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America’s Middle Class Battlelines

Posted October 12th, 2016 at 4:30 pm (UTC-4)
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For most Americans, a middle class life looks like this: Home ownership; a yearly vacation; college for your kids; a secure, debt free retirement.

Candidates Donald Trump and Hillary Clinton campaign the day after their second debate. (AP)

Candidates Donald Trump and Hillary Clinton campaign the day after their second debate. (AP)

That’s what’s been spun as the “American Dream.” And, according to the political rhetoric, trying to achieve it is a nightmare.

The Pew Research Center recently reported the share of middle class households have dropped in 9 out of 10 metropolitan areas. Some of that erosion is due to income growth. But more of the drop can be attributed to income declines.

Presidential nominees Donald Trump and Hillary Clinton are offering both reasons and remedies for the middle class slippage. But can a manufacturing jobs plan, or an investment or middle class tax cut close the fissures that seem to be splintering American society?

The New War Between the States

Joel Kotkin – Real Clear Politics

Yet if you look at the Electoral College map, the correlation between politics and economics is quite stark, with one economy tilting decisively toward Trump and more generally to Republicans, the other toward Hillary Clinton and her Democratic allies.

Electoral map for 2012 U.S. presidential election. (AP)

Electoral map for 2012 U.S. presidential election. (AP)

This reflects an increasingly stark conflict between two very different American economies. One, the “Ephemeral Zone” concentrated on the coasts, runs largely on digits and images, the movement of software, media and financial transactions. It produces increasingly little in the way of food, fiber, energy and fewer and fewer manufactured goods. The Ephemeral sectors dominate ultra-blue states such as New York, California, Oregon, Washington, Massachusetts, Maryland, and Connecticut.

The other America constitutes, as economic historian Michael Lind notes in a forthcoming paper for the Center for Opportunity Urbanism, the “New Heartland.” Extending from the Appalachians to the Rockies, this heartland economy relies on tangible goods production. It now encompasses both the traditional Midwest manufacturing regions, and the new industrial areas of Texas, the Southeast and the Intermountain West.

Contrary to the notions of the Ephemerals, the New Heartland is not populated by Neanderthals.

A Great Fight of our Times

David Leonhardt – The New York Times

Think, for a moment, about the stories that your family likes to tell about itself. They are probably miniature versions of the American story, with progress as the central theme….

These stories aren’t about only your family. They are also stories of tribal pride…that make people feel part of something larger.

When progress is the norm, it feeds on itself. People can trust that their own sacrifices will usually pay off. They can endure hard times without becoming cynical and can be generous toward others.

Now, imagine a different reality: one in which your family — or whole community — had known scant progress for decades.

Hard Truths for Trump’s America

William A. Galston – The Wall Street Journal

In this March 10, 2006 file photo, Ohio coal miners head into the mine for a shift inside the Hopedale Mine near Cadiz, Ohio.   (AP Photo/Joe Maiorana, File)

In this March 10, 2006 file photo, Ohio coal miners head into the mine for a shift inside the Hopedale Mine near Cadiz, Ohio. (AP Photo/Joe Maiorana, File)

Many forces have combined to decimate coal jobs since their mid-20th century peak. According to a 2014 official report from the state government of Kentucky, the principal culprit has been the “automation and mechanization of mining processes, which have improved mining productivity.”…

It is irresponsible for politicians to suggest that these mining jobs will return; they can’t and won’t. And even if mining recovered modestly, it would make at best a small contribution to coal states’ economies….

Real economic recovery in Appalachia—the heart of Red America—requires facing some hard truths. As of 2015, according to the Census Bureau, West Virginia had the fourth-lowest median household income in the country, and Kentucky the second-lowest. Although neither state is a hub for high-wage jobs, the real problem is that so few of their denizens do any work at all.

If You Want to Invest in the Middle Class Invest in Education

Editorial Board – The Oak Leaf

[W]hen you hear a presidential candidate say they want to bring back manufacturing jobs while also raising the minimum wage and taxes on the big corporations, you should realize the math doesn’t add up. Nothing deters a company from hiring more than raising wages and taxes….

If you want to invest in the middle class you wouldn’t just give workers an extra dollar for every hour worked, you’d provide them with a chance to make significantly more than the minimum wage. You’d allow them to get a job in government, education, research or information technology….

Education is an investment that, in the long run, has an opportunity to pay for itself. As students graduate and get jobs that pay well above the minimum wage, taxable income will increase significantly. Ideally, this would allow the system to pay for itself and then some.

The Disappearing Middle Class

Tim Bryce – News Talk Florida

Ford Motor Company’s F-650/F-750 medium-duty trucks roll off the line for the first time at the Ohio Assembly Plant Aug. 12, in Avon Lake, Ohio. Production of the trucks, previously built in Mexico, helps secure more than 1,000 hourly UAW jobs and a $168 million plant investment in the United States. (AP)

Ford Motor Company’s F-650/F-750 medium-duty trucks roll off the line for the first time at the Ohio Assembly Plant Aug. 12, in Avon Lake, Ohio. Production of the trucks, previously built in Mexico, helps secure more than 1,000 hourly UAW jobs and a $168 million plant investment in the United States. (AP)

As Aristotle noted centuries ago, “The most perfect political community must be amongst those who are in the middle rank, and those states are best instituted wherein these are a larger and more respectable part, if possible, than both the other; or, if that cannot be, at least than either of them separate.”

To do so, we need an increase in full-time jobs, not part-time.  Currently, the Obama administration is pushing for an increase in the minimum wage.  Can we not achieve the same goal by lowering costs as opposed to raising the minimum wage?  According to the government, inflation is at a paltry 1%.  Hardly worth worrying about, right?  Interestingly, the price of gasoline is not included in their equation.  This is strange as delivery costs affect everything.  In reality, we have a much higher inflation rate than the government is willing to admit.  I would therefore argue:

DON’T RAISE THE MINIMUM WAGE, LOWER THE PRICE OF OIL!

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