From the Harvard Business Review: What So Many People Don’t Get About the U.S. Working Clas

Since last week's election, renewed attention has been paid to this group.

- Click here for the article.

. . . the white working class (WWC) resents professionals but admires the rich. Class migrants (white-collar professionals born to blue-collar families) report that “professional people were generally suspect” and that managers are college kids “who don’t know shit about how to do anything but are full of ideas about how I have to do my job,” said Alfred Lubrano in Limbo. Barbara Ehrenreich recalled in 1990 that her blue-collar dad “could not say the word doctor without the virtual prefix quack. Lawyers were shysters…and professors were without exception phonies.” Annette Lareau found tremendous resentment against teachers, who were perceived as condescending and unhelpful.

Michèle Lamont, in The Dignity of Working Men, also found resentment of professionals — but not of the rich. “[I] can’t knock anyone for succeeding,” a laborer told her. “There’s a lot of people out there who are wealthy and I’m sure they worked darned hard for every cent they have,” chimed in a receiving clerk. Why the difference? For one thing, most blue-collar workers have little direct contact with the rich outside of Lifestyles of the Rich and Famous. But professionals order them around every day. The dream is not to become upper-middle-class, with its different food, family, and friendship patterns; the dream is to live in your own class milieu, where you feel comfortable — just with more money. “The main thing is to be independent and give your own orders and not have to take them from anybody else,” a machine operator told Lamont. Owning one’s own business — that’s the goal. That’s another part of Trump’s appeal.

Hillary Clinton, by contrast, epitomizes the dorky arrogance and smugness of the professional elite. The dorkiness: the pantsuits. The arrogance: the email server. The smugness: the basket of deplorables. Worse, her mere presence rubs it in that even women from her class can treat working-class men with disrespect. Look at how she condescends to Trump as unfit to hold the office of the presidency and dismisses his supporters as racist, sexist, homophobic, or xenophobic.

Trump’s blunt talk taps into another blue-collar value: straight talk. “Directness is a working-class norm,” notes Lubrano. As one blue-collar guy told him, “If you have a problem with me, come talk to me. If you have a way you want something done, come talk to me. I don’t like people who play these two-faced games.” Straight talk is seen as requiring manly courage, not being “a total wuss and a wimp,” an electronics technician told Lamont. Of course Trump appeals. Clinton’s clunky admission that she talks one way in public and another in private? Further proof she’s a two-faced phony.

Manly dignity is a big deal for working-class men, and they’re not feeling that they have it.

From the Financial Times: America’s Middle-class Meltdown: Core shrinks to half of US homes Society splinters as bedrock of postwar economy is ‘hollowed out’

Perhaps this is related to the previous story.

- Click here for the article.

America’s middle class has shrunk to just half the population for the first time in at least four decades as the forces of technological change and globalisation drive a wedge between the winners and losers in a splintering US society.

The ranks of the middle class are now narrowly outnumbered by those in lower and upper income strata combined for the first time since at least the early 1970s, according to the definitions by the Pew Research Center, a non-partisan think-tank in research shared with the Financial Times.

The findings come amid an intensifying debate leading up to next year’s presidential election over how to revive the fortunes of the US middle class.

The prevailing view that the middle class is being crushed is helping to feed some of the popular anger that has boosted the populist politics personified by Donald Trump’s candidacy for the Republican presidential nomination. “The middle class is disappearing,” says Alison Fuller, a 25-year-old university graduate working for a medical start-up in Smyrna, Georgia, who sees herself voting for Mr Trump.

Pew used one of the broadest income classifications of the middle class, in a new analysis detailing the “hollowing out” of a group that has formed the bedrock of America’s postwar success.

The core of American society now represents 50 per cent or less of the adult population, compared with 61 per cent at the end of the 1960s. Strikingly, the change has been driven at least as much by rapid growth in the ranks of prosperous Americans above the level of the middle class as it has by expansion in the numbers of poorer citizens.

Where did the proposal to increase overtime pay come from?

According to the New York Times, it came from an economist - Jared Bernstein - who had worked in the White House as the Chief Economist and Economic Adviser to Vice President Joseph Biden.

Upon leaving wrote a report describing the benefits of increasing the number of people who qualify for overtime pay. His idea was to set the level to where it as in 1975 and inflation-adjust it to today, and keep it set at the level of inflation. They also allow white collar workers - executives - to be eligible for overtime.

- Click here for the report.

Increasing overtime pay fits within the overall goals of increasing middle class incomes.

Liberal interest groups have been pushing this proposal for some time. Their arguments can be sumarized here:

- fixoverime.org.
- What the New Proposed Overtime Rules Mean for Workers.

For more:

- Obama's new overtime rules: How they'd work and who they'd affect.
- One Industry That Will Hate Obama’s New Overtime Rules: The Media.
- Republicans will hate Obama’s new overtime rule, but they can’t do anything about it.

From the National Journal: THE EMERGING REPUBLICAN ADVANTAGE The idea of an enduring Democratic majority was a mirage. How the GOP gained an edge in American politics—and why it’s likely to last.

The author argues that Republicans have been able to lure away members of the middle class.

- Click here for the article.

American parties routinely go through periods of ascendancy, decline, and deadlock. From 1896 to 1930, the Republican Party reigned supreme; from 1932 to 1968, the New Deal Democrats dominated; following a period of deadlock, the Reagan Republicans held sway during the 1980s. After the parties exchanged the White House, Democrats appeared to take command of American politics in 2008. In that election, Obama and the Democrats won not only the White House but also large majorities in the Senate and House, plus a decided edge in governor's mansions and state legislatures.

At the time, some commentators, including me, hailed the onset of an enduring Democratic majority. And the arguments in defense of this view did seem to be backed by persuasive evidence. Obama and the Democrats appeared to have captured the youngest generation of voters, whereas Republicans were relying disproportionately on an aging coalition. The electorate's growing ethnic diversity also seemed likely to help the Democrats going forward.

These advantages remain partially in place for Democrats today, but they are being severely undermined by two trends that have emerged in the past few elections—one surprising, the other less so. The less surprising trend is that Democrats have continued to hemorrhage support among white working-class voters—a group that generally works in blue-collar and lower-income service jobs and that is roughly identifiable in exit polls as those whites who have not graduated from a four-year college. These voters, and particularly those well above the poverty line, began to shift toward the GOP decades ago, but in recent years that shift has become progressively more pronounced.

The more surprising trend is that Republicans are gaining dramatically among a group that had tilted toward Democrats in 2006 and 2008: Call them middle-class Americans. These are voters who generally work in what economist Stephen Rose has called "the office economy." In exit polling, they can roughly be identified as those who have college—but not postgraduate—degrees and those whose household incomes are between $50,000 and $100,000. (Obviously, the overlap here is imperfect, but there is a broad congruence between these polling categories.)

The defection of these voters—who, unlike the white working class, are a growing part of the electorate—is genuinely bad news for Democrats, and very good news indeed for Republicans. The question, of course, is whether it is going to continue. It's tough to say for sure, but I think there is a case to be made that it will.

Is the decline in manufacturing job pay tied into the decline of unions?

Something to think about as we begin discussing factions and their impact on public policy. Union membership is the lowest its been in almost 100 years, and middle class wages have stagnated for 30 years. Some suggest this is no coincidence.

Story in Wonkblog. Nice Graphic below:

From the Pew Center: A Third of Americans Now Say They Are in the Lower Classes

Since the financial crash, people have downgraded their perceived status, and view life as tougher for members of the lower class.

Click for the study here.

Click here for comments on an additional study regarding attitudes about the rich.

The Rise of Oligarchy in the US?

Will the information age be oligarchic? An increasing number of commentators think it will. Perhaps the middle class was unique to the industrial age. What might this mean for governance in the US?

- Libertarians For Oligarchy?

- What If Middle-Class Jobs Disappear?

- Texans for Oligarchy

More on the stagnant middle class

Its quite the theme. Here's the latest from the Atlantic. They point to a study showing again that family incomes have dropped over the past 35 years and point out the impact this is likely to have on children:

"Think of lining up every single child in the country by their family's earnings and look at the 50th percentile. That child is being raised in family that has seen no income growth in the last 35 years. And every child behind him has seen income declines," said Michael Greenstone, director of the Hamilton Project.

That striking statement can be summed up in this graph that shows real family earnings falling by more than a fifth for families in the 15th percentile, even as family fortunes have nearly doubled for the 99th percentile since 1975.

This isn't just a story about parents' falling fortunes. It is, in fact, all about the kids. "Our parents' education levels and employment situation have implications that extend far into adulthood," Greenstone and Adam Looney write in a report shared exclusively with The Atlantic that will go live on the Hamilton Project site later today. For example, the best indicator for whether a teenager goes on to college is that his parents went to college.

From The American Conservative: Flat-Lining the Middle Class

Cheery news:

. . . . 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.

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.”

From John Sides: Social Status and How the Elected Vote

This is a terrific - if disturbing - post:

John Edwards’s $400 haircut. Senator John McCain’s apparently uncountable houses. President Obama’s vacation in Martha’s Vineyard. Most recently, Mitt Romney’s home renovations. These things suggest that many, if not most, politicians at the federal level come from the upper social classes. Certainly they are much wealthier than the average American. But does the social class of elected leaders actually affect how they vote?
Nicholas Carnes, a political scientist at Duke University, finds that it does. In this forthcoming paper, he studied the connection between the occupational backgrounds of members of Congress from 1901 to 1996 and their voting behavior. Occupational backgrounds have proven to be stronger predictors of many political attitudes than other markers of class, like education and income. (The data he draws upon are here.) He uses a simple seven-category typology: farm owners, businesspeople, other private-sector professionals (like doctors), lawyers, politicians, service-based professionals (like teachers), and workers (industrial, farm and union).

As one might imagine, people from working-class backgrounds were only a small minority during this period. In fact, except for the growing representation of politicians at the expense of lawyers — a shift that derives in part from changes in how the data was coded rather than anything substantive — the occupational backgrounds of members of the House have been remarkably stable.
For both 2301 and 2302 - we ought to consider what this means for the quality of representation in the US.

More Bad News About the Middle Class

From the Atlantic:

The solutions to the middle class stagnation are controversial. Liberals reject the stand-back-and-wait strategy, conservatives veto more government intervention and libertarians balk at industrial policy. We don't know the right medicine for what ails middle America.

What we know is that the economy is growing on two levels: high-paying jobs that require lots of expensive education, and low-wage local service jobs that don't. Middle class workers are becoming a commodity replaceable by technology or off-shoring. Without new industries to support their skills or new skills attained by more training, there's no reason to expect the hollowing out of the middle class to end.

An Emerging Class War?

As we approach Federalist #10, and a discussion of the conflict between various interests in society, its worth looking at comments regarding the increasing gap between the haves and have-nots in American society. The middle class seems to be losing out the most. Will we see increased conflicxt as time progresses?

The U.S.-based CEO of one of the world’s largest hedge funds told me that his firm’s investment committee often discusses the question of who wins and who loses in today’s economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn’t really matter. . . . (emphasis added)

I heard a similar sentiment from the Taiwanese-born, 30-something CFO of a U.S. Internet company. A gentle, unpretentious man who went from public school to Harvard, he’s nonetheless not terribly sympathetic to the complaints of the American middle class. “We demand a higher paycheck than the rest of the world,” he told me. “So if you’re going to demand 10 times the paycheck, you need to deliver 10 times the value. It sounds harsh, but maybe people in the middle class need to decide to take a pay cut.”