America is more divided than ever. “How we got here?” I think, is the question at hand. More importantly, how do we step back from the abyss, in 1500 words or less? I won’t begin with a jeremiad of Trump’s latest constitutional assault or the other symptoms plaguing America but instead focus on underlying structures, the causes of the symptoms.
Bill Clinton famously said in his campaign for president, “It’s the economy, stupid.” The economy is too broad, and I argue that “It’s the wages, stupid.” Since the 1980s our economy grew tremendously while wages stagnated and shrank for middle- and working-class folks.
Frustration and anger mounted over the decades as middle-class Americans lost faith in the “miracle of the market. It was an era of the wages of poverty and in 2016 it erupted in Trumpian Populism. It went dormant after Trump’s chaos and excesses and his loss at the polls, but the Democrats squandered the dormancy during the Biden years by a massive failure of vision, a greater failure of touting economic stability and growth, and letting an obviously declining Biden run for reelection. It wasn’t age, it was the very real cognitive impairment we all witnessed, and denying it was just plain stupid.
I propose that the root causes of America’s partisan divide today are fixed like concrete in these wages of poverty. I argue they are the result of systemic attacks on unions and progressive tax policies, attacks primarily championed by conservative Yale and Harvard elites who are the mouth pieces of Corporate America (Capital). The liberals who used to champion the middle- and working-class, also lost their way, chasing fat corporate campaign donations in exchange for wage silence.
Below are three broad stats that forms a snapshot of America’s poverty of wages. I think they show a strong correlation between union membership, wages, and income inequality. The other ingredient, not captured in the stats, are regressive tax policies starting under Ronald Reagan.
- America’s GDP grew 15 percent since 1980. American’s ‘Real Median Household Income’ grew 7 percent during the same period (Federal Reserve Graph).
- The top 1 percent of wage earners income grew 138 percent since 1979. The bottom 90 percent of wage earners income only grew 15 percent during the same period (Economic Policy Institute)
- The income-share of the top 1 percent began to shrink (after the Gilded Age excesses) in 1917 when union membership began to rise, peaking at 35 percent of the work force between 1942 and 1957. This wealth gap shrinkage persisted until the 1970s in tandem with a long period of union decline starting in the late 1950s. The late 1970s and early 1980s witnessed a spike in the share of income going to the top 1 percent as union membership waned to record lows (Department of Treasury).
The Rise and Fall of Unions: A very, very Short History
Industrial age excesses and the massive accumulation of wealth by Gilded Age titans of industry lead to a progressive movement and legislation that fostered unions’ growth. The first half of the 20th century saw progressive legislation, starting in 1914 with the Clayton Act, which as a matter of principle, stated that “a human being is not a commodity.” Wow! What a declaration. In 1926 the Railroad Labor Act permitted the formation of unions within that industry. The Davis Bacon Act in 1931 required federal contractors to pay the “prevalent wage.” The U.S. Employment Commission was established in 1933. The National Labor Relations Act gave labor the right to organize in 1935. This was followed by the Fair Labor Standards Act, which among other reforms, created a minimum wage.
Corporate and conservative backlash began undermining unions. Starting in 1947 with the Taft-Hartley Act, a Republican bill, vetoed by Truman, but overrode by the Republicans. It amended the National Labor Relations Act, restricting union’s ability to give political donations, or engage in support strikes, or boycotts, to name a few. Additionally, states, like Virginia, got in the act by passing “right to work” laws. A near mortal blow to the unions came when Ronald Reagan fired 11,000 air traffic controllers on August 5, 1981 to much fanfare.
The legislative war on unions was supplemented by demonization of unions. Linking organized crime to unions. Arguing that unions made America uncompetitive. Even today, the elite conservative think tank the Hoover Institute — housed at the West Coast elite Stanford University – recently wrote that the decline of unions “is good news, not bad.”
They argue that markets provides a “greater protection for workers in a competitive economy that opens up more doors than it closes.” The stats above suggest otherwise. They further argue that taxes and the federal government “directs social resources to less productive ends.” I presume by “less productive ends” they mean working class folks who need Medicaid or SNAP or housing vouchers to survive, because, while productivity has increased, their wages remain stagnant or are shrinking when inflation is factored in.
Regressive Taxes and the Rise of Income Inequality
Ronald Reagan and the Economic Recovery Act of 1981 transformed a progressive tax system into a regressive one, ushering in an era of tax policies favoring the wealthy. Voodoo economics, according to detractors. For instance, while earned income taxes were cut somewhat at equal rates among upper- and lower-income folks alike, however, you have to look at the unearned income tax cuts. Unearned income — that’s how wealthy folks get richer on laboring classes sweat — were taxed at 70 percent tax. That tax rate was dropped to 50 percent. In addition, these new tax policies also taxed capital gains income at a meager 15 percent, well below the tax rate working-class folks were taxed on their income.
These elite conservative regressive tax policies permitted the wealthy to pocket billions every here. They accelerated the accumulation of wealth for a very small sliver of Americans, that infamous 1 percent, while the vast majorities wages stagnating. The Tax Reform Act of 1986, also a Reagan era tax cut, further increased wealth inequality. Today, Governor Youngkin vetoed an increase in Virginia’s minimum wage and vetoed mandatory paid sick leave. He cited the impact to businesses. A perfect example of treating humans as commodities.
Recall the stats above that show a spike in the income shares of the top 1 percent. They coincide with these 1980s tax cuts. Thes policies also triggered an acceleration of the shift away from a manufacturing-based economy to one based on financial instruments. Increased offshoring of manufacturing in favor of wall street marketplaces was a result.
The Age of Scapegoating
Today we are about to repeat that mistake as Trump and his Wall Street supporters push a feckless and obedient Congress to pass a “big, beautiful” bill to transfer $4 trillion dollars in tax breaks to the wealthiest Americans over the next 10 years. I presume so it does end up in the hands of ‘less productive ends.’
How is it then that leftist, commie, Marxist, elite professors of history at elite universities get the blame for America’s stagnating wages and declining middle-class? When the double whammy of withering unions and tax policies that favored the rich that produced surging levels of income inequality are the products of conservative think tanks and their corporate sponsors.
Instead of blaming pallid faced conservative men with pedicured fat fingers that never meet a callous; sitting in leather chairs in corporate board rooms; farting and burping after a meal served by minimum wage workers; joking about offshoring and fat bonuses for these wages of poverty, Republicans since Reagan manufactured culture war scapegoats. Remember “Welfare Queens.” Trump now waves that scapegoating red cape like a matador at the angry bull standing in the ring poverty. Today’s 21st century villains are Federal bureaucrats (a perennial favorite), DEI hires, Universities, and dark-skinned criminal migrants. They’re the line jumpers, getting ahead of hard-working white men, stealing wages and futures, Trump blusters.
Since January 20, Trump has engaged in a modern-day equivalent of Rome’s Circus Maximus: Bread and Gladiators to entertain the masses, satiate their rage by dehumanizing migrants, humiliating bureaucrats, demonizing scholars and scientists, and wiping clean American history of any references to persons who aren’t white straight men. Meanwhile, Trump and the plutocrats intend to pick the pockets of middle- and working-class men and women of $4 trillion dollars of wealth that they produce through their labor.
Are We Lost as a People?
Hell, I don’t know, and I don’t pretend to have any answers as to which party, if any, is best positioned to lead America out of this collective wilderness. Democrats and Republicans both alike treat middle- and working-class people as commodities.
The Republican Party’s corpse is putrefying in a shallow grave. The Trump Party has risen in its place. A party ruled as if it were a totalitarian regime. Fact and fiction, truth and falsehood blended into an indistinguishable shit cocktail. Everyone living in fear of the ‘Primary,’ the equivalent of political death, or the very real threats from Trump’s shock troops, which now includes the Justice Department and the military. It’s a wall street zombie shit-show party pretending to be the party of the working classes.
The Democratic Party, while not captured by a hegemonic figure, is crippled like a rudderless ship, afraid of its own shadow, with no defining vision, led by moribund octogenarians stuck in the 80s and 90s. No wonder my consumption of Scotch is skyrocketing like measles infections.
I think the Democrats have the best chance, nevertheless. They need to reinvent themselves, make way for younger leaders that represent today’s generations, champion fair and equitable wages that go beyond the “living wage’ shtick, to win back, middle- and working-class folks.
So, that’s my diagnosis. I have no cures or fixes, just offering some lifestyle changes to the Dems:
- Confess your sins.
- Acknowledge you don’t have all the answers.
- Talk normal. Enough of the highfalutin wonk talk, and cuss for fuck’s sake!
- Stop bringing cupcakes to knife fights.
- Fight goddamned hard to ensure unions flourish, much will naturally follow from strong unions.
- Have principles and stick with them. That means not abandoning LGBTQ rights or inclusion or pluralism or diversity.
- The national gerontocracy needs to step aside.
- National leaders: Lead, follow, or get out of the way.
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