Posted by: coastcontact | September 7, 2013

Saying Goodbye to the Middle Class

In 1914, Henry Ford started an industrial revolution by more than doubling wages to $5 a day—a move that helped build the U.S. middle class and the modern economy. After World War II the return of the GIs and the benefits they received prompted an educated society that wanted homes and cars.   Union jobs with good benefits along with little competition from other nations made the United States into an industrial power house that lasted for decades.

Then big business realized that there was an opportunity to save money by outsourcing the manufacture of the things we buy.  The government accommodated those businesses by negotiating free trade agreements with many nations.  Communications with the entire world became easier and cheaper.

People in the poorest nations of the world could be trained to operate the machines that made things Americans want to buy.  They would work for one fourth the rate of pay or less than American workers.

Today my computer, television, home theater, camera, and my clothes are all made in another country.  The people who used to make those things are now either unemployed or working in low paid service jobs (tourism, retail, fast food, and other jobs that pay less than $15 an hour).  The middle management jobs are now part of those outsourced functions.  Call the help line for Earthlink or Hewlett-Packard and you will be speaking to someone in India or the Philippines.

“A middle-age middle manager who was laid off is not going to be miraculously rehired in that position or anything like it. Same with the factory worker and the receptionist and the copy editor. They’re finished. Many of the people who held those positions have already pulled out of the workforce and others are moving into different jobs (often at lower pay levels)” writes Mark Lacter on LA Observed.

Do not look for Congress or any government agency to solve this problem.  They have no solutions.

Those desperate people who have taken jobs that pay half of what they previously earned are no longer part of the middle class.  Those that have not obtained any job at this point are living on their accumulated wealth.  Neither of those groups will be spending money as they had in the past.  Thus the bifurcated economy of the wealthy and the poor.  This means the end of the middle class in America.  That is the big picture.

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Responses

  1. Very well said. I do believe that the government does have the ability to intercede by raising the min wage to a livable wage, using tariffs for the products that are outsourced and by using the corporate tax to penalize those that outsource(now they are rewarded) and by penalizing those corporations that continue to give all the profit to the overpaid and bloated CEO’s. Those are all things that the government can and should do. One more thing to think about is these two new trade agreements being worked on in secrecy. Please join me in emailing and calling your DC rep and senators and urging them to not ‘fast-track’ these agreements. If we are to have trade agreements then they must be in favor of the people and not give corporations ‘sovereign entity’


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