Wednesday, April 14, 2021

The Middle Class’s Slow Ascent and Swift Decline By Christopher R. Moore (Change is both bad and good! - CL)

During the mid-14th Century, the Black Plague ravaged Europe, killing up to half the population by some estimates.  Urban centers were hardest hit, but the plague didn’t discriminate -- rich and poor, nobles and peasants all suffered.

Calamities of that magnitude inevitably lead to big changes.  But, like the trade routes opened by Genghis Khan, the long-term societal consequences of the Black Death were not all necessarily bad. 

Because the continent held fewer people after the plague’s devastation, labor was in short supply.  A limited labor supply meant that workers had greater bargaining power and could command higher wages.  Frustrated rulers enacted laws capping worker pay, but those laws were widely ignored.  Local landowners needed work done and were willing to pay more to entice laborers away from other employers. 

With higher wages enabling savings, frugal European peasants gradually turned into a budding middle class.  Long-sighted parents invested in educating their children, which enhanced the next generation’s earning potential.  Land ownership, previously limited to the Church and nobility, became an achievable goal for common people.

An economically empowered middle class could assert itself politically, employing financial strength as negotiating leverage.  Over time, non-nobles secured recognized rights and, eventually, a say in government.  Autocracies became constitutional monarchies that became republics. 

As horrific as the Black Death was, most people agree that reduced social, political, and economic inequality is good. 

But what if you disagreed?

What if you felt secure enough in your position within the ruling class to view greater socio-political equality as a bad thing?  If you were an aspiring oligarch, for instance, what lessons might you extract from the long-term consequences of the Black Plague?

For starters, you might wonder if the process works in reverse.  If a limited labor supply reduces inequality by allowing workers greater bargaining power, then it would make sense that policies that leave laborers and tradesmen with less bargaining power would increase economic and political inequality.  That is, if you sit atop the societal heap and want to be even further distanced from the hoi polloi, you might reduce the working class’s leverage by flooding the labor market with more workers.

Interestingly enough, this isn’t too far off from what we see with modern American immigration policy.  The ruling-class “Establishment” has, over the last half-century, consistently pushed for ever-increasing immigration as a means of expanding the labor supply.  Corporate moneymen want lower payrolls, and the political class wants a slice of that corporate money.  Even the party that once represented labor (or at least pretended to) backs mass migration for the steady stream of malleable future voters.

While this has been occurring, ordinary citizens have remained more skeptical of large-scale immigration.  Because voters at least theoretically have a say in governance, you can’t just tell the citizenry that mass immigration is needed because the ruling class wants to enhance its wealth and political power.   

So, instead of openly stating their intentions, the establishment makes it a question of morality, rather than economics or civics.  We’re a “nation of immigrants” with an ethical duty to welcome all comers -- just look at the poem on the Statute of Liberty, after all.  And, besides, if you have any reservations about mass immigration, you must be racist and xenophobic. 

This arrangement has been very fruitful for the ruling class, causing a dramatic increase in economic inequality since the 1965 overhaul of the U.S. immigration system.  The middle class’s share of total national income has dropped by one-third, while its share of total wealth went from 32 to 17 percent -- a little over half the prior level.  And those figures are pre-COVID -- the current gaps have almost certainly widened.

At the same time, population growth and a ballooning dollar supply have led to inflated real estate prices.  The average American home now costs a full $100,000 more than if home prices had simply kept up with inflation over the past 50 years.  Working-class wages haven’t kept pace, and more and more young adults are priced out of the market, as wealth inequality increases from one generation to the next.  High home prices even discourage some young people from starting families at all. 

When public policy favored domestic workers, U.S. companies would train new employees to do the jobs the businesses needed.  Today, the would-be aristocrats running Walt Disney’s company demand soon-to-be unemployed American workers train their lower-paid foreign replacements

The economic and political decline of the American middle class has been an unheralded catastrophe.  COVID-19 hastened the process, but no plague or epidemic bears the blame.  The true culprit is a perfidious establishment who no longer feel any sense of responsibility or loyalty toward their countrymen -- and public policies designed to further empower the already powerful.

Christopher R. Moore is a writer and lawyer from West Virginia.