Jonathan Rauch at National Journal has an excellent in-depth exploration of what’s happening in the American economy. The headline, “The No Good, Very Bad Outlook for the Working-Class American Man,” captures its thesis perfectly.
The article focuses on themes that I’ve tried to address here as well, such as the blog post earlier this week detailing how employees are being forced to split an ever-smaller share of the economic pie, while the share of the economy going into corporate profits increases. The National Journal piece tells a similar story through a different chart, this one focusing on increased productivity and how the benefits have been allocated:
As Rauch notes, and as the chart illustrates, for decades employees shared in the benefits of greater productivity. As labor became more efficient, both employees and employers shared in the benefits. However, that relationship ended somewhere in the late 1970s, at what you might call “the Big Break” in the U.S. economy. (You see that same transformation occurring at the same time across a wide variety of statistical measures — income distribution, median household income, etc.)
Productivity growth — the chart’s red line — continued and even accelerated after the Big Break, but suddenly blue-collar and non-supervisory workers stopped sharing in the benefits of that increase. A little bit later, the same thing began to happen to a lesser degree to employees in general.
Rauch describes the implications:
As a result, less-educated workers are in trouble, and men are in trouble, and less-educated men are in deep trouble. The problem has become more serious than most people realize. “It has reached a very extreme point,” said David Autor, a labor economist at the Massachusetts Institute of Technology.
Only a minority of Americans obtain four-year college degrees, and yet the economy offers ever-fewer well-paying jobs for men with nothing more than a high school diploma. Since 1969, the weekly earnings of the median full-time male worker have stagnated, according to economists Michael Greenstone of MIT and Adam Looney of the Brookings Institution’s Hamilton Project on economic growth. Stagnation is disappointing, to put it mildly, given that the per capita gross domestic product has more than doubled (adjusted for inflation) since 1969.
But men with only high school diplomas have faced worse than stagnation: Their earnings have dropped by around a fourth. And men who didn’t finish high school have fared worse still: Their incomes sank by more than a third, leaving their inflation-adjusted earnings stranded in the 1950s.
In effect, the economy is telling less-educated men: Get lost.
That has critically important social implications. If high-school educated males are earning a fourth less than their fathers, they are less able to support a family and less attractive as potential mates. If they do marry and support a family, they are less likely to be able to afford health insurance for them or to pay for higher education.
As exit polls and other data demonstrate, the Republican Party has managed to convince white working-class males that the economic challenges outlined by Rauch can be traced to excess government and, to be blunt, “those people.” It’s an explanation that might feel right and that resonates emotionally. By providing an alternative explanation to that illustrated in today’s chart, it also happens to suit the purposes of those who fund the campaigns and pay the bills for the GOP and its associated organizations.*
However, that narrative cannot plausibly account for the type of dramatic, even traumatic change documented in the chart above. There is no mechanism by which government can be said to be driving that trend. It’s not caused by taxes; it’s not caused by the deficit. And if more and more Americans have become reliant on government, it’s in part a consequence of, not a cause of, the economic decline depicted here.
But here’s the most frightening thing about the chart above: The trend that it illustrates shows no signs of moderating. This is a transformation that could continue to play out for a long, long time, and if we don’t do something to reverse it or adjust to it, it will change the nature of American society.
– Jay Bookman
* (An aside: Did it strike anyone else as odd that when Dick Armey left FreedomWorks, the ostensibly grassroots Tea Party organization, he was handed a golden parachute of $8 million? I had no idea the grassroots had so much green.)