America’s elite upper class would argue that the US economic policies of the last half century have been, overall, quite successful. Adhering to an ideology of compassion that was adopted by the Democrat party of the Great Society era, these policies slobbered with concern for the poor, the marginalized, the little guy – even poor, marginalized, little guys in other countries. Yet, even under the enormous fiscal drag of their profligate benevolence, the US economy performed as planned. Consumption and corporate profits soared, and GDP growth tripled. Our rulers, including politicians from both political parties, having profited handsomely from the policies that they designed, no doubt admire their work.
But admiration from American workers should be withheld. During the last 50 years, only the expression of compassion has reached the American working class. The revealed compassion for the average worker has been wage stagnation, and for many millions of displaced workers and their families, immeasurable harm. Despite the recent economic boom created by the Trump administration (that has generated millions of jobs, together with long awaited wage increases), the long term prospects for the working class are grim. Mr. Trump’s policies, and those of future presidents, will likely spur continued GDP growth, but the now common policies of corporate America -- furious adoption of automation and relentless enlistment of foreign labor -- will inevitably lead to major job losses and stagnant wages for the average worker.
Until 1973, wage rates rose with productivity gains; workers were rewarded for their efforts. From 1973 to the present, however, while worker productivity increased 77%, wages for the average worker increased only 12.4%. The reason, explains the Economic Policy Institute: “the fruits of their labors have primarily accrued to those at the top and to corporate profits.” Gains for the top 1% of wage earners exceeded 150% during this period; those of the bottom 90% increased by a meager 21%. This deep labor force polarization was enabled, notes EPI, by “policy choices made on behalf of those with the most income, wealth, and power.” One could argue that the trade, education, and immigration policies that began in the late 1960s, prevented wage gains from continuing their historical rise at the same rate as productivity gains. Fifty years of such liberal fatuities have dispossessed working class America.
Nor will American workers be rewarded anytime soon. The most likely compensation for millions of workers in the bottom 90% will be job loss. Beginning at the turn of this century, and in addition to wage stagnation that has persisted since the early 1970s, employment growth has remained flat -- again, while productivity growth continued on its steady, upward path. Referred to as the Great Decoupling, many economists believe that this phenomenon – the decoupling of wage and job growth from productivity growth – is permanent. Among the contributing factors cited are “tax and policy changes and the effects of globalization and off-shoring”, but the most worrisome factor is the accelerating pace at which digital labor is decreasing the demand for human labor. Numerous studies predict that, by 2030, tens of millions of US workers could be displaced by automation. A Council on Foreign Relations study warns that “automation and artificial intelligence (AI) are likely to exacerbate inequality and leave more Americans behind.”
Leaving Americans behind has become a valued business principle to the globalist, professional-managerial class that emerged in the 1980s. This new ruling class is cosmopolitan in its world view, and unlike the aristocracy that it replaced, holds only a weak sense of civic responsibility to their local and regional communities. Happy to internationalize the division of labor, their policies have gutted middle-income America and condemned low-income America to a permanent lower-class; and they have plucked the chance of upward mobility from both groups. In his 1992 book, The Revolt of the Elites and the Betrayal of Democracy, liberal historian and social critic Christopher Lasch lamented its rise to power, chastising its members for “turning their back on the heartland and cultivating ties with the international market in fast-moving money, glamour, fashion and popular culture. It is a question whether they think of themselves as American at all.” America’s new globalist aristocracy prefers “multiculturalism” over patriotism, wrote Lasch. “Theirs is essentially a tourist view of the world.”
This tourist view has shaped economic policies that focus exclusively on GDP growth. If labor cost is down and consumption is up, all is well. But all is not well for American labor, or American society. The old aristocracy, perhaps begrudgingly, treated workers with enough respect to pay them a wage sufficient to support their families. The new progressive aristocracy professes its concern for American workers and their families, but treats them with disdain.
Such policies have created what, in his 2012 book ‘Coming Apart,’ Charles Murray called the New American Divide, in which the common civic culture once maintained by the old aristocracy, has been, over the last 50 years, unraveled by the new aristocracy. In Murray’s account, one side of the divide lives in upper-middle-class suburbs, statistically represented by a fictitious neighborhood called Belmont. Its inhabitants have “advanced educations, often obtained at elite schools, sharing tastes and preferences that set them apart from mainstream America.” Its most powerful residents, our new aristocracy, run the country: “they are responsible for the films and television shows you watch, the news you see and read, the fortunes of the nation's corporations and financial institutions, and the jurisprudence, legislation and regulations produced by government. They are the new upper class, even more detached from the lives of the great majority of Americans than the people of Belmont.”
In contrast, the fictitious neighborhood of Fishtown represents working class America. Its inhabitants “have no academic degree higher than a high-school diploma.” They hold blue-collar jobs, low-skill service jobs, or low-skill white-collar jobs, if they work at all; the work ethic, along with the institutions of marriage and religion, plummet. In illustrating the cultural unraveling, Murray writes:
If you were an executive living in Belmont in 1960, income inequality would have separated you from the construction worker in Fishtown, but remarkably little cultural inequality. You lived a more expensive life, but not a much different life. … Your house might have had a den that the construction worker's lacked, but it had no StairMaster or lap pool, nor any gadget to monitor your percentage of body fat. You both drank Bud, Miller, Schlitz or Pabst, and the phrase "boutique beer" never crossed your lips. You probably both smoked. If you didn't, you did not glare contemptuously at people who did.
Little has changed since the publication of ‘Coming Apart.’ If anything, the new aristocracy’s sense of civic responsibility has weakened. It glares even more contemptuously at Fishtown.
In his article The Working Hypothesis, Oren Cass asks, “What if people’s ability to produce matters more than how much they can consume?” and offers the hypothesis: “that a labor market in which workers can support strong families and communities is the central determinant of long-term prosperity and should be the central focus of public policy.” Policies that have catered to the whims of “marginalized” identity groups and the cheap labor demands of corporate America have failed poor and low-income Americans; they are “gutting out” the middle class. Without meaningful work at a wage that rewards the worker with dignity and respect, families suffer (if they are formed at all) and communities crumble. Who would marry a man who could not find a job, or one whose wages are so low that it’s not worth building a robot to replace him? Who would want to live in a decaying community overrun with unemployed and unmarried men, pacified by drugs and video games, and unencumbered by civic responsibility? Writes Cass, “In a community where dependency is widespread, illegality a viable career path, and idleness an acceptable lifestyle, the full-time worker begins to look less admirable—and more like a chump.”
Yet this is the society that has emerged from the policies of the new aristocracy – an unraveled, divided culture in which any desire to elevate the citizens of Fishtown has long since left Belmont. Equally shameful, it is a society that has no productive use for tens of millions of its working age adults. These citizens constitute an immense, chronically unemployed underclass that has been omitted from the political arithmetic of GDP growth because they have been deemed unsuitable for work: criminals, alcoholics, the homeless, the disabled, the suicidal, not to mention the victims of opioid addiction and family disintegration. Not that many members of this forlorn cohort share no responsibility for their predicament, but there are effectively no compassionate policies to extract their productive value. It makes better business sense to replace them with clever machines and cost-effective foreign labor.
Today, nothing excites the passions of big city aristocrats more than immigrants and robots. Soon, the excitement may be limited to the latter. According to a recent Pew Research report, immigrants will constitute 100% of the increase in the US labor force between now and 2030. To a very large extent, however, the jobs that immigrants perform are the very jobs that, by 2030, automation will eliminate. For example, a 2016 Obama administration study found that automation-induced job destruction will be “highly concentrated among lower-paid, lower-skilled, and less-educated workers,” noting that “83 percent of jobs making less than $20 per hour would come under pressure from automation.” And America’s elite upper class will come under pressure to express stilted pity for the immigrants that they invited, while herding them into the underclass.
The idea that meaningful work might be important to the worker, and to American society, has escaped the new aristocracy. America’s elite inhabits America’s centers of economic power –hulking multicultural citadels for millionaires, immigrants, hipsters, and tourists. In terms of consumption and GDP, these are the only cities that matter. Yet they are suffocated by dense low-income populations and the diversity of their miseries. And the new aristocracy is as oblivious to these miseries as it is to life in America’s heartland. It is not concerned that the economy that has enriched them is headed to a lop-sided state in which the number of unemployed exceeds the number of employed -- the underclass outnumbering the chump class. Nor are they concerned that their policies have produced citadels such as San Francisco, where homelessness is rampant, “poop patrol” officers clean human feces from sidewalks, and injection drug addicts outnumber high school students.
The new aristocracy should worry that working class America will discover the hoax of liberal compassion. American gilets jaunes might take to the streets of Washington DC, the wellspring of globalist policies that have relegated the working class to what French writer Christophe Guilluy would call “peripheral America”. In Guilluy’s view, while the globalist economic model produces a lot of wealth, “it doesn’t need the majority of the population to function. It has no real need for the manual workers, labourers and even small-business owners outside of the big cities.” In France, as in America, the model is embraced by “celebrities, actors, the media and the intellectuals,” who are unconnected with life outside of San Francisco, Washington DC, New York, Los Angeles, and other economic juggernauts. Such chic liberal thinkers see no down-side to the ongoing wave of automation. New compassionate polices, liberals believe, will surely be developed to help the many millions of workers – fellow citizens from Fishtown – whose jobs will be eliminated. These displaced workers will be retrained; they will go back to school; surely, this group will do better than the shiftless, slothful underclass that has already been left behind. The new aristocracy, says Guilluy, “needs a cultural revolution, particularly in universities and in the media. They need to stop insulting the working class, to stop thinking of all the gilets jaunes as imbeciles.” America’s working class imbeciles should heed Lasch’s warning that, with the liberal elite, “compassion has become the human face of contempt.”