As the divide between the haves and the have-nots continues to widen, there can be no doubt that those caught in the middle—the group of Americans collectively known as the middle class—have suffered greatly as a result of the economic downturn.
This week, AFP takes a hard look at who they are and what it would mean should the heart and soul of America be sacrificed for the benefit of globalism and the moneyed elite.
What is the Middle Class?
By Victor Thorn
With so many analysts and commentators proclaiming the death of America’s middle class, it’s worth asking the question: Who exactly makes up the middle class in 2012?
On May 3, this writer interviewed one of the most often-cited writers today, Michael Snyder of the popular website The Economic Collapse.
When queried as to how he’d define the middle class, Snyder said: “If you asked 10 different economists, you’d get 10 different answers. When growing up, my way of thinking was that somebody would be middle class if they were working to make payments on a home, had one or two vehicles and could afford the basic things of life.”
Snyder added: “Being middle class meant pursuing the American dream that arose after WWII from the 1950s to 1970s. During that era, people didn’t live in poverty, but they weren’t tremendously wealthy either. Most importantly, people were independent and not reliant on the government.”
However, as Snyder wrote in a Dec. 30, 2011 article, “Once upon a time, the United States had the largest and most vibrant middle class that the world had ever seen. Unfortunately, that is rapidly changing before our eyes.”
Snyder told AFP: “It’s different today. To live the American dream, a lot of people have to work two jobs. Plus, globalization has forced those in the U.S. to compete with workers all over the world, especially ones earning ‘slave labor’ wages.”
Outsourcing has proven to be a major factor in eroding the American middle class, as Snyder so adroitly conveyed.
“Big corporations setting up operations in the U.S. pay $15-20 an hour, plus benefits,” he said. “On the other side of the world, there are fewer regulations and benefits, in addition to no minimum wage or environmental concerns. If you only pay workers $1 an hour, all the rest is profit. Many huge corporations only care about the bottom line and don’t hold any personal feelings for employees, so they increasingly view workers as a liability. We need to face facts. Big business doesn’t have to hire U.S. workers anymore. The power structure has changed, and labor has been devalued. Therefore, incomes aren’t rising for middle-class families, and they’re being forced to move toward lower-wage jobs.”
If that weren’t bad enough, technology is making humans expendable, if not obsolete.
“Nothing can alter that reality,” Snyder stressed. “In the olden days, factories were labor intensive. But with robotics, computers and automation, the labor market is decreasing.”
It doesn’t stop there.
Snyder continued, “If an American company moves their factory or office overseas, Wall Street rewards them because stock prices shoot up. It’s a bad deal for American workers, particularly when U.S. politicians keep piling on more regulations, red tape, paperwork and taxes. U.S. workers are at a tremendous disadvantage. Unless we fundamentally change our policies, it will never again work out for the U.S. middle class.”
This symbiotic relationship between big government and big business has created a situation where both forces benefit, creating what is known today as the one percenters.
In addition, a strange phenomenon has occurred today wherein propagandists working for big business utilize a divide-and-conquer strategy among the left and the right that perpetually fuels partisan animosity.
Stated differently, whereas liberal Democrats mostly blame greedy Wall Street bankers for America’s problems, conservative Republicans point to bloated government and unions as the source of our woes. So, while Republicans and Democrats tear each other apart, the elite one-percent in Washington and New York City continue to get wealthier.
What the mainstream media refuses to illustrate is that both of these seemingly disparate factions work together. They’re on the same team. They belong to the same club.
It’s like the joke says: A corporate executive, a tea party member and a union worker are all sitting at a table when a plate with a dozen cookies arrives. Before anyone else can make a move, the CEO reaches out to rake in 11 of the cookies. When the other two look at him in surprise, the CEO locks eyes with the tea party member. “You better watch him,” the executive says with a nod toward the union worker. “He wants a piece of your cookie.”
Throw in politicians who are funded by Wall Street and big business, and it makes for even more trouble for Main Street America.
Snyder agrees: “Government and Wall Street feed off each other. Businesses make donations to politicians, who in turn write laws that benefit corporations. It’s a symbiotic relationship.”
Snyder said that our country, at its inception, frowned upon such government enablers.
“Our Founding Fathers were suspicious of anyone trying to concentrate power,” he said. “Not only did they place limits on central government, there were also strict limits on corporations. The biggest danger to the middle class today is any form of concentrated power. I don’t think it’s surprising that the three counties surrounding Washington, D.C. are the three wealthiest counties in America.”
Whereas Barack Obama symbolizes massive government and Mitt Romney symbolizes big business, neither one of them has any incentive to alter the status quo. Why should they? It benefits their supporters, who epitomize the one percent. In this regard, Obama socialists and Romney capitalists are more than content to let the middle class founder as long as they remain in the upper tier.
Or, as Snyder said: “There’s more wealth and power in the hands of a few. The only way to alleviate this situation and allow small businesses to thrive once again is to break up the size of both government and corporations.”
Middle Class in a State of Dependency
By Victor Thorn
When viewing our country’s decline, the repercussions are already being felt. In an April 16 article, Michael Snyder summed it up: “Millions upon millions of middle-class Americans have been systematically turned into government dependents.”
As it stands now, 47M Americans collect food stamps, a rise of 15M since 2009. With one in seven U.S. citizens now accepting food stamps, the number is even higher for children: an alarming one in four. Moreover, 49% of all Americans live in a household that receives some form of government benefit. In 1983, that figure was less than one-third.
With more people filing for disability under Social Security, not to mention unemployment benefits that sometimes extend three years, Snyder worries, “We’re training an entire generation to think that the government will take care of all their needs.”
Yet, when asked what America would look like without its extensive safety net, Snyder answered: “Much worse than the Great Depression. We’d see unbelievable despair and despondency.”
During the Clinton and Bush administrations, a cabal of bankers and politicians temporarily hid this pain by giving home loans and credit cards to anyone that could sign their name on the dotted line.
“The housing bubble was a big part of what happened to the middle class,” said Snyder. “Anyone breathing could get a home loan in those days, and as house prices kept increasing, people used their residences like ATM machines. But many of these individuals couldn’t afford the payments, and once the houses were foreclosed on, those people lost their #1 financial asset.”
Further weakening the middle class is what some have called a “man-cession.” The continuing economic downturn has affected men more severely than women, especially in the manufacturing sector.
“Blue-collar layoffs hit males the hardest,” Snyder said. “Now we have millions of men sitting at home watching TV, wondering why they can’t find a job. It’s soul crushing, especially if their wives are working. These men can’t feed the kids or pay their mortgage, so it eats away at their self-worth.
Snyder added: “In the 1950s, a man could get a job anytime he wanted. Today, only 65% of all working age males are employed. This brings in another level of instability, and it is further causing the American family to crumble.”
Young Americans See Daunting Future; Seniors Look to Keep What They Have
By Victor Thorn
Although it hasn’t been a pronounced aspect of the Occupy Wall Street movement, there exist definite hostilities between today’s youth and America’s aging population. This conflict hits right to the core of who will be America’s middle class in the future. As the American dream continues to slip away from the younger generation, will “ageism” become the rift that tears the nation apart at the seams?
According to a Nov. 28, 2011 article by economics writer Annalyn Censky, the average net worth of households led by someone 65 or older is 47 times larger than the median net worth of households led by someone 35 or younger.
“The young feel the system is failing them,” said Michael Snyder, who runs the widely read website The Economic Collapse, “and it creates a great deal of resentment when viewing higher unemployment figures among their ranks.”
Housing and education debt are two critical issues facing younger people today, but these are not the only pitfalls.
Snyder told AFP: “Credit card debt for the young is a very real problem, plus couples starting out are strapped with underwater homes or even foreclosures that have completely wiped them out. This age group has been hit disproportionately worse.”
The matter of Social Security must also be addressed. Snyder speaks for many in their 40s and younger: “I’m convinced I’ll never see a single penny of Social Security. I don’t believe it’ll be around in the future, or it’ll be so devalued as to be almost worthless. We’re paying tremendous amounts of money into this fund, with more and more of a burden placed on younger workers, but we may never get anything out of it in the end.”
Snyder cites our government’s irresponsibility: “Passing a $15T debt on to future generations is a horrible legacy.” And then there is the estimated $200T worth of unfunded future mandates that include Medicare, government pensions and other social safety nets.
“With a 105%-national-debt-to-GDP ratio, I see an economic collapse before we ever get to the point of paying out these unfunded mandates,” he said. “I’m talking about a global collapse that will require tremendous restructuring. When things blow up, it’s difficult to envision what will happen. We’re at a point of crisis.”
Will these factors compel youth, who have nothing to lose, to turn on the elderly, especially those who reaped the benefits of more successful times in U.S. history?
“If the world loses faith in the U.S. dollar as a reserve currency, we’ll collapse under the weight of our debt,” Snyder said. “To compensate, the government continues its policies of overspending and printing more money, with the result being massive inflation and a debt that swamps us.”
If Americans feel the middle class slipping away from them now, try to imagine how younger generations feel in terms of their inability to pursue the American dream.
Victor Thorn is a hard-hitting researcher, journalist and the author of over 30 books.