It's Not 1980 Anymore


I recently came across some very disturbing data about how America has changed in the past thirty years.  You've heard the gist of it:  the wealthiest Americans have made great gains while the middle class has shrunk.  The disparity between CEOs and workers has grown.  But consider the following:

 
copied courtesy of Isabella Lampkins and Forensic Accounting

How did we get here?  Several forces have been at work.

  1. Beginning under President Reagan, anti-monopoly legislation championed by President Teddy Roosevelt a century ago was dismantled.  Mergers and acquisitions enriched a mighty few while local businesses disappeared. 
  2. Maximizing profit by cutting expenses became a greater focus of business.   Considerable effort was devoted to ways of trimming the workforce (reducing jobs) and outsourcing work that could be done more cheaply elsewhere.
  3. Tariffs that protected American businesses and workers were systematically dismantled, particularly under the Bush and Clinton administrations.  The General Agreement on Tariffs and Trades (GATT) began just after World War II but the number of countries participating has ballooned from the original 23 to now 141.  GATT is now the World Trade Organization (WTO). It's because of the loosening of trade barriers that American companies can more cheaply close factories here, build them in China or elsewhere and import their products for sale to the same workers whose jobs were outsourced.
  4. Tax laws and deregulation have been enacted to benefit those who support politicians' reelection.  Consider that in 2004, 95% of House races and 91% of Senate races were won by the candidate who spent the most money.  According to an MIT study, in 2002 80% of ALL political campaign donations came from businesses.  Labor, individuals and non-profit interest groups barely mattered.  Politicians must reciprocate to their donors or be bounced out on the next election.
  5. The primary access point for those in the middle and struggling classes to move ahead has historically been education.  Subsidies for college have eroded while prices have climbed. A four year degree at any of the prestigious University of California campuses in 1980 would have cost a few hundred dollars.  Today that same degree would cost over $50,000. 
  6. Labor unions have all but disappeared from private sector employment.  Less than 12% of Americans belong to unions today, compared to 21% in 1980.  Only 7% of private sector workers are unionized today.  Workers have lost bargaining clout, pension and medical benefits and job security.  Many industries have chosen to shift their workforce to part-time workers to reduce benefit costs.
The current situation is not sustainable, not for the poor, the middle or even the wealthiest.  Their wealth depends on an underlying system of consumers, infrastructure supports and a skilled workforce.  Unfortunately though, few Americans -- and fewer still in the high profit sectors -- think beyond immediate gains to long term sustainability.

It's election season.  I'd be mightily impressed if even one of the candidates spoke seriously about this national disgrace and how he would reverse it.


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