By now most people are aware of the long term rise in the level of economic inequality. However, the main focus of the discussion has been on the greedy 1% at the top and how unfair it is for them to have so much money. What I want to focus on here is the changing realities for the 80% of the population at the bottom. This is the picture of the household income trend over the past 40 years.
The starting point of this graph is at the end of the post war period of general prosperity and government policies that set limits on the spread of income levels. One thing that is striking about it is how steady and inexorable the trend has been. There are a few minor blips that mark recessions, but there has been no real change in the growing disparity. It makes no difference which party was in power and who was president. This is not a temporary trend that is somehow going to just get fixed if we vote for the right people.
It is also important to look at accumulated wealth and not just annual income.
We see a picture which is consistent with the income pattern. 90% of the wealth is concentrated in 20 % of the population. Now go back and look at the income graph. That data is not adjusted for inflation. That makes the gaps between the 4 lower quintiles look larger, but when it is adjusted for inflation, income for those groups has remained stagnant. It is only the top quintile that has seen economic growth and most of that has occurred for the top 5%.
So what is the realistic view of the relationship of those 80% of the population who are clustered at the bottom. Political leaders and the media are prone to imply that all of these people are somehow middle class. Nobody wants to talk about a working class or the poor. Well, it is logically impossible to have a middle without a bottom. Does the term middle class really have any meaning in 21st C America?
There are various ways to look at the notion of class. It is most certainly a social construct and not a natural reality. Economic relationships are the most frequently used approach to describe class. However there are other considerations that go into the formation of a class identity. Educational and occupational status are another approach. Personal characteristics such as speech, dress and manners also play a role. For a society that has at times claimed to be a classless society, Americans have always been obsessed with status and its symbols.
A sizable middle class was a creation of the industrial revolution. It herded a majority of the population into cities and created a large number of jobs for blue collar industrial labor and a smaller number of jobs for white collar office workers. It was not difficult to see these two groups of people as being in distinct social and economic spaces. Incomes for the white collar workers were more stable and secure and type of work they did required different skills and was less physically demanding and dangerous.
In the 1960s where the income graph begins the US job market was a fundamentally different situation than it is today. The manufacturing sector with its good paying union jobs had not yet begun to decline. There was a steady demand for college educated workers in white collar jobs. A college degree and a union card were both virtual guaranteed tickets to a decent job. However, there were very visible differences in the nature of those jobs. Not only has the overall job market become much tighter and more competitive, but the superficial appearance of the nature of work in a service economy has become less differentiated. People sitting in cubicles in office buildings sort of look like they are doing the same things. You have to look closer to see that some of them are low paid customer service workers talking to upset customers on the phone and others are performing more high status tasks. They all dress more or less in business casual.
There is a fundamental political attitude involved in taking on a personal identity of being middle class. It involves a belief that the system exist to support your interest and to take care of you. It is based on the notion of a solid middle class as the backbone of an industrial society. Commitment to that belief gives the middle class an incentive to support the established order. Many of its members may feel that that order is in need of course corrections, but they still believe that its collapse would leave them worse off without it.
Marxist theory drew a sharp distinction between bourgeois liberals and the proletariat. There was a fair amount of reality in the 19th C industrial society on which it was based to support a distinct division between these two groups and to see them as have incompatible interests. There is a plausible argument to be made that we are now moving into a post industrial society and that Marxism which was always better at criticism that it was at producing effective solutions become more and more disconnected from present realities.
There was a period when organized labor unions formed effective working class institutions in the US. They reached the peak of their power during the new deal when they gained control of the labor force in the manufacturing sector and became a major political force. They have been on the decline ever sense as a result of numerous factors. The majority of union membership is now based in government jobs with mostly white collar workers. This does not fit the classic image of an organized proletariat.
The point I am trying to get to with this admittedly superficial summary is how much American society has changed in terms of class relationships over the past 40 years. We all understand that there is a huge gap between the top 20% and everybody else. The question is what are the relationships among the people who make up that 80%. Can those 4 quintiles be meaningfully split into different class groups? I think not.
We really can't all be middle class if we want to deny the existence of a lower class. However it is possible it is possible to see a society as being divided between an upper class elite and everybody else. Now a very effective tool for that elite to maintain their privilege and control is to find ways to set off conflict and competition between various groups within the mass at the bottom. Race and nationality have often served that purpose well.
This is not really a revolutionary call to the barricades because I don't have any clear notion of where things go from here. I am pretty sure that the clock is not going to move backwards. One thing I am sure about is that Americans are holding onto a belief about the system serving the needs and interests of all the people that really doesn't hold up very well in the light of reality.