while making all sorts of promises to the social conservatives. Once in office, he spent almost no time pushing a social agenda, focusing instead on cutting taxes and regulations. George Bush 1 and 2 followed the same pattern, as do most conservatives in Congress. The social conservatives continue to hold out hope for social change, while their chosen representatives spend the majority of their time redistributing their constituents’ wealth to Wall Street and the corporate executives, instead of fighting the culture wars through legislation.
So, thirty years later, the social conservatives, partnering with economic conservatives, have little to show in the way of wins on the social front, but they have lost tremendous ground economically, along with the rest of the middle and working class, experiencing massive debt, income stagnation, loss of homes and jobs, AND a lower life-expectancy than their wealthy neighbors. Well done!