I am reminded of a song favorite from Tennessee Ernie Ford titled Sixteen Tons. The lyrics tell the tale of a coal miner who loads a record amount of number nine coal and finds himself deeper in debt.
“You load sixteen tons, what do you get?
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store”
The company store reference was to the employer-provided store where the “captive audience” of workers shopped exclusively out of necessity. Workers were often paid in a company-issued script that was only good at such a store. The company also provided housing and charged rent. Before the advent of unions, such exploitation of workers being paid wages below subsistence levels could keep employees in perpetual debt. Today things are slightly different.
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| Tennessee Ernie Ford |
The company towns and company stores mentioned above were prevalent in the 1880s and lasted until the mid-1930s. After WW2, the U.S. enjoyed a great period of economic growth that lasted from about 1945 through the early 60s. This was the period of my youth. It was a great time for the middle-class as America established itself as the world’s richest country. Our GNP more than doubled during this period. There was a baby boom, a housing boom, and affordable mortgages were available for returning servicemen. With the advent of television, the Nelson family moved from radio to the tiny screen.
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| Ozzie, Harriet, David, and Ricky (Eric) |
Ozzie and Harriet Nelson had two children, David and Ricky. This was a typical middle-class family of four. Ozzie went to his white-collar job with a briefcase and Harriet was a homemaker who looked after the boys. Ozzie’s job was a mystery and it didn’t play a role in the television version. In the 1952 film, Here Come the Nelsons, Ozzie was in women’s underwear. Perhaps that occupation would have been too delicate for the strict television censors of the day. We visited the Nelsons once a week from 1952 until 1966.
In 1960, the median income was $5,700, which was a 4% increase over the previous year. The minimum wage in 1960 was $1.00 hr. Fifty years later, in 2011, the minimum wage was $7.25 hr. Adjusted for inflation, the 1960 hourly wage would be worth $6.65 hr. in 2011 dollars. So, in half a century the hourly minimum wage increased by only $ 0.60. That works out to a 9% raise in fifty years. As with all statistics, you can find specific figures elsewhere that differ from these, but all of the charts, tables, and analyses that I visited painted the same grim picture where low and middle-income people are not much better off than they were even ten years ago. In the chart below published by the Congressional Research Service (CRS) that claims to have been in business since 1914 advising Congress, the picture for all but the top 10% of our nation has been bleak.
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| Wage Trends Adjusted for Inflation; Vertical grey bars are recessions |
One part of the CRS report stated that while more individuals in the job market had bachelor's or advanced degrees, that alone was not enough to raise overall wages. In the above chart, I only included the overall statistics but, as most of us will acknowledge, the picture for women and minorities is worse than the average shown.
While wages, purchasing power, and full employment are key factors when examining the fate of middle-class America, upward mobility or the chance thereof is also of extreme importance. There will always be a middle-class since someone will always be in the median strata of the income market but it is the lack of any chance to better your position that cripples motivation. The middle-class will not just die-out and join the poor but they will end up as financial zombies trudging along just trying to make ends meet.
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| Working Class Zombies Walking to Dead-End Jobs |
It has become harder to get a really meaningful education as evidenced by the recent scandals of celebrities bribing university staff to gain admittance to top-ranked schools. Anyone who can through grades, athletic ability, or other means get into a highly rated school, will likely face crippling debt for a major portion of their greatest earning years.
What role does capitalism play in all of this you might ask? Well, we are a capitalistic society and have been since our inception. There is nothing inherently wrong with that. If, as conceptualized in our constitution, we were a society where education and hard work were all that was required to become a success and have the ability to better our station in life, America would truly be the utopia envisioned by our founding fathers. This assumes a level playing field where everyone plays by the same set of rules. Even Stevie Wonder can see that this is not the case. There are at least two rulebooks in play here. One set of rules was written by the wealthy for the wealthy and one was written by the wealthy for everyone else.
I will use Donald Trump as an example. No, he is not the one to blame for all of this; he is just typical of the problem. I just started watching a Netflix series titled “Trump: An American Dream,” covering much of the life of our president. It provides a glimpse into the rarified atmosphere that is The Donald. I’ve gotten through the first episode of this 4-part series and found it to be balanced with both supporters and detractors. I mention it here only in that it typifies the entitled attitude of the wealthy. Donald Trump plays by the rule book written for him and by him.
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| Netflix: Trump, An American Dream |
We see in this first episode much of the 1977 development of The Grand Hyatt Hotel and how Trump, and we will assume many of the wealthy, take their share of the pie out of your share of the pie. He was able to get the City of New York (read taxpayers) to finance a major portion of the project with a 40-year tax exemption. As of 2016, this tax break had cost the city $360 million while the gross operating profits were amounting to $30 million a year; all of this on a property that cost only $120 million to build. Therefore, the New York taxpayers are paying their taxes to run the city that provides the wherewithal for Mr. Trump to make an obscene profit. We won’t go into the fact that Trump used political pressure and an unsigned option agreement with the city to push the development through.
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| Rendering of New Hyatt Regency with $400 million tax break |
By 2016, Trump had used tax breaks, grants, and incentives to benefit 15 buildings in Manhattan to save him $885 million. Taxpayers are subsidizing the lifestyles of the rich and famous. This is not an indictment of Donald Trump but merely an example of the corrupt system that is the core of our problem; an unlevel playing field for the rich. Capitalism runs amok.
Capitalism is not inherently bad or evil but the greedy captains of industry and government make it so. More is never enough. Social programs, general education, infrastructure, healthcare, and the like are but inconvenient drains on their potential profits. This corrupt group of individuals will try to convince the general public that rising stock prices and better unemployment figures mean that their lot in life is rosy.
The “working class” is defined as a social group who work for hourly wages, generally doing manual or industrial work. Many in this group in years past were included in the middle-class. The working class is in need of refinement through education and job training. Proper assessment of their current skills and abilities would help guide the necessary curriculum for the required training. Due to the rapid advances in technology and the fast demise of many jobs in the retail environment, job training and a shift in education priorities will be essential if this group is to survive.
Our world is rapidly changing. Ozzie and Harriet, David and Ricky are all dead now. Their TV show lasted 14 years and, as of 2017, held the title for the longest-running live-action sitcom. In 1960, the average family size was 3.29 persons and a single wage earner provided all the income. In 2019, the average family is 2.6 people and two of those are likely to be employed. The Nelson family owned a single-family home while the typical family today can barely afford the rent. The shift in power from labor to business has been a boon for business but might be sounding the death knell for the American worker. As technology and automation reduce the numbers of unskilled jobs, small towns and small businesses seem likely to follow the Nelsons into oblivion.
I can’t say that Democrats are the answer to this situation since they have shared leadership in probably half of the period discussed above. How successful any politician can be in this atmosphere of unbridled capitalism remains to be seen. We need drastic changes in our tax systems to provide some equity in the burden. This is not redistribution in wealth but a leveling of the playing field. We need full access to both higher education that is structured on community needs and job training for a workforce out of touch with the current economy. We need to address our crumbling infrastructure, which will provide at least some stopgap employment for unskilled and semi-skilled labor. We, as a long-term goal, need universal healthcare. Universal healthcare should be phased in so as to not immediately displace the competing healthcare plans that have been negotiated by contracts. Any politician, regardless of party, who works with these goals in mind, has my vote.
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