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As long as the middle class continues to be required to provide for many in the lower class who have no desire to provide for themselves, we'll continue to be squeezed by high tax rates. The middle class will continue to exist, but the definition of "middle class" will likely be adjusted.
I don't think "providing for those in the lower class with no desire to provide for themselves" is necessarily taking a huge chunk out of most people's paychecks... the Federal government spends way more money on corporate welfare than it does on TANF. Now you could argue that Social Security, Medicare, Medicaid are taking a lot out of people's paychecks, but Social Security & Medicare taxes usually go to subsidize old people who often can't provide for themselves and have paid taxes all their lives to enjoy those subsidies when they retire, and Medicaid is absolutely necessary for an even remotely humane civilization... even people using TANF and food stamps are many times in that position out of an inability to provide adequately for themselves and their family, rather than "choosing" to be too poor to get along on their own (as if people actually like being poor)...
What's strange is that I've heard that the middle class was actually considerably larger and more prosperous during the more liberal days of the 60's and 70's... this would make sense to me for a number of reasons...
A. More generous social programs might have made it easier for working poor people to become middle class, as they would have a larger safety net to fall back on if they took a risk in trying to get a better, higher paying job and wound up unemployed... more incentive therefore to move from minimum wage to higher wage, even if the incentive to move from Welfare to minimum wage might have been decreased...
B. Higher real minimum wage back then and stronger unions drove up wages at the bottom, which would once again make it easier for low-wage workers to save up money and move up the income ladder...
C. I think (not sure) that the government was more zealous in breaking up and preventing monopolies back then, which would mean more higher-paying jobs.
I'm really interested in hearing the comebacks to all of this stuff...
I don't think "providing for those in the lower class with no desire to provide for themselves" is necessarily taking a huge chunk out of most people's paychecks... the Federal government spends way more money on corporate welfare than it does on TANF. Now you could argue that Social Security, Medicare, Medicaid are taking a lot out of people's paychecks, but Social Security & Medicare taxes usually go to subsidize old people who often can't provide for themselves and have paid taxes all their lives to enjoy those subsidies when they retire, and Medicaid is absolutely necessary for an even remotely humane civilization... even people using TANF and food stamps are many times in that position out of an inability to provide adequately for themselves and their family, rather than "choosing" to be too poor to get along on their own (as if people actually like being poor)...
What's strange is that I've heard that the middle class was actually considerably larger and more prosperous during the more liberal days of the 60's and 70's... this would make sense to me for a number of reasons...
A. More generous social programs might have made it easier for working poor people to become middle class, as they would have a larger safety net to fall back on if they took a risk in trying to get a better, higher paying job and wound up unemployed... more incentive therefore to move from minimum wage to higher wage, even if the incentive to move from Welfare to minimum wage might have been decreased...
B. Higher real minimum wage back then and stronger unions drove up wages at the bottom, which would once again make it easier for low-wage workers to save up money and move up the income ladder...
C. I think (not sure) that the government was more zealous in breaking up and preventing monopolies back then, which would mean more higher-paying jobs.
I'm really interested in hearing the comebacks to all of this stuff...
You are 100% correct. And as far as C, you're completely right. Antitrust laws were stronger than they are today and they were also enforced. The weakening of antitrust laws and unions that began under the Reagan Administration helped erode America's middle class majority (which in itself was a product of the New Deal) until it finally ended under George W. Bush. (As much as I despise Bush, it's not fair to give him sole credit for ending the middle class majority despite his policies certainly hurting the middle class greatly ; after Reagan's economic policies leading to greater inequality the end of the middle class majority was inevitable ; Clinton only slowed down the decline of the middle class, he didn't reverse it)
No big surprise that the levels of inequality in the US today are higher than they've been since the worst part of the Great Depression.
One other factor you didn't mention: in some states, higher education was extremely inexpensive or free (I'm pretty sure the Cal State system during the 1960s was free and the UC system was very cheap ; I think NY's public universities were also free or cheap, and CUNY was free) which made social mobility far easier.
You are 100% correct. And as far as C, you're completely right. Antitrust laws were stronger than they are today and they were also enforced. The weakening of antitrust laws and unions that began under the Reagan Administration helped erode America's middle class majority (which in itself was a product of the New Deal) until it finally ended under George W. Bush. (As much as I despise Bush, it's not fair to give him sole credit for ending the middle class majority despite his policies certainly hurting the middle class greatly ; after Reagan's economic policies leading to greater inequality the end of the middle class majority was inevitable ; Clinton only slowed down the decline of the middle class, he didn't reverse it)
No big surprise that the levels of inequality in the US today are higher than they've been since the worst part of the Great Depression.
also free or cheap, and CUNY was free) which made social mobility far easier.
I wouldn't say he's 100% correct, maybe about 12% correct, you on the other hand are 0% correct. First of all you are bringing in bipartisin issues where there is none, not totally anyways. Please provide some explanation how reagan and bush "eroded middle class" via antitrust laws or union busting. You just can't be glib on this board and post B.S. (well you can but expect to be challenged). On the contrary, itwas during Reagan's watch when he used the Sherman act to break up Ma Bell, and Bush used the same act to (or to try to) break up Mircrosoft.
The true source of declining middle class is not this evil guy Reagan or Bush, etc. It's global competition combined with the improved logistics and technology that allows global competition. The US does not work in a vacuum. You can legislate, tarrif, tax to you heart's content but it's still going to impact you and the result is that the US must compete globally. I don't like it anymore than you - but if Ansif in India is willing to do a job for less money than you than he will get the job. Unions worked themseleves out of jobs. Reagan or Bush had absolutely nothing to do with it (how you must hate republicans). Actually, that union guy in the 50's who bargained for this huge salary and pension to buy his big boat worked his son out of a job. Companies can no longer compete and even the uniouns knew it. Half the cost of making a car is going to health cost and pension payments.
And that brings the final thought - there are indeed some costs that are out of control - home prices and medical care, and those are indeed impacting the middle class.
One final thought after that on your obviuos political bias - Clinton undertook probably the largest welfare reform in history and welfare was severely limited and curtailed for many. That blows your policital theories wide open doesnt it?
If you are a CEO, you can get easily earn $100,000,000 in salary and perks while you pay your blue color workers $6 bucks an hour (or less, if you hire illegals).
On the contrary, itwas during Reagan's watch when he used the Sherman act to break up Ma Bell, and Bush used the same act to (or to try to) break up Mircrosoft.
True, but I'm pretty sure that in general anti-monopoly regulations were significantly relaxed and less zealously enforced starting with the Reagan administration.
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It's global competition combined with the improved logistics and technology that allows global competition. The US does not work in a vacuum. You can legislate, tarrif, tax to you heart's content but it's still going to impact you and the result is that the US must compete globally. I don't like it anymore than you - but if Ansif in India is willing to do a job for less money than you than he will get the job.
-- Free trade. I guess the jury's out as to whether the benefits of free trade outweigh the costs, but should American workers really be forced to compete with sweatshop workers and reduce their working standards to make products that can be adequately produced here? Of course whether the benefits outweigh the costs is the subject of debate... seeing the declining industrial base of the U.S. leads me to suspect that the costs may outweigh the benefits, although that may just be because of my liberal bias... I mean it did drive prices down in some instances, but everything you buy nowadays seems to have "made in China" or "made in Taiwan" written on it. And I'm not saying that the U.S. needs to have an overly protectivist (protectionist? I don't know) policy with high tarrifs and all that, but there needs to be a balance...
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Unions worked themseleves out of jobs. Reagan or Bush had absolutely nothing to do with it (how you must hate republicans).
-- Wasn't Reagan known as being pretty unfriendly to unions relative to previous presidents?
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One final thought after that on your obviuos political bias - Clinton undertook probably the largest welfare reform in history and welfare was severely limited and curtailed for many. That blows your policital theories wide open doesnt it?
I don't know... it could be that a well-implemented but less generous welfare system would work better than a poorly-implemented but more generous welfare system in terms of helping people get out of poverty, in which case I'm not sure welfare reform was completely a bad thing (didn't it involve expanding the EITC maybe? That might have helped...). However, in my view the best type of welfare system would be one that was simple & effective, moderately generous and able to provide a minimum standard of living for families while removing the disincentive to work (welfare reform reduced the former while improving the latter)... to me a good welfare system would be one that kept unemployed people out of abject poverty, but extended the benefits up the low-level income ladder, gradually decreasing them as income goes up so that people don't have less money by making more money. Or maybe try Kucinich's idea and switch the emphasis from Welfare to public works projects...
By the way... I heard a study pretty recently that was interesting. Some guys measured income growth over the last 50 years during the reigns of different presidents and discovered that income growth for the 95th percentile of income earners stayed pretty constant and wasn't affected by whether Democrats or Republicans were in charge, but income growth for poor people under Democrats was like 4 times faster than it was under Republicans on average... no idea how much stock to put in this, but just an interesting aside.
It seems that most hard working middle class people struggle very hard to keep from going broke. The cost of living is steadily rising while pay rates stay the same. It even seems that in a lot of cases a college degree is the new high school degree. So is the middle-class the new low-class in the near to distant future? Your thoughts..........
My thought is: Stop using credit cards when you don't have the money and save 10% of what you earn to build a security cushion. Debt is what is crushing people and an unwillingness to live within one's means.
There are people who have 6 figure incomes who are literally broke too.
I think a lot of the difficulty is self-imposed.
My thought is: Stop using credit cards when you don't have the money and save 10% of what you earn to build a security cushion. Debt is what is crushing people and an unwillingness to live within one's means.
There are people who have 6 figure incomes who are literally broke too.
I think a lot of the difficulty is self-imposed.
My thought is: Stop using credit cards when you don't have the money and save 10% of what you earn to build a security cushion. Debt is what is crushing people and an unwillingness to live within one's means.
There are people who have 6 figure incomes who are literally broke too.
I think a lot of the difficulty is self-imposed.
You are right, but the credit card company is in business to try to make people broke. They know you cant lend money to just anybody. So why do they do it? $$$$$$$$
If you are a CEO, you can get easily earn $100,000,000 in salary and perks while you pay your blue color workers $6 bucks an hour (or less, if you hire illegals).
Now, how great is this?!
Even me, being about the largest "free market" and capitalism advocate around, hate that with a passion. The issue is the private club of ivy league college graduates that end up in each others board of directors - voting each other outragious packages and benifits even when the company does not perform. It's a flaw in the system and it indeed should be addressed through law legistlature.
At least, to a certain small degree, the stockholders themeselves are starting to press the issue. Look at that bum CEO in Home Depot, Nardelli, making $200 million a year and he was about the most hated incompetent worthless CEO in the industry. Home Depots stock sucked in his tenure. BOD kept on giving him salary raises. Finanly, the stockholders said enough is enough and forced his worthless a** out. So, maybe the system is working.
Last edited by Dd714; 02-18-2007 at 11:42 AM..
Reason: spelling
Yes, the system does work, imagine that. The Free Market will typically work everything out in the long run, thus the reason Unions have faded in recent decades. I'm from a textile/furniture town. When the Unions were voted into one of the nation's largest textile manufacturers, it was just a matter of time before the company couldn't compete and had to close its doors. This is what truly affects the middle and lower classes.
Granted, there is a bit of crony ism in the CEO world, yet most CEOs are paid for what they know and past performances. Sometimes things just don't work out and their companies suffer. Yet, when they are fired, the company and the employee must abide by the employment contract, as in the case of Home Depot. Put the blame on the Home Depot BOD if anyone, for agreeing to the employment contract, not the CEO for negotiating for what was in his best interests.
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