Editorial: Where is the U.S. middle class?
Publisher’s note: This editorial is from the Oct. 21, 2013, Sacramento Bee.
Our Declaration of Independence states that “all men are created equal.” Over the years, Americans have removed many barriers to that great aspiration – with the Fourteenth Amendment, the vote for women, the civil rights acts, public education and more.
But since the late 1970s, the United States slowly has become the most unequal of the world’s developed nations in its distribution of income and wealth. Our middle class is shrinking.
A new film, “Inequality for All,” hopes to bring attention to this. The protagonist is the passionate Robert Reich, an economics professor at UC Berkeley, and a former labor secretary during the Clinton administration.
The timing certainly is right for a clear explanation of what has happened economically to the middle class in the last 30 years, and the impact it is having on our democracy. All to the good if it can begin a spirited conversation to consider remedies.
Bush did it.
““The real democratic American idea is, not that every man shall be on a level with every other man, but that every man shall have liberty to be what God made him, without hindrance.”
~Henry Ward Beecher
In 1997 there were about 8800 publicly traded companies in the US stock exchanges, today there are about 4400.
The system was rigged to consolidate wealth and power and it has. Bigger and bigger gain more and more political power and stifle free enterprise competition through regulation.
Free enterprise is the solution.
Free enterprise does not mean unregulated, it means evenly regulated and as far removed from government influence as possible.
Look at Bend, Oregon, compare their success to SLT failure. Bend is far more “free market” oriented and separate from the government involvement. Here in Bend there is a feeling that the government works for the people. In Tahoe it is the opposite there you work for the government.
It’s obvious which system is better.
CJ, middle class utopia in Bend?
Not according to some of the stories and the comments to those stories I just read in one of your local publications.
I think it’s clear to most “rational” thinking people that free enterprise hasn’t worked both in health care and the mortgage markets. Obviously many people who don’t have their health insurance paid for by their former employer are struggling to find a way to have coverage, and many have lost their homes due to in part predatory lenders policies( and their own caused overextended borrowing ).
Society over the recent years promoted that if you aren’t getting rich at something – you’re not important. I hear this from so many young people now who have this constantly thrown in their faces through all the information connectivity they are exposed to.
Money doesn’t always buy happiness for everyone.
The middle class of America is alive and well, it just needs more paying jobs put back on the table for people to prosper again. Most people want to work to have purpose and reward. Creating jobs should be right up there in priorities with health care reform.
*sigh* More digs at those of us whose education has veered from the state-accepted Keynesian volumes. Believe it or not, we ARE “rational thinkers”
Again: This country hasn’t had “free enterprise” in the health care OR the mortgage markets in a very long time. Both those markets have been heavily regulated by government for at least twenty years. Certain aspects of those markets for as much as 100 years. How can you claim the free market doesn’t work when you have never experienced it?
Give Capitalism a chance. We’ve seen how well statism works. (it doesn’t)
Dogula, we cannot cite one success story of the Keynesian model. But don’t let that depress you, they’re still trying.
BTW, you forgot energy markets; highly regulated, not at all free markets. And people wonder why they pay such an excessive amount of money at the pump.
Biggerpicture,
I don’t believe everything you read and you shouldn’t either.
Take paid parking for instance; the system in Bend is great when compared to SLT. The reason is because of two differing objectives. People in SLT should check it out and see the difference for themselves. First off, the first two hours parking are FREE… Three free hours if you use the parking garage.
It has other advantages over SLT parking plan also, check it out.
I’d be interested in links to those articles you refer to so I knew if you are telling the truth or not.
I know, AB. If we got into the whole sphere of world economics it would veer off into absurdity. I was merely addressing the two issues “health care and mortgage markets” that John A brought up.
Just trying to keep it simple. . . ;-)
How does 64 and 128 bit computing figure into the job count. Did laborers/factory workers who made $20K-$75K a year, get replaced by techno geeks making $50K -$200K a year?
Continental 48 states are about the same size as Australia. Australia has less than 20 million people. We have over 300 million people. Somewhat similar land size for resources, but we have over 10 times as many people to feed, clothe and house at minimum.
The numbers don’t go into demographic break downs. White male adults, adjusted for inflation, might have the same numbers as before, if not more $s now.
Hmmmmm…… What is going on?
This article about the documentary movie, “Inequality for All”, documents how 30+ yrs. of reaganomics has destroyed the middle class. The sooner we disabuse the misinformed and willfully ignorant of the false belief that the gov’t is total evil and that subservience to the 1%ers will lead to trickle down wealth the better.
Pretending that objectivism has some workable economic philosophy that only a few “enlightened” Ayn Rand heel-clickers are able to understand is hilarious. The glory days of the “free markets” in America they so revere were the age of the “Robber Barons” fer chrissakes. And the phony condescending *sighs* and supposed persecution by the “tyrannical statists” is classic paranoiac sociopath behavior that retards rational thought. This lunatic fringe, which I first discovered and dismissed as the “Me the People” selfish blowhards called The John Birch Society” in the 60s, must be marginalized now as they were then before they do any more damage.
Did someone say, ‘lunatic fringe’?
$3,567 Per Household increase in Federal Debt in October.
Thats right, the Federal Debt Jumped $409 Billion in October; $3,567 Per Household.
For those of you that work, keep that checkbook handy, your government still wants more.
Yep. Harry Reid the other day said there would be no discussion on the budget unless “revenue increases” were included. That means more taxes, people. You’re not paying enough yet. You will never be paying enough.
” I was merely addressing the two issues “health care… ”
Yes you never address why we pay 50% more and get far less. Far far less than what can be explained by tort reform.
Guess what happens to lawyers and insurance companies when there is a single payer option?
They lose power.
And all the lawyers who are currently running the Federal government GAIN power.
Lose/lose for the people of the middle class.
DOGula, Tell us all what extent of regulation has hindered health care and the mortgage markets.
We really want to know how these markets have been stangled by gov regulation into starvation …… ( eyes rolling )
What you’re saying is that it’s just fine that hospitals charge $10,000 for a simple stress test, and no changes have been made since the secondary mortgage market brought the country down. No regualtion = big money for the greedy …..
Tell us how all of that works for you
I bet you have your healthcare paid by a past or present employer and your home paid-off.
There isn’t enough space here to go into explanations of how government regulation has strangled the people, while helping corporations. Maybe you could read a book.
You know what they say about “assuming” anything about anyone. I have bought and paid for my own medical insurance for over 25 years. And yes, my house IS paid off. Because I bought my first one 30 years ago and always paid extra into the principle whether I could afford to or not. And no, it wasn’t easy. Interest rates were 13% then. It was hard and it was scary. And whenever I moved and bought a new house, I took any profit from the old house and put it straight into the new one. I did not use my equity as an ATM like so many people do.
It’s called discipline and frugality.
We all make choices in life. You can’t be resentful of other people for making a few good ones.
Is there a myth about the 1%? Are the 1% out solely to divide and conquer only for the 1%? The 1% might be supported by about 10%-20% for mutual benefit.
I think you’ve hit on something Dogula. Some of us have criticized our friend Kae and this site for publishing d*mn near anything that pops into anyone’s mind – and there’s a lot of minds out there that are open to popping.
But if you’re correct that we’re limited by space, we might soon see some sort of barriers to the current free space for all regardless of how nonsensical a proposed post might be. Of course, when one forum site becomes reasonable, there’s always another nearby to accept its screwballs.
Ok, since you won’t answer the question about gov regulation let’s try a different approach.
Tell us how a totally free market works to keep monopolized industries from being greedy and raping consumers. How does it helps the “middle class” from being squeezed between dramatically increasing high cost of living and stagnant wage increases ? What’s gonna save them ?
How does it create true industry competition when these industries freely conspire to monopolize their rates and policies to consumers ?
Let’s say we drop all regulation on business ( as you people keep suggesting ) Are the big corporations gonna be really nice guys and charge consumers less for their products and services ?
I’m really trying to wrap my head around this concept I keep hearing from you people ……
And please, take all the space you need to spell it all out for us.
Obama kept one promise, he fundamentally changed America, FOR THE WORSE.
Decades of an increasing liberal “Nanny State” mentality have undermined our economy and poisoned our education system.
Conservatives have warned of this! History has warned of this too. Today’s Americans have been so down and spoiled that we have begun the change from world power to to a declining “has been”.
A nation of Liberal, Feminized, Losers.
We will not last long, the world is spiraling to a state of war and the liberals of America that support Obama, Reid, Pelosi are to blame.
Liberalism Kills, any questions?
Simple, John A. In a totally free market, the occasional ‘monopoly’ would happen. But without government support for those monopolies, they wouldn’t last long. Somebody with a better, fresher idea, and/or better customer service and a lower price, would always come along and undercut that monopoly. Without government to stop the new entrepreneur from competing with the big corporation, the fresh, new idea will gain customers and grow. Corporations, simply as a result of growing large, become less able to innovate, which is to the benefit of the creative upstarts. Big corporations need (and use) government to protect their turf from those upstarts. No government cronyism, much less chance of powerful monopolies.
Government licensing plays into protecting large businesses from competition as well. They say it’s to protect the consumer from shoddy products, but that can be done through free market as well. In fact, even licensed contractors do shoddy work sometimes, as we have all seen occasionally.
Take taxis. You have to pay an exorbitant sum for a taxi medallion from government. That keeps out the competition from people who who want to be ‘gypsy’ taxi services. If Joe down the street wants to hire himself out to drive people where they need to go, why can government say he can’t? If Joe can’t afford the medallion, he gets arrested if he performs that simple service. Protectionism at its finest.
Thank you. Let’s take health care for example. What’s to prevent a huge hospital network corporation from offering unique services and at a discount to patients right now ? Why hasn’t that happened ?
EVERYONE , and I mean everyone would switch to them including businesses to reduce their costs for their employees. There’s absolutely no regulation to prevent that right now. How would total deregulation be any different ?
In Calif, with the exception of some HMO’s hospital networks they have absolutely no regulation on what they charge other than for medicare or medical services. None – zip – nada….
So why hasn’t one of these hospitals stepped up to the plate and offered creative innovative services at reduced costs ?
Let’s take it a step further. I invite you to phone your local hospital and ask them what they charge for a specific medical service. They’re gonna give you a wide range estimate with no committment because they wanna saok you good when you come in. And what your insurance company pays them on contract is “Top Secret” and none of your business. How is that regulation ? How is that gonna be better with deregulation ?
The middle class person goes in for a simple 1/2 hour low risk surgery and the bill is half of what her or she earns for the whole year !
You’re not offering any reasonable solution to these types of problems other than let’s go back to what was proven not to work in the past.
In a perfect world, we’d all be perfect people and nobody would ever take advantage of anyone else.
But it is not a perfect world. Evil people look for power. In a free market, there will be bad people, but with strong government control, it’s even easier for bad people to gain control. And their ability to maintain control through government protection is far greater than without it.
Well, I don’t know that much about hospital administration, so I can’t really speak to the current situation, except to say that they are in symbiotic relationships with insurance corporations and government now, for the most part. And I know that if I choose to have lab work done at the hospital it costs me 3 times what it costs me if I go down to the Cash Clinical lab in Carson City. Cash Clinical has innovated by refusing to deal with insurance companies at all. You go in with your lab order, pay the fee, and they do the tests. My doctors have the results, usually the next day, if not the same day.
Same thing with the various surgical centers and diagnostic centers that have sprung up in different places. They are ALL less expensive than having those services performed at Barton.
The hospital situation is a problem. But except for extreme situations, there are other alternatives, if a person chooses to do a little research.
The free market does require personal responsibility. You need to dig a little deeper for information than just taking the obvious route. But in today’s world of information accessibility, it isn’t too hard.
P.S. The small surgical centers, laboratories, and diagnostic centers WILL tell you exactly what any given service costs. It’s how they compete. Competition is in EVERYONE’s best interest. Keeps prices low, and quality high.
Government has no competition.
Yes Dogula, I have been doing the same for years – going down to Carson City to use Lab Corp, Great Basin Imaging, and Carson Valley Medical Center etc. I won’t go to Barton unless I’m unconscious with blood squirting out of my ears and can’t make my own choice.
But guess what ? Yup – Carson Hospital and Renown have recently bought up all of them and now controlling rates of their own.(Lab Corp remains ) This regional consolidation ( monopolization ) is taking place everywhere because the big corporate hospital corporations want to continue to control their own rates.
The party is over. The semi-free enterprise system can’t sustain itself with runaway rates ( 35-50% increases per year )
I’m sorry to hear that. But I was wondering how such entities would survive under obamacare anyway. I mean, with everybody being forced into insurance companies, how can a cash business survive? Again, this is the result of government intervention. I think the small businesses allowed themselves to be bought out as the only solution to the looming problem. They have no future under the Federally mandated ACA.
For now, Cash Clinical remains, but I’m sure not for long.
Another government created monopoly, in a very real sense.
Dogula: Your lack of knowledge on the ACA is astounding. Only companies with greater then 50 employees fall under the employer mandate of the ACA. For example, I own a company with 22ish employees. We offer health insurance to anyone working over 24 hrs a week, and the only thing we were required to do is to provide each employee a letter indicated they can shop around and if they wanted to could opt out of what we provide them. In other words nothing changes for us.
There are 5.7 million firms in the US and 96% employee fewer then 50 employees, so only about 210,000 firms are actually covered by the ACA mandates; and of those 96% or so offer health insurance, so that leaves on about 10,000 companies that are larger then 50 employees and do not offer health insurance.
Few companies with 50 or so employees (or more) are truly small businesses. I qualify as an SBE in California but if I grow to 50 employees, I will no longer qualify as an SBE due to the increased revenue that would accompany such growth.
The requirements for these businesses are not all that onerous and they represent less then 0.2% of all companies in the US.
Rick
Thanks for that, Rick. It was totally off the topic we were discussing, but you just had to throw in an insulting comment, didn’t you? Your statement has NOTHING to do with what John A and I were discussing. But you just feel the need to say I’m wrong anyway.
Well, good for you.
Well Dogula, more to the point, merging mentality has little to due with the ACA. Hospitals, labs, clinics merge because we do little to control cost of health care in this country. People without insurance still seek care, usually in emergency rooms, and do not pay, those of us with good insurance, cover the non-payers (like we all that follow the law, cover shop-lifters). So as the ACA takes affect, provides a broader coverage (including young healthy individuals) the overall cost structure is benefited. In Europe, the cost for a hip replacement is a fraction of what it is in this country – for the same piece of equipment – often made in the states. To the point there is no a cottage industry of Americans going to Europe (Belgian is a good example) getting high quality hip or knee replacement and coming back savings quite a bit of money. No our system is broken. Will ACA make everything better for every clinic, lab and hospital, no but it will start helping. If the Republicans actually wanted to improve the system, they would offer some solutions. This btw has been repeated by several moderate Republicans like Jeb Bush, McCain, Christie, etc.
So more to the point, under the ACA these clinics might see some relief, but the push for mergers will continue as it does in most industries. The ACA is not a government health care program (as some sell it) but an insurance driven one. Small boutique companies are becoming passe.
Rick
There are 2 reasons for the diminishing middle class and they are closely related:
Technology – CPU’s have drastically reduced our reliance human interaction. Think of everything you do using technology now that you used to need a human interaction for. Think of how many jobs existed in your organization back in the 80’s that have been replaced with technology.
Worker Effeciency/Productivety – Following 911 and then the late great recession companies had to lay off and reduce jobs to stay afloat. There was a time when the average work week was 40-50 hours and the expense accounts were fat. Now most folks I know in salaried positions work 50-60 hours and can barely buy a cheeseburger a day when travelling. They clean thier own offices, answer thier own phones, do thier own purchasing and recieving.
Those folks in charge of making and selling technology are making alot of money right now (a obscene amount of money), those folks that were replaced by technology or laid off due to a need for increased worker productivety are marginalized and are competing for part time jobs that do not offer healthcare or benefits.
Don’t ask me how to fix this, but this is what happened.