Something’s gone wrong with America. Most of us feel it but can’t put our finger on the problem.
The canary-in-the-coal-mine warning is the collapse of trust in our institutions. The percentage of Americans who lack deep, abiding trust in institutions — the kind that gets you through dark nights of the soul — as of June 2013 was as follows: in the Congress, 95 percent; in big business and newspapers, 91 percent; in banks and the criminal-justice system, 90 percent; in television news, 89 percent; in the Supreme Court, 87 percent; in public schools, 86 percent; in the presidency, 81 percent; in organized religion, 75 percent.
As trust in politicians has declined, they’ve spent ever more dollars per vote to get elected. The cost of a presidential election was $1.4 billion in 2000 and $2.6 billion in 2012. Congressional races overall cost $1.6 billion in 2000 and $3.7 billion in 2012.
Americans are not happy. Only 33 percent report themselves as being happy. The average global rate for confidence in the future is 89 percent of people surveyed. In the United States, only 67 percent are optimistic about their futures.
Confidence in our res publica is on the wane because our middle class has been in decline. This problem is so big and so dangerous that all of us need to come together in agreement that the problem is real and needs to be addressed by leaders of all factions.
America, uniquely, has always been a middle-class country — no aristocracy, no peasantry, and later, under industrialization, to the great frustration of Marxists, no proletariat. Americans were always of the middling social orders. This was the thesis of Harvard Prof. Louis Hartz as he explained in the middle of the last century why we had always had centrist politics.
The Puritans of New England and the Quakers of Pennsylvania came from the rising middle class and early capitalists of England, Scotland and Wales. The more socially exclusive Cavaliers, who led the founding of Virginia, Georgia and the Carolinas, were not aristocrats in English terms but merely squires. Succeeding waves of immigrants — even down to today’s Vietnamese and Hispanics — have been thoroughly middle-class in their aspirations.
The importance of a robust middle class is primarily political. Middle classes are the foundation for constitutionalism and justice under the rule of law. Historians of government and politics, and especially Marxists, all agree that democratic institutions rise up when there is a social tipping point toward middle-class cultural influence and lifestyles.
The American Civil War was fought by a middle-class industrialized North against a Southern gentry aping aristocratic lifestyles and ruling an enslaved peasantry. The North was democratic; the South was really not.
The left’s dismissive label for our kind of society is “bourgeois.” But liberty and democracy root in bourgeois cultures, not in aristocratic or peasant/proletarian ones. Those social orders produce authoritarian regimes from absolute monarchs to revolutionary dictators like Lenin and Mao.
Today’s collapse of social order in Egypt, after the hopes of the Arab Spring, is occurring in a society that has a weak middle class. The future of liberalizing political reform in China will be written in the coming decades, if at all, by its rising middle class.
If rising middle classes succor functioning constitutional democracies, then the collapse of middle classes will undermine democracy.
In recent decades, changing economic realities have reduced the size and hopes of America’s middle class.
Americans living in middle-class neighborhoods in the 117 largest metropolitan areas have declined in numbers. In 1970, they comprised 65 percent of the population; now, it’s 44 percent. Over those 43 years, Americans living in the poor neighborhoods grew from 15 percent of residents to 30 percent, while Americans living in the rich neighborhoods (increasingly exurbs) grew from 7 percent to 14 percent.
Thus our socioeconomic profile has bifurcated — the extremes have grown at the expense of the middle.
In 1980, the top 10 percent of Americans took home a third of national income. In 2011, they gathered in 48.2 percent of income. The top 1 percent of Americans took in 10 percent of national income in 1980 and 20 percent in 2011. Since the end of the Great Recession in 2009, the top 1 percent of Americans have taken in 95 percent of all income gains.
Meanwhile, fewer Americans are working. In June, only 42 percent of Americans had a full-time job, and only 58.7 percent of the civilian adult population was working.
In 2007, there were 121.7 million full-time jobs and 24.8 million part-time jobs. Today, there are 117.7 million full-time jobs and 24.4 million part-time jobs. Over the last six months, 97 percent of net job creation was for part-time work.
Wages for males who work full time have stagnated in real terms since 1973. In 1975, the average hourly wage in manufacturing was $20 (expressed in today’s dollars); last year, the figure was only $18.50.
A “bad” job has been defined as one making under $37,000 per year in 2010 dollars. In 1979, 18 percent of working Americans had such “bad” jobs. In 2010, 24 percent did.
Jobs with median hourly wages of less than $14 provided 60 percent of all job growth between 2008 and 2010.
Today, only 58 percent of national income is paid out in wages. The average since World War II has been 63 percent. The difference costs each worker about $5,000 a year.
The top 10 percent of Americans owns 80 percent of all financial assets. After the Great Recession, median household wealth dropped 36.1 percent, while net wealth for the top 1 percent dropped only 11.1 percent.
The contributions of middle classes to social health and political justice come through their actions, which reflect values, beliefs and cultural dispositions inculcated in families.
The increasing chasm between wealthy and poor has only made it harder for those born in low-income families to rise above their parents’ position. Average wealth for Americans in their mid-30s today has dropped 21 percent compared with their parents, as their debt from education and lifestyles has increased.
Most children (88 percent) in high-income homes grow up with married parents today. The children of these well-to-do families are far more likely to get college degrees than are children of similar parents in the past. They are also far more likely to marry economic peers and benefit from significant dual incomes.
In 1970, some 12 percent of college graduates came from homes in the lowest 20 percent of income. Today, only 7 percent of college graduates do so. The educational avenue out of lower-class origins has become a narrower lane.
Among Americans with no high school diploma, 35 percent have no job.
The loss of the middle class threatens the loss of stereotypical middle-class families, and with them, traditional middle-class values. It is often said that, within any community, a change in only 27 percent of the population is needed to tip the society’s values and behaviors in a new direction.
Whatever one’s personal point of view on gender and marriage may be, sociologically the growing cultural legitimation of same-sex relationships and marriages has been the latest turn away from traditional middle-class family behaviors.
In 1960, 72 percent of Americans over 18 were married. Today, only 51 percent are. In 1960, the annual divorce rate was 9.2 per 1,000 persons; in 2009, it was 16.4.
In 1960, 57 percent of households contained children under 18; in 2009, only 46 percent of households did.
Some 35 percent of American children now live in single-parent homes. Among poor households, 71 percent lack married parents.
In 1965, 24 percent of black infants and 3.1 percent of white infants were born to single mothers. In 2007, 60 percent of birth mothers in their 20s were unmarried, accounting for the lives of most new, native-born Americans.
Behaviors based on middle-class values of prudence, the work ethic, and self-reliance have faded as well.
Men have been dropping out of the workforce: From 1950 to 1955, the employment-to-population ratio for men was 85 percent; in 2010, it had dropped to 64 percent.
Four in 10 American households with children under age 18 are now headed by a mother who is the sole or primary earner for her family. This share, the highest on record, has quadrupled since 1960.
SAT math scores are still at the 1972 level; reading scores have declined.
Among Americans age 26 to 40, 40 percent have at least one tattoo.
The American Medical Association has declared obesity a disease, afflicting nearly one in three Americans.
Other signs of new cultural impact behaviors are: a 400 percent increase in use of anti-depressant medications over the last 20 years; a 500 percent increase in the illegal use of prescription drugs since 1990; attention deficit disorders in children, now at 8.4 percent; autism spectrum disorders now over 11.3 persons per 1,000, up from 6.7 persons in 2000; eating disorders that affect 8 million Americans, and binge drinking reported by 18 percent of Americans (30 percent report some alcohol disorder in their life).
The risk to our collective future comes from the deterioration of values and behaviors. The decline of the middle class has coincided with the decline of civility in our politics through the rise of ideology and uncompromising gridlock.
Such a devolution in behaviors and expectations caused the collapse of the Roman Republic under first Julius and then Augustus Caesar. In 59 B.C., Cicero — of middle-class origins — pointed out the reason for Rome’s slide towards dictatorship in a letter to his friend Atticus as: “virtutem adligatam”— our virtue is in chains.
In our economy, the loss of the work ethic adds to the ranks of those who expect entitlements from the state, to be paid for out of taxes taken from a slow-growing private sector. Higher taxes will be opposed by the growing upper class, and the clash will continue to further polarize our political culture. There is no social equilibrium possible in that direction.
Without a middle class, our society will have no cultural ballast to steady our government against the passions of clashing factions.
In my judgment, there are several causes of this systemic change in our society:
One is globalization, as lower-cost economies became part of a global trading system thanks to the container box and large cargo airplanes. It suddenly made sense to transfer manufacturing overseas. But then we did not follow the German and Japanese examples of growing our manufacturing capability into value-added niche products to sustain factory employment.
Second, postindustrialization used new technologies to reduce the labor component of many tasks. This had the secondary effect of adding educational requirements to many jobs, which discriminated against those with lower skills.
A third cause was the growth of financial services as an industry extracting rent from the productive economy.
A fourth cause was the invention of new consumer credit mechanisms. Debt replaced savings as a source of funds for many Americans.
A fifth cause was the cost imposed on economic activity by higher taxes and regulations. No matter how well-intended, taxes and regulations have a depressing effect on the economic activity that sustains a middle class.
The rich have their investments. The poor have their government transfer payments. The middle class needs jobs.
Rebuilding our middle class demands a coalition of all Americans. Raising taxes will not bring back the middle class. Cutting government will not bring back the middle class. The cherished ideologies of the left and the right are not relevant to reversing our national decline.
They only speak to the conflicting interests of the rich and the poor — not to the crisis of the middle.
Stephen B. Young, of St. Paul, is the former chief of the Village Government Office, Military Assistance Command, South Vietnam. He is global executive director of the Caux Round Table, an international network of business leaders working to promote a moral capitalism.