A Heartland Monitor poll last week showed that two-thirds of adults believe their children will enjoy less financial security than they do and face more challenges than opportunities. Last year the same pollsters found a slim majority defining getting ahead as simply “not falling behind.” This lack of confidence in the ability to get ahead is twinned with almost total despair that the political class has neither the means nor the will to reverse the trend.
A Pew poll this month showed that they believed the government policies since the recession had helped the rich, banks and corporations and done nothing for the poor, the middle class or small businesses. They are right to be skeptical.
With the budget battle and raising the debt limit looming, the narrative will once again be that the US’ deadlocked political culture is crippling its economy. It’s true that it certainly does not help. However, it has done far more damage when its components have worked together.
For the root causes of this decline are not difficult to fathom.
“One of the biggest drivers is deindustrialization,” said James Meadway, senior economist at the New Economics Foundation. “Manufacturing used to provide good-paying, secure jobs for skilled workers in the West, but much of that work has gone to emerging economies.”
Both parties supported the financial deregulation and international trade liberalization that laid the foundations for this despondency. Each blames the other for its consequences. Neither is capable of doing anything about it because the very monied interests that made this situation possible also make the politicians.
Little of this is unique to the US. The main countries within the EU, including the UK, are suffering from wage stagnation, creating a squeezed middle class. The retraction has not been taking place as long as it has in the US, but has been on the same trajectory for quite some time. However, there are two key differences. The Germans, British and French were not raised with a guiding myth that is being contradicted at the end of every month when families routinely find they can’t meet their expenses. Second, most European nations do have a welfare state (at least for now) that contends with the fallout. Those who look to the US as a trendsetter that maps our future should be careful what they wish for.
The self-proclaimed leader of the free world is turning into a low-wage economy with a class system more rigid than most and a middle class that wavers between poverty and precariousness. More than half the people using the food bank in Larimer County, Colorado, that I visited last year were working. More than one in four families in New York City’s homeless shelters includes at least one working adult. In the absence of a living wage and an ethical pay structure, the work ethic, on which the American dream is founded, does not work.