Flat-Lining the Middle Class: Economic Numbers to Die For
Food pantries
picked over.
Incomes drying up. Shelters bursting with the homeless. Job seekers
spilling out the doors of employment centers. College grads
moving back in with their parents. The angry and disillusioned filling the streets.
Pan your camera from one coast to the other, from city to suburb to farm and back again, and you'll witness scenes like these. They are the legacy of the Great Recession, the Lesser Depression, or whatever you choose to call it.
In recent months, a blizzard of new data, the hardest of hard
numbers, has laid bare the dilapidated condition of the American
economy, and particularly of the once-mighty American middle class. Each
report sparks a flurry of news stories and pundit chatter, but never
much reflection on what it all means now that we have just enough
distance to look back on the first decade of the twenty-first century
and see how Americans fared in that turbulent period.
And yet the verdict couldn’t be more clear-cut. For the American
middle class, long the pride of this country and the envy of the world,
the past 10 years were a bust. A washout. A decade from hell.
Tomgram: Andy Kroll, America's Lost Decade
In some ways, Zuccotti Park, the campsite, the Ground
Zero, for the Occupy Wall Street protests couldn’t be more modest.
It’s no Tahrir Square, but a postage-stamp-sized plaza at the bottom of
Manhattan only blocks from Wall Street. And if you arrive before
noon, you’re greeted not by vast crowds, but by air mattresses, a sea
of blue and green tarps, a couple of information tables, some
enthusiastic drummers, enough signs with slogans for anything you care
to support (“Too big to fail is too big to allow,” “The American Dream:
You have to be asleep to believe it,” “There’s no state like no state,”
etc.), and small groups of polite, eager, well-organized young people,
wandering, cleaning, doling out contributed food, dealing with the
press, or sitting in circles on the concrete, backpacks strewn about,
discussing. If it were the 1960s, it might easily be a hippie
encampment.
But don’t be fooled. Not only does the park begin to fill fast and
the conversation become ever more animated, but this movement already spreading across the country (and even globally)
looks like the real McCoy, something new and hopeful in degraded
times. Of the demonstrators I spoke with, several had hitchhiked to New
York -- one had simply quit her job -- to be present. Inspired by Tunisians, Egyptians, Spaniards, and Wisconsinites,
in a country largely demobilized these last years, they recognized
what matters when they saw it. As one young woman told me, “A lot of
people in my generation felt we were going to witness something really
big -- and I think this is it!”
It may be. The last time we saw a moment like this globally was 1968. (Other dates, like 1848 in Europe and 1919
in China, when the young took the lead in a previously dead world, also
come to mind.) It’s the moment when the blood stirs and the young,
unable to bear the state of their country or the world, hit the streets
with the urge to take the fate of humankind in their own hands.
It’s always unexpected. No one predicted Tahrir Square. No one
imagined tens of thousands of young Syrians, weaponless, facing the
military might of the state. No one expected the protests in
Wisconsin. No one, myself included,
imagined that young Americans, so seemingly somnolent as things went
from bad to worse, would launch such a spreading movement, and -- most
important of all -- decide not to go home. (At the last demonstration I
attended in New York City in the spring, the median age was probably
55.)
The Tea Party movement has, until now, gotten the headlines for its
anger, in part because the well-funded right wing poured money into the
Tea Party name, but it’s an aging movement. Whatever it does, in pure
actuarial terms it's likely to represent an ending, not a beginning.
Occupy Wall Street could, on the other hand, be the beginning of
something, even if no one in it knows what the future has in store or
perhaps what their movement is all about -- a strength of theirs, by the
way, not their weakness.
It’s true, as many have pointed out,
that they don’t have a list of well thought out demands, but the
demand to have such a list is just their elders trying to bring them to
heel. The fact is, they don’t have to know
just what they’re doing, any more than a writer or filmmaker has to
understand the book being written or the film shot. It’s not a
necessity. It’s not the price of admission. If there’s one thing
that’s obvious and heartening, as my friend, the novelist
Beverly Gologorsky, said to me while we oldsters circumnavigated the
park, “The overwhelming feeling I have is that no one here is planning
to go home any time soon.”
Never have they been more needed. Theirs is certainly a movement,
like the ones in the Middle East, inspired in part by economic disaster
and aimed at an airless political as well as corporate/financial system
controlled by the 1% left out of the signs in the park hailing the 99%
of Americans whom Occupy Wall Street hopes to represent. It’s a world
set on screwing just about everyone in that vast cohort of Americans
without compunction, shame, or even, these days, plausible deniability.
The young face a failing world -- and if you want the proof of just
how thoroughly it's failed all of us in recent years, check out TomDispatch Associate Editor
Andy Kroll’s post today. Nowhere else can you find assembled such a
range of evidence of an American world on the decline, one which doesn’t
work and shows no sign of being capable of righting itself.
If, on a planet in crisis, their government has repeatedly failed
them, the Wall Street demonstrators deserve a small, hopeful cheer for
their efforts. They may not be the perfect size and shape for the
movement of everyone’s dreams, but they’re here and, right now, that
says the world. Tom
Flat-Lining the Middle Class:
Economic Numbers to Die For
by Andy Kroll
Paychecks shrank. Household wealth melted away like so many
sandcastles swept off by the incoming tide. Poverty spiked, swallowing
an ever-greater share of the population, young and old. "This is truly a
lost decade," Harvard University economist Lawrence Katz said of
these last years. "We think of America as a place where every
generation is doing better, but we're looking at a period when the
median family is in worse shape than it was in the late 1990s."
Poverty Swallows America
Not even a full year has passed and yet the signs of wreckage
couldn’t be clearer. It’s as if Hurricane Irene had swept through the
American economy. Consider this statistic: between 1999 and 2009, the net jobs gain in the American workforce was zero. In the six previous decades, the number of jobs added rose by at least 20% per decade.
Then there's income. In 2010, the average middle-class family took home $49,445, a drop
of $3,719 or 7%, in yearly earnings from 10 years earlier. In other
words, that family now earns the same amount as in 1996. After peaking
in 1999, middle-class income dwindled through the early years of the
George W. Bush presidency, climbing briefly during the housing boom,
then nosediving in its aftermath.
In this lost decade, according to
economist Jared Bernstein, poor families watched their income shrivel
by 12%, falling from $13,538 to $11,904. Even families in the 90th
percentile of earners suffered a 1% percent hit, dropping on average
from $141,032 to $138,923. Only among the staggeringly wealthy was this
not a lost decade: the top 1% of earners enjoyed
65% of all income growth in America for much of the decade, one hell of
a run, only briefly interrupted by the financial meltdown of 2008 and
now, by the look of things, back on track.
The swelling ranks of the American poor tell an even more dismal story. In September, the Census Bureau rolled out
its latest snapshot of poverty in the United States, counting more than
46 million men, women, and children among this country's poor. In other
words, 15.1% of all Americans are now living in officially defined
poverty, the most since 1993. (Last year, the poverty line for a family
of four was set at $22,113; for a single working-age person, $11,334.) Unlike in the lost decade, the poverty rate decreased for much of the 1990s, and in 2000 was at about 11%.
Even before the housing market imploded, during the post-dot-com-bust
years of “recovery” from 2001 to 2007, poverty figures were the worst
for any recovery on record, according to Arloc Sherman, a senior researcher at the Center on Budget and Policy Priorities. The Brookings Institution, meanwhile, predicts that the ranks of the poor will continue to grow steadily during the years of the Great Recession, which officially began in December 2007, and are expected to reach 50 million by 2015, almost 10 million more than in 2007.
Hitting similar record highs are the numbers of "deep" poor, Americans living way
below the poverty line. In 2010, 20.5 million people, or 6.7% of all
Americans, scraped by with less than $11,157 for a family of four --
that is, less than half of the poverty line.
The ranks of the poor are no longer concentrated in inner cities or
ghettos in the country’s major urban areas as in decades past. Poverty has now exploded
in the suburbs. Last year, more than 15 million suburbanites -- or
one-third of all poor Americans -- fell below the poverty line, an
increase of 11.5% from the previous year.
This is a development of the last decade. Those suburbs, once the
symbol of by-the-bootstraps mobility and economic prosperity in America,
saw poverty spike by 53% since 2000. Four of the ten poorest suburbs
in America -- Fresno, Bakersfield, Stockton, and Modesto -- sit side by side
on a map of California's Central Valley like a row of broken knuckles.
The poor are also concentrated in border towns like El Paso and
McAllen, Texas, and urban areas cratered by the housing crash like Fort
Myers and Lakeland, Florida.
The epidemic of poverty has hit minorities especially hard. According to
Census data, between 2009 and 2010 alone the black poverty rate jumped
from 25% to 27%. For Hispanics, it climbed from 25% to 26%, and for
whites, from 9.4% to 9.9%. At 16.4 million, more children now live in
poverty than at any time since 1962. Put another way, 22% of kids
currently live below the poverty line, a 17-year record.
America’s lost decade also did a remarkable job of destroying the wealth of nonwhite families, the Pew Research Center reported
in July. Between 2005 and 2009, the household wealth of a typical black
family dropped off a cliff, plunging by a whopping 53%; for a typical
Hispanic family, it was even worse, at 66%. For white middle-class
households, losses on average totaled “only” 16%.
Here's a more eye-opening way to look at it: in 2009, the median
wealth for a white family was $113,149, for a black family $5,677, and
for a Hispanic family $6,325. The second half of the lost decade, in
other words, laid ruin to whatever wealth was possessed by blacks and
Hispanics -- largely home ownership devastated by the popping of the
housing bubble.
The New Lost Decade
As for this decade, less than two years in, we already know that the
news isn't likely to be much better. The problems that plagued Americans
in the previous decade show little sign of improvement.
Take the jobs market. Tally the number of jobs eliminated since the
recession began and also the labor market's failure to create enough
jobs to keep up with normal population growth, and you're left with an 11.2 million jobs deficit,
a chasm between where the economy should be and where it is now.
Filling that gap is the key to any recovery, but to do so by mid-2016
would mean adding 280,000 jobs a month -- a pipe dream in an economy
limping along creating
an average of just 35,000 jobs a month for the past three months.
Unless the country's jobs engine were somehow jump-started, 11.2 million
jobs in this decade would be a real stretch.
But few in Congress, and none of the controlling Republican
politicians, will even think about using the jumper cables. President
Obama's relatively modest American Jobs Act, for instance, was declared a
corpse on arrival at the House of Representatives. On Monday, a
reporter asked House Majority Leader Eric Cantor (R-Va.), "The $447
billion jobs package as a package: dead?" Yes, Cantor assured him,
indeed it was.
The president and his administration watch despondently from the
other end of Pennsylvania Avenue. And for the majority of Americans, a
jobless “recovery” exacts an ever-greater toll on their earnings, their
families, their health, their basic ability to make ends meet.
The question on many economists' minds is: Will the U.S. slump into a
double-dip recession? But for so many Americans living outside the
political and media hothouses of Washington and New York, this question
is silly. After all, how can the economy tumble back into recession if
it never left in the first place?
No one can say for certain how many years will pass before America
regains anything like its pre-recession swagger -- and even then,
there's little to suggest that the devastating effects of the middle
class's lost decade won’t have changed this country in ways that will
prove permanent, or that the gap between the wealthy and everyone else
will do anything but increase in good times or bad in the decade to
come. The deep polarization between the very rich and everyone else has
been decades in the making and is a global phenomenon. Reversing it could be the task of a lifetime.
In the meantime, the middle class has flat-lined. Life support is
nowhere close to arriving. One lost decade may have ended, but the next
one has likely only begun.
Copyright 2011 Andy Kroll
