Why America's Economy Feels Stacked Against the Middle Class

From the end of the second World War in 1945 until roughly the late 1970s, the average American worker and family, alongside the national economy as a whole, enjoyed an unprecedented stretch of growth and improvement. Manufacturing remained strong, union membership was at or near historic highs, service sector jobs were booming, home ownership saw a consistent rise, university education became accessible to millions, real wages rose alongside life expectancy and the average American's quality of live consistently improved decade over decade. Due to a variety of factors, however, this growth began to slow and even sputtered during the Oil Shock and stagflation years of the late 70s. This led to large-scale deregulation beginning under President Carter, carrying on into and well past the Reagan administration. Instead of simply updating regulations and retooling the economic levers available to state and federal governments, America ushered in the Neoliberal era of trickle-down economics, government-is-bad propaganda, increased political polarization, falling union participation, stagnate wages and a general squeezing of the middle and working classes our nation built up in decades past.

Nowadays, the abject political failure of Neoliberalism is so complete that both major political parties are actively trying to redefine themselves as separate from the policies of the last several decades, blaming the 'other side' for the worst offenses. It remains no small irony that the Republican party, which originally ushered in the Reaganomics famous for promoting free-trade agreements, trickle-down economics and so-called traditional values is now being usurped by a Trump-wing of the party notable for their isolationist, nationalist, anti-democratic and extremist views. The fundamental challenge to American democracy we see today is a direct result of the unchecked profit-chasing class of corporate America funding and exacerbating the white-and-Christian-nationalist sects of the electorate for their own selfish and corrupt gains. Clearly biased mass media networks, engagement-driven social media, anti-union campaigns at companies around the nation and more are all the result of a collapse in the power of the working classes over the last half century or so. This regime of political thought impacts everything from the size of our paychecks to the price of goods to what we hear in the news, and nearly all of it is geared towards keeping the status quo while blaming other victims of the Neoliberal system for our problems.

Corporate and wealthy America, however, remain on-the-whole quite pleased with the state of business and politics in our country. And thus, even while politicians seek to redefine themselves and the fight against 'the others' along social and cultural lines, the true fight presented to us remains unfought, a loss the American people are suffering without most even knowing they need to fight it. Nowhere is this reality more apparent than in the rapidly rising costs of three of the most necessary industries to the modern middle class family: medical care, housing and higher education. While the percentage of Americans considered middle class has fallen from 61% in 1971 to 50% in 2021 and average real-wages for American workers have remained largely unchanged since 1978, the cost of medical care, housing and college have all seen skyrocketed inflation-adjusted costs. When buying power is accounted for, the median US household income has increased by 29% since 1960, yet the cost of the median single-family home has increased by 121% as of 2017 (so not including the huge increases in home values since 2020), while the median rent rose 72% during the same timeframe. The cost of college tuition has risen 747.8% since 1963, while health insurance costs have surged by roughly 740% since 1984, leading to Americans paying more than twice the amount they did in 1980 for healthcare even while spending on medical services and devices declined per capita over the same timeline. The supposed 'tickets to the Great American Middle Class' have quickly become out-of-reach for an increased percentage of our citizens, while saddling millions of others with decades of debt.

In case you're wondering: no, such huge increases in prices are not the norm across the rest of the developed and western world. These surges in prices in comparison to wages and wealth are a pretty uniquely American problem within the developed world, and they won't go away without a strong American solution. Fortunately, there are answers to be found not only in the policies of other developed nations, but our own history, if we're yet bold enough to educate ourselves and demand such change from our political system. Universal healthcare and higher education would guarantee all Americans access to these valuable services. Vastly expanded housing credits, tax reforms supporting renters, rent increase controls, federally-mandated affordable housing construction and guaranteed housing programs for US citizens would be the most direct and efficient route to fixing these issues, yet merely regulating the three respective industries more effectively and fully would allow us to bend the cost curve back down in favor of consumers. Supporting and protecting unionization efforts, pro-labor legislation guaranteeing paid sick leave, vacation time, parental leave and health insurance would also help boost the wages and benefits for millions of American workers. Equal funding of K-12 public schools, universal community college and trade school programs, banning corporate money in politics, greater funding for public transportation and other similar measures will all help the average American consumer and equalize the massive wealth transfer the upper-income classes of the US have been receiving from the middle and working classes over the last fifty years or so.

If you've been feeling like the US economy is stacked against you, designed to saddle us with debt and leave us forever reaching for the same milestones prior generations hit much earlier in life, particularly for those of us under the age of 45, it's because that's exactly what our economy has been fine-tuned to do over the last half-century. Modern America is programed to systematically siphon billions of dollars from the workers and producers up to the owners and investors of the nation, all while they turn around and invest tens of millions into mass and social media to convince us we should remain at each other's throats over social, cultural and moral issues. While subjects like abortion rights, LGBTQ+ equality and racial justice are all important issues, we must not allow ourselves to become artificially focused on them as our would-be overlords continue to collect the gains from our increased productivity while automating or offshoring our jobs away and using every corrupt loophole in the book to pay an average tax rate lower than the median American family. We need to collectively wake up, demand reform in our political system and take back our economic power.

Currently, the United States is moving ever closer to being a nation of the wealthy and for the wealthy, yet we can change this. While many corporate-apologists will counter with sound-bites similar to "even less well-off Americans seem to afford new televisions and smartphones, so they can't be that hard-up", these pundits willfully neglect the fact that many technology-related goods such as phones, computers, televisions and even economy-class vehicles have all seen inflation-adjusted price decreases over the last several decades. These amount to blips on the overall screen of American economic progress, however, and fails to change the fact that our system still leaves millions of Americans overworked and debt-laden while being told they should be appreciative for the opportunity. We can do better, we deserve better, and we can create a far superior system to the one we have today. If you're still not sure if things can really improve, look at the systems and policies in place within nations like Iceland, Norway, Switzerland, New Zealand, Germany and Ireland. They make many of the arguments within this post far better than this publication ever could. America claims to be the greatest nation on earth; it's well past time we truly hold ourselves to that standard.

References:

1) https://www.clevelandfed.org/publications/economic-commentary/2020/ec-202003-is-middle-class-worse-off

2) https://www.americanprogress.org/article/the-middle-class-grows-the-economy-not-the-rich-2/

3) https://www.pewresearch.org/fact-tank/2022/04/20/how-the-american-middle-class-has-changed-in-the-past-five-decades/

4) https://www.cnbc.com/2022/07/18/most-middle-class-households-say-income-falling-behind-cost-of-living.html

5) https://listwithclever.com/research/home-price-v-income-historical-study/

6) https://educationdata.org/college-tuition-inflation-rate#:~:text=After%20adjusting%20for%20currency%20inflation,when%20tuition%20prices%20increased%20121.4%25.

7) https://ycharts.com/indicators/us_health_care_inflation_rate

8) https://www.cnbc.com/2019/10/09/americans-spend-twice-as-much-on-health-care-today-as-in-the-1980s.html

9) https://educationdata.org/public-education-spending-statistics

10) https://www.epi.org/publication/public-education-funding-in-the-us-needs-an-overhaul/