The Death and Life of the Great American Middle Class

I don’t agree with Andrew Sullivan on the issue of public sector unions at all but at least this post is a good deal more measured than many of his recent efforts. It’s also revealing of a certain mindset that I think a lot of Americans share. I will try to explain how I see the situation. Here are the talking points you hear from the right, in no particular order:

1. The government is out of money, and we need to cut spending or future generations will suffer.
2. Austerity should be for everyone, not just private-sector workers.
3. We cannot raise taxes – even on the rich despite their inordinate wealth and not on corporations despite their extraordinary return to profitability during the jobless recovery.
4. Public-sector workers have unsustainable wages and benefits. They need to be brought in line with the rest of us by whatever means necessary.
5. Union-busting is just democracy in action. Protesting is ridiculous. The Republicans won, deal with it.
6. Passing health-care legislation is tyranny. Tea-party protests are democracy in action. Democrats won, but it’s our duty to obstruct them at every turn.

A protestor in Madison, WI

So this hodge-podge of talking points spins an oddly appealing yarn for many Americans. We must all pull together to sacrifice – but not by raising revenue or taxing those who can afford to be taxed, but rather by laying off public sector workers (since private-sector workers have already been laid off) and cutting back their benefits (since private-sector workers had to have their wages and benefits cut) and busting their unions (because that’s what we did to the private sector). The government is out of money, so we must all tighten our belts. Or, rather, those Americans who depend on public services must tighten their belts. The fabulously rich get a free lunch and are sent on their merry way, lugging along piles of cash and a much more productive workforce thanks to the ever-looming threat of double-digit unemployment.

Average Income Per Family

(chart via Mother Jones)

Meanwhile, as John Cole points out, the first wave of 401k retirees is facing a serious crisis. This should come as no surprise. But context is especially important. At the same time that we’re discovering that the 401k model is unsound, we’re also seeing a concerted effort to attack the last bastion not just of unionism in this country, but of pension-based retirement plans. And the even larger picture, if we zoom out a few hundred feet or so higher, is that this is an attack on the middle class and on the future of the middle class in America. Not just on the public sector, but on the entire middle class, private sector included (though those battles have largely already been fought, and the middle class has lost them one by one).

The truth is that the traditional middle class is simply less necessary to the flow of commerce in an economy dominated by a super-rich elite investor class. So policies that favor the middle class in America have slowly been weeded out in favor of policies which tilt toward investment banks and multi-national corporations. Consciously or not, these policies are designed to replace the middle class with a low-paid service class (which nevertheless has access to long lines of credit). This service class has very little political clout, and will have less and less as whatever good service jobs are outsourced or, in the public sector, stripped of collective bargaining rights (and then privatized and promptly outsourced).

The decline of unions has been a vicious cycle, as the Democratic party has slowly grown more and more dependent on the money and influence of big business rather than organized labor. As a result, the Democrats have become less relevant, a party built on social issues rather than middle-class economics. That’s fine up to a point, but it’s not enough.

So why does Wisconsin matter? Because this is a pivotal battle in that fight. What happens in Wisconsin could be a bellwether for things to come. If Walker wins, expect other like-minded governors to attempt the same thing, and many of them will likely win. If he loses, organized labor may have bought itself a bit more time. But the new class war will continue. Unless the public narrative can be recaptured from the Tea Party and the austerity now crowd we won’t see it end. Unless Democrats wake up to this threat, the party itself could be undone. And we’ll continue to read, over and over, sentences like this one:

At a time when private sector employment is stagnating and wages shrinking, public workers are not going to be able to defend ever-increasing wages and benefits for themselves.

Many of us will accept this unblinkly, never stopping to consider that maybe it’s all backwards, a convenient narrative, a sleight of hand used to turn the middle class against itself.

Perhaps somewhat surprisingly, reports all say that the Tea Partiers and union protestors got along well enough in Madison, the two sides mixing amicably. Things remained civil. Perhaps there was some underlying, unspoken realization that never quite bubbled up to the surface – some foggy sense that we are all in the same boat together, and that someone else is sending it toward the breakers. That the storm is rushing in from above, not below.

PS – I will have a long post up about my own political evolution soon. I realize my move to progressivism has surprised a number of people and perhaps even offended a few, and I will try to coherently explain how I’ve gone from there to here, and here to there.

A similar version of this post appeared at Balloon Juice. This has been edited slightly with additional links, graphs, etc.