Middle Class is Dying, and How We Can Save It

Today's Washington Post profiles people who have dropped right out of the middle class:

The stock market has rebounded. Corporate profits are soaring. And yet, for millions of Americans, the lingering legacy of the Great Recession is a Great Slide, as job losses, declining home values and decimated retirement savings have knocked them down the socioeconomic ladder. For the formerly middle class, this slide plays out in big and small ways, from a loss of identity to the day-to-day inconveniences of life with less.

The middle class has been dying for decades, due to globalization and the attack on unions. But the Great Recession has accelerated that process to the point where one has to wonder: can we save the middle class in America?

I propose 4 Steps to Save the Middle Class that amount to a coherent progressive economic vision: Rise Up Economics.

Step 1: The government must create millions of good middle class jobs. According to a new report from the Economic Policy Institute, there are almost 6 officially unemployed workers per available job. There's just not enough jobs out there. And if we've learned one thing from the recession, it's that we can't count on businesses to provide the jobs we need. It's up to the government to proactively create good jobs--there's no shortage of things that need to be built or repaired or cleaned, or children to be educated.

If President Obama had used all of the stimulus money on creating permanent, high-quality government jobs, our economy would be in much better shape right now. He can fix his mistake by campaigning for real job creation now. Instead state and local governments are laying off teachers and firefighters. We need to turn this around.

Step 2: Give workers the power to make low-wage service sector jobs into good middle class jobs. The service sector makes up 40% of all jobs now, and will be 95% of all new jobs over the next 10 years. If these don't become good middle class jobs, there will be no middle class in America.

Manufacturing jobs used to be bad jobs, with child labor, 14-hour days, filthy conditions. But workers joined together to fight for their rights, and with the passing of the Wagner Act, they united in huge numbers to transform factory work into good middle class jobs.

We need new labor laws to allow service workers to unite without fear that their employer, whether it's Walmart or Wendy's, Target or Taco Bell, will fire them or cut their hours. These big employers are making record profits during this recession--but it's their employees doing all the hard work to make those profits possible. They need to share those profits with their workers by sitting down at the table and bargaining a contract with them.

Step 3: Enact fair trade policies that ensure higher working standards across the globe. We can't hope for good middle class jobs here when corporations can move those jobs to places with deplorable labor standards. That means a real crackdown on below-poverty wages and child labor in China and Malaysia and wherever capital flows.

Step 4: Create a basic income for all. Our current jobs crisis highlights the tragic flaw in our economy: we all need jobs, but they don't need us. We are too reliant on jobs as our only source of income, making work an all-or-nothing endeavor with very high stakes for ourselves and our families.

With the first three steps we can create some jobs and make some jobs better and create incentives for businesses to provide good jobs, but we can't make a business create jobs if it's not in their interest to do so. As technology improves, there will be more and more work that can be done without employing human beings--yet we still have an economy where everyone has to work at least 40 hours to survive (except the rich few).

Work dominates American life in a way that no other institution besides family does. We spend more than half our waking hours working or commuting to/from work. Some have a good job and are married to it and afraid of losing it. Some have bad jobs and need two or three of them to make ends meet. Many families have multiple people working multiple jobs just to pay the bills. And then of course there's the many many millions who are unemployed.

We need to take work down a notch or two by not having to need it so much.

If every worker had a basic, just-above-poverty level income to start out with, independent from jobs and work, then the need to work would be a little less desperate.

Providing working people with $12,000 a year--$1,000 a month--would truly stimulate the economy and create millions of jobs while providing the kind of economic security that is so clearly lacking now.

For the unemployed it would mean replacing unemployment benefits with income that doesn't run out and doesn't go away if you work. Similarly, for the poor on welfare and foodstamps it means replacing those programs with a basic income that they can always count on and won't lose if they take a $10 an hour job. We could finally stop paying people to not work.

For the working poor it would mean a real safety net that would allow them to work a little less and spend more time with their families if they wanted, or a real boost into the middle class, with newfound opportunities to go to school or get new training.

For the shrinking middle class it would provide stability and economic security and a way to step on the brakes on the great slide out of the middle class. The money could be used for education or investment or simply to spend to stimulate the economy.

By taxing the rich and the Wall St. bankers and oil companies etc. and giving to the rest of us, we can make work a much less depressing situation and remake our economy so that it works for all of us, not just the folks at the top.

 

Wash Post business writer accidentally hits on the biggest problem in American economy

There was this amazing nugget today by Post business columnist Steven Pearlstein:

It is only in the world of Chamber of Commerce propaganda that businesses exist to create jobs. In the real world, businesses exist to create profits for shareholders, not jobs for workers. That's why they call it capitalism, not job-ism. There's no reason to beat up on business owners and executives simply because they're doing what the system encourages them to do.

This bears repeating: "businesses exist to create profits for shareholders, not jobs for workers."

It's a truth that we on the left sometimes ignore, to our own peril.

Our entire economy is set up so that we are reliant on "jobs" as our only source of income, as well as our health insurance, our place in society, our self-image, etc.

We desperately need jobs, but the corporations who control the jobs don't need us. In fact, they are making huge profits now because they have found that they can get along just fine with less workers.

So why is it that we have this irrational economy where so many millions are so reliant on jobs, which are becoming ever more transitory, elusive, and hard to find?

How can working people have any economic security at all when we are so reliant on jobs? How can we fix this problem?

The history of the last 150 years is filled with the struggle between capital and labor, the owners and the workers, over how much of the profits should go to the workers.  How's that been going lately? Private sector union membership in the US is now down to 7% and dropping, and corporations have moved jobs across the globe with impunity, looking for the lowest labor costs.
As more jobs get replaced by technology and businesses figure out how to do more with less workers, working people will continue to come out on the losing end of this battle with business. I wonder if it's the only battle we should be fighting right now.

Maybe we should acknowledge that businesses will always be looking to cut labor costs, and that we'll never have enough power to force them to act otherwise.

Maybe we should accept the nature of capitalism and instead of fighting it, we should find new solutions to get what we want: economic security for all--decent income, affordable health care, a retirement with dignity.

If we can't get those things from private employers, that leaves two options: jobs or income now, to steal the slogan from the 60s.

We could insist on government creating enough good jobs for everyone, a full employment program. This would at least force private businesses to pay employees enough so that they could compete with government for employees.

If businesses don't exist to create jobs for workers, maybe government programs should. There's probably enough work out there to be done, such as cleaning up our cities, repairing our crumbling infrastructure, teaching our children, etc.

A full employment program would cost a fortune, but it would ensure a thriving economy, as all workers would have a decent income, which would stimulate the economy as a whole.

A less expensive and more efficient option would be to just provide income directly to the American people. Just cut out the middle-man and provide every American with enough income to at least get by, and then they would have to work at jobs for whatever income they want on top of their basic universal income.

This approach de-emphasizes "jobs." Instead of dominating American life, jobs could be things that we do to earn extra money, be productive in society, use our talents, and interact with others. If work and jobs become less "all or nothing," then they might be more enjoyable and workers might be more happy.

Either way, it seems like as a society we need to rethink our economy and acknowledge that we can't count on jobs from corporations as our sole means of income anymore.

The job trends of today--massive unemployment, outsourcing, part-time work, using "independent contractors" instead of full-time employees, etc.--will continue to expand in the future.

Corporations are sitting on a huge pile of money--because they are afraid of the state of the economy, which is bad because there are not enough jobs. We're stuck in a vicious cycle, and we can't count on corporations to do the right thing. We can only count on them to do what is best for their bottom line. And if we owned a business, we'd probably do what is best for our bottom line also.

Instead of trying to convince them to create new jobs, or pay their current employees more, maybe we should just have them pay an Economic Security Tax and give that money directly to the American people. Providing the people with a basic universal income would actually help corporations by ensuring a strong consumer base and stimulating the economy, and lead to even greater profits down the road. We've tried trickle-down economics, and it didn't work. Let's try Rise Up Economics instead.

We should use our strength in numbers in the voting booth to create a new kind of economy that establishes economic security for all, outside of the corporate job box that we are stuck in.

We can't change the essential nature of business. But by acknowledging that, we can make other changes that provide working people with a better life and help companies' bottom lines in the long run. We can have an economy that works for everyone, but only if we think outside of the jobs box.

New Jobs Report Shows We Need to Re-work "Work"

The new jobs report is disappointing. Well, what else is new? Here's a reality check: There's not enough jobs for everyone. There never was, and there never will be. The problem is exacerbated now during this deep recession, but there have always been millions of people who can't find work.

We need to re-think the whole concept of having a job, and we need to re-work "work" if we are to win real economic justice in America.

Job losses will only get worse as the 21st Century really gets going. Global capital will continue to move jobs to places on the planet that have the lowest labor costs. Technology will continue to improve, eliminating countless jobs.

The trend toward part time work will continue, as well as treating workers as independent contractors. The days of having one job with one company for the majority of your life are long gone.

Service sector jobs, which account for 77% of all American jobs and 96% of all the jobs that will be created in the next ten years, are mostly bad jobs that don't pay enough to raise a family on, don't provide affordable benefits--and don't even think about retiring.

The real problem seems to be that the nature of jobs and work has been changing over the past 30 years, but we are still stuck in a 20th Century system of work where the vast majority of people are reliant on their jobs for all of their income and most of their benefits.

We desperately need jobs, but they don't need us. Or the corporations that create jobs don't need us. We need to adjust to this fact if we are going to have any semblance of economic justice and equality.

Jobs and work still dominate American life. We need to bring "work" down a notch or two, from an institution that takes up most of our waking hours and our energy, to something that we do less of and need less but still do a lot and still get a lot of satisfaction from.

We need to change work from an all or nothing operation. Right now either you have a job (or two) that provides you with all of your income, or you are on unemployment, where you get a check from the government for not working, and that check stops coming if you get a job.

Instead of that all or nothing, 20th Century system of work, we should establish a basic income--enough to at least get by on, just above the poverty level--for all working people. This basic income would establish an income floor, and we would work for whatever amount of income we want on top of that.

A basic income would provide economic freedom and income security to working people. We'd have to freedom to work less if we wanted to, or work the same amount and save or spend that money.

It would provide a direct stimulus to the economy, which would help create more jobs. More jobs + less of a desperate need for jobs = a reasonable adaptation to our changing global economy.

We could pay for this by eliminating all of the old all or nothing, 20th Century programs like unemployment, welfare, food stamps, section 8 housing, etc., and by making the rich pay their fair share in taxes, taxing carbon pollution, closing loopholes that allow hedge fund managers to be taxed less than their secretaries, etc.

Think of it as the opposite of trickle down economics, where we gave huge tax breaks to the rich and corporations, and cut programs for the rest of us. Rise Up Economics makes the rich pay their fair share, and provides income directly to the rest of us.

Or you could think of it as a trust fund for working people. There could be some requirement to pay into it for 5 years before you're eligible. Or you could do it through the tax system, everyone who has worked and paid taxes for the previous 5 years would be eligible.

Or it could be through Social Security. Instead of paying into it all of your life and only getting some of that money when you're 65, you could start getting that money back after 5 years by lifting the cap on the amount of income that's taxed, and all the aforementioned program cuts and tax increases.

There are plenty of ways to set it up. The bottom line is that we need to change the way our economy is organized to adjust to the changing nature of work and jobs. We can't remain reliant on jobs that either suck or aren't there or won't be there in 20 years.

They don't need all of us to work. We need an economic system where we don't so desperately need their jobs.