fear that if things don’t change—and in a big way—we may find ourselves working at Walmart or McDonald’s or Dunkin’ Donuts for minimum wage.
We are fast becoming a nation collectively waiting for the next shoe to drop.
Washington is filled with talk about national security: troop levels, airport screenings, Pentagon bud gets, and terrorist threats. But there is another kind of national security: the one that keeps us feeling confident that the economic rug isn’t going to suddenly be pulled out from under us, and that our way of life isn’t going to suddenly implode—the kind of national security that gives us hope for the future. For that national security, especially when it comes to America’s middle class, the threat level has definitely moved from yellow (“elevated”) to orange (“high”)—and we are afraid that red (“severe”) is looming up ahead.
For more and more of its citizens, America has become a national insecurity state.
THE BROKEN BACKBONE OF AMERICA
In 1835, Alexis de Tocqueville published Democracy in America, his observations on the nature of our country. The opening line speaks volumes: “Amongst the novel objects91 that attracted my attention during my stay in the United States, nothing struck me more forcibly than the general equality of condition among the people.”
Looking across the vast expanse of this developing country, the thing that most drew his attention was a vision of America as a level playing field, a place where the same rules applied to everyone. “Democratic laws,” he noted,92 “generally tend to promote the welfare of the greatest possible number; for they emanate from the majority of the citizens, who are subject to error, but who cannot have an interest opposed to their own advantage.”
America’s enlightened elites have always understood that their long-term well-being and security depended on the middle and lower classes having an equal stake in the nation’s prosperity and political institutions. They knew that this great democratic experiment would be defined not by breeding or religion or language, but by a unifying idea—“All men are created equal”—and by an ideal: the good of the many outweighs the good of the few. E pluribus unum. Out of many, one. In the infancy of our nation, Tocqueville saw the power of this idea and its centrality to the American experiment.
He traveled across America before the industrial revolution transformed the country. Once it did, manufacturing jobs helped turn the working poor into middle-class Americans, liberating them from the shackles of a hand-to-mouth existence and moving them closer to enjoying a “general equality of condition.”
So, is America still a nation where its citizens enjoy a “general equality of condition”? Are we still promoting “the welfare of the greatest possible number”? It’s hard to imagine a modern Tocqueville taking in the grand sweep of our current political and economic landscape—with its shrinking middle class, disappearing jobs, growing economic disparity, banking oligarchy, and public policy sold to the highest bidder—and reaching the same conclusions.
Tocqueville’s words are deeply at odds with the reality of modern America. For decades our political leaders have systematically squeezed the nation’s middle class in order to promote the corporate interests paying for their reelection. America’s middle class has been the country’s economic backbone. It is our vast, energized middle class that has done the heavy lifting and inspired the most innovation. Where the middle class heads, the rest of the country follows. So when the middle class is systematically worn down—when too many of its members become downwardly mobile, unable to keep their jobs or their homes or buy as many goods and services and drive market innovations—can a diminished America, a Third World America, be far behind?
MIDDLE CLASS: I KNOW IT WHEN I SEE IT93
The crippling of America’s middle class didn’t happen overnight—and it wasn’t the result of the bad bets made by the game-fixing gamblers on Wall Street (although they sure did their part). It’s actually been decades in the making. But before we look at who set the roadside explosives along the middle class’s road to the American Dream, it might help to define exactly what the term means.
What makes someone middle class? Is there a base income level (fall below it and you are officially poor), or a top-line figure above which you instantly ascend to the upper class (with a quick rest stop at upper middle class)? Does it depend on the size of your house (do you even need a house—can renters be middle class?), the kind of car you drive, the amount of rainy-day savings you have squirreled away in the bank?
In truth, pinning down a hard-and-fast definition of “middle class” is tricky business. It’s a lot like Supreme Court justice Potter Stewart’s famous assessment of what constitutes pornography: “I know it when I see it.” (Indeed, with both porn and the modern middle class, someone is usually getting screwed.)
There is no tidy formula. Paul Taylor, executive vice president of the Pew Research Center, asked during his testimony to the Senate Finance Committee: “Is a $30,000-a-year doctor94 doing his residency in brain surgery lower class? Is a $100,000-a-year plumber upper middle class?” Or are they both part of the great middle class?
According to the Pew Research Center95, more than half of American adults (53 percent) define themselves as middle class. But behind this assertion96, Pew discovered a host of caveats: “Four-in-ten (41%) adults with $100,000 or more in annual house hold income say they are middle class”—as do 46 percent of those with incomes below $40,000. At the same time, a third of those97 with incomes between $40,000 and $100,000 don’t believe they are middle class.
For purposes of its research, Pew defined98 the middle class as those adults “who live in a house hold where the annual income falls within 75% and 150% of the median” gross income for a family of three in 2006 (the latest year data was available). In dollars and cents, that meant99 an income of between $45,000 and $90,000 made you middle class.
But, in the end, in a very American way, it all comes down to self-definition: If you consider yourself middle class, you are middle class.
THE MIDDLE CLASS’S LONG MARCH TO THE EDGE OF THE CLIFF
From 1945 to the 1970s100, a period characterized by widespread economic prosperity, the wealthiest Americans grew richer at a rate almost identical to that of America’s lower and middle classes. From factory employees to chief executives101, Americans experienced a doubling of income. By the end of the 1980s102, however, things had changed drastically, with the income of the wealthy skyrocketing while the rest of the country lagged far behind.
What happened? Did middle-class Americans lose their mojo? Or had rich Americans unexpectedly come upon the economic equivalent of the Fountain of Youth—a Fountain of Wealth? They had, but rather than Ponce de León103, it was Ronald Reagan who led the income-boosting expedition, marching into Washington under the banner of lowering the taxes of America’s moneyed elite.
But, the Reagan Revolution of the 1980s was about more than shifting the tax burden—it was about shifting the way America looked at itself. In short order, government was no longer seen as a solution—it was fingered as the problem. Tocqueville’s “welfare of the greatest possible number” was replaced by the notion that the invisible hand of the free market could best determine society’s winners and losers—until, that is, the winners got into trouble in 2008 and the government