Monday, June 3, 2013

The Hope & Change Obama-Era Middle Class Blues

The Atlantic has one of those "middle class wages are stagnant and people can't get ahead anymore" articles. What's unique about this one is that it is coming smack in the middle of the era of Hope & Change. Normally, these sorts of articles only run during Republican administrations: "I'm Working Really Hard, But I'm Not Getting Ahead.

Americans love to believe that anyone can get ahead, that they can build a better life than their parents had, simply by working hard enough. The evidence suggests, however, that this is less and less the case. Just working hard will no longer suffice, especially for Americans who haven't been born with wealth or particular talents. More and more, education has become the key to moving up--from poverty into the middle class, from the middle class into affluence--or to holding onto the middle-class lifestyle in which one was raised. 
There is also growing--though still nascent--evidence that from one American generation to the next, mobility is declining. It's getting harder, that is, to work your way into a higher income level than the one into which you were born. A son's adult income in the United States is about half dictated by how much his father made, a percentage that is nearly as high as in any country in wealth-by-birthright Europe, according to the Organization of Economic Cooperation and Development. In Europe, family connections and the circumstances of one's birth are considered crucial determinants of success, a consequence of the entrenched aristocracies in the United Kingdom and, to a lesser extent, Italy and France. 
This is far from the up-by-the-bootstraps, Horatio Algeresque self-image that most Americans hold dear. In the United States, immobility is a way of life, especially for the very rich and the very poor. 

I don't know. I feel like I've been reading articles like this my whole adult life. Still, there is a point worth exploring, which stories like this only approach indirectly, if at all: a big problem is that middle class "basics" - houses, cars, college education, health insurance - have gotten so expensive as to be almost unattainable; while "luxuries" like smartphones, designer clothes, indie music, artisanal food, etc have become cheap and widely available. Coincidentally*, the basics are what have attracted the most attention from the gov't.

(Also, note that the Atlantic - reflecting conventional wisdom among the intelligencia - thinks that education is the key to upward mobility, rather than hard work or determination. There was a famous published in 1994 that tried to warn the public and policy makers of this, but no one paid any attention and attacked the Bell Curve as being beyond the scope of polite discourse.)

Not everyone can "make it" in America. That's not really the point. We can't all be Steve Jobs, after all. Also, the idea that "the rich" (whomever they are) are either staying rich or getting richer is just ludicrous. A lot of fortunes have been lost over the last 4-5 years with many members of the upper class downsizing their lives to an extreme degree. Maybe you don't see them - it is an invisible hand - but they are there, believe me. But still, it does seem something is out of whack when people can't buy a home, but can carry an i-phone around with more computing power than anything the wealthiest person in the world could buy just a couple decades ago.

*if you don't hear the sarcasm there, you are not paying attention. 

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