Is The US Destroying the Middle Class?

With a certain frequency, commentators see fit to worry as to the extinction of the US middle class. One among these, it seems, is one Edward Luce, who composed a piece on "The crisis of middle-class America" for the Financial Times. The piece profiles two families making about $70k/yr each, and worries as to the future of them and families like them. Both are, by coincidence, families of loyal Democrats, and the piece sports the requisite concerns about the potential dangers of tea party barbarians howling at the gates of the US order.

I feel myself in an odd position in regards to such stories. The particular definition of "middle class" picked for the story is a family income threshold which five years ago was frustratingly above our families income, and which now is embarrassingly below it. In this regard, I recognize myself to be uncharacteristically fortunate. However, having recently made a good deal less than this (and coming from a family which never exceeded such a total, even adjusting for inflation) I feel that I have some familiarity with the sort of middle class world being discussed -- while I can't escape the feeling that this seems a very squalid and foreign world to the Financial Times writer.

Added to this sense of class conflict is that Luce seeks to build up his story with juxtapositions of facts which sound like they mean more than they do. For instance, he says:

People in Europe and Canada are subjected to the same forces of globalisation and technology. But they belong to unions in larger numbers and their healthcare is publicly funded. More than half of household bankruptcies in the US are caused by a serious ­illness or accident.

Now, all of these individual facts are true, but they are assembled in a way which suggests things which are not. For instance, you might get the impression from this that it is the cost of medical care which causes most bankruptcies in the US. However, it isn't. Most people who declare bankruptcy have at least some medical bills, but it is often not the size of the bills but the fact that their income has been disrupted by missed work due to an illness or accident which leads to the series of problems that ends in bankruptcy. This is why illness remains a major cause of bankruptcy in Canada just as in the US, despite the fact that health care is state funded in Canada.

And while it's true that US workers have much lower union membership levels than in many European countries, it's not as if the workers in heavily unionized countries in Europe (Greece? Spain?) are not experiencing any uncertainty. Indeed, if anything, the global recession and financial crises has been hitting harder in many of the countries with the most comprehensive union systems and welfare states, and this has been causing greater anxiety because people have planned their entire lives around fixed work and pension benefits remaining in place indefinitely.

Another standard concern is inequality. Certainly, inequality is something which rubs us Americans the wrong way, and as is often observed: inequality is currently at its greatest levels since the "gilded age" of the 1920s. From the sound of the complain, one might imagine that the 20's were some world nadir of inequality, but in fact, although it's true that in the 20's the rich had been getting richer for the last several decades, while an agricultural depression had been afflicting the half of the country which still lived in rural areas for nearly a decade by the time the stock market crashed, the early 20th century was in many ways much less unequal than the centuries which had come before, and certain gave more opportunity for people to move between economic classes.

I was struck recently by the degree of economic and social inequality which used to be utterly unremarked upon when reading Bill Bryson's At Home: A Short History of Private Life. (To my great annoyance, the Columbus classical station plays NPR news during the commuting hours, which is precisely when I could use a little musical serenity, but the happy result of this was that I heard an interview/book review of Bryson's latest.) The book centers (perhaps a strong term for its wandering course) around a country vicarage built in 1851 in England which Bryson lived in while writing the book, and while edging gradually into a history of house design and home life, it pauses to examine the history of income trends which allowed the vicar of a rural parish with 250 parishioners too build such a beautiful and lasting structure. The vicar who build the house in 1851 had an income as vicar of 500£, an amount which was 25x the average English household income at the time and which translated into modern terms is $400,000k/yr.

This was real social and economic inequality, of the sort which has predominated through much of history. By comparison, I'm not sure that the degree of variance between the 1920s, the 1950s and today represents a great deal of change, other than the ability of the global market place to make a truly tiny number of people exceedingly rich, and of the global media to then publish the foibles of those rich people widely enough to fuel to our collective envy and astonishment.