Labor Day 2011

If our civic holidays were still the civic holidays they were created to be – as opposed to being just opportunities for shopping or other diversions – then this Labor Day would be a sad holiday indeed. In the current economy, a day devoted to the well-being and progress of the American worker would have to be observed more appropriately as a Day of National Mourning. Young people trying to enter the labor force today have no contrary experience and may automatically assume their opportunities will be fewer and their standard of living less than those of their parents, but it was not always so. And, if it was not always so, then it need not have become so either!

As a “Baby Boomer,” who grew up in that great post-World War II quarter century or so of unprecedented nation-wide across-the-board prosperity, I know that the present era of increasing economic inequality and the progressive deterioration of American middle class life is not how it used to be and not how it had to be. Around the time I was born, the top 1%’s share of national income was about 12-13%. It more or less kept declining until it reached an all-time low of 8.9% in 1976, after which it started rising again to the point where we are now virtually tied with 1928 (the year before the Great Depression) when the top 1%’s share peaked at 23.9%. During what former Secretary of Labor Robert Reich has called “The Great Prosperity,” American workers’ wages and productivity rose in tandem. Over the last 30 years, however, the period Reich labels “The Great Regression,” productivity has continued to rise, while wages have stagnated.

One of the classical axioms of traditional political theory is how non-authoritarian political arrangements generally presuppose and seem almost to require a relative equality among citizens. While some degree of inequality is inevitable and may even be desirable, inequality is only desirable within certain limits, beyond which the moral foundation of society falters. Modern liberal political theory (e.g., John Rawls) attempted to delineate what degree of inequality and its attendant consequences would be consistent with liberal democratic legitimacy. By those standards, our society is certainly in bad shape.

An economic theorist like Reich argues (as he did again in yesterday’s NY Times Sunday Review) that a revival of our economy must also presuppose progress on the equality front, for our stagnant middle class can no longer spend enough to generate sufficient demand. Augmenting the purchasing power of the middle class, he argues, is essential for further economic growth.

While all these points seem obvious enough, what remains lacking is any semblance of political will to reverse this depressing situation. While we now can clearly see the results of the policies of the past 30+ years (going back to the initial de-regulation moves of the Carter Administration), as a society we are hopelessly divided – a division that is both reflected in and exacerbated by the polarization among our competing political elites. On one side are elites eager to continue and expand policies aimed at increasing inequality. Besides genuine free-market and libertarian ideologues, they include those whose private interest has benefited (to the detriment of the common good) from such policies as low marginal tax rates for those at the top of the income scale. They also rely for political support on others, who, while not benefitting directly from increasing economic disparities, have come to identify the proponents of such policies because of their overriding moral and cultural concerns. On the other side are elites who see the situation for what it is and can appreciate the arguments for trying to stimulate the economy by policies favorable to diminishing income inequality. Such elites, however, have also largely identified themselves with (or at least have become identified with) a complex collection of moral and cultural values increasingly alien to those of many ordinary Americans. Adherence to this rigid set of secular moral and cultural values increasingly defines the politics of what now passes for “liberal” or “progressive.” The fact that they themselves tend to be among the more privileged classes further gets in the way of any ability to identify with the concerns of ordinary Americans. Thus, arresting the decline of the middle class just can’t get the same traction among “liberal” or “progressive” elites as their social class’s aggressively secular moral and cultural agenda.

Meanwhile, the economy continues to atrophy, and more and more people are increasingly worse and worse off, while hope in the future (once the hallmark characteristic of American culture) is withering.