by Randolph T. Holhut
American Reporter Correspondent
January 3, 2008
IT'S 'LIGHTS OUT' FOR THE AMERICAN DREAM
DUMMERSTON, Vt. -- In spite of playing a major role in driving up energy costs, driving down housing prices and generally screwing up the American economy, securities firms on Wall Street handed out nearly $38 billion in bonuses last month. According to Bloomberg News, that's a new record for holiday largesse on Wall Street.
Back on Main Street, the champagne and caviar is rather scarce. The Congressional Budget Office reports that the after-tax income for the wealthiest 1 percent of Americans rose 228 percent from 1979 to 2005.
For the average American worker, wages adjusted for inflation have been stagnant for nearly 40 years. The Brookings Institution, a centrist think tank, examined the income of men ages 30-39 over four generations. Today's thirtysomethings have a median income that is, on average, 12 percent less than their fathers' generation. Only the widespread entrance of wives and mothers into the workforce has kept families from falling even further behind. And that is no longer enough.
For the past few years, families have resorted to credit cards and home equity loans to bridge the gap between stagnant wages and a rising cost of living. Now, Americans owe nearly $900 billion in credit card debt and the rate of late payments and defaults is rising by the month.
So, whatever happened to the American Dream? Whatever happened to the ability for a working class family to live a decent and financially secure life? The answer is that this dream vanished as an overwhelming portion of this nation's economic growth flowed into the pockets of a select few.
In a way, that's a reflection of the current American social contract. In exchange for not having the sort of economic security that can be found in most of the industrialized world, Americans were given a economic system where one's upward mobility was limited only by one's desire to get ahead. At least that how it was, since that contract was voided long ago. For most Americans, a child's economic position is determined by their parents' economic position.
In a recent examination of the economies of 25 industrialized countries by the Economic Mobility Project, Americans were found to have significantly less upward economic mobility than other countries.
How much less? German workers have 1.5 times the mobility of Americans. Canadian workers have 2.5 times more mobility and Denmark's are three times more mobile. Norway, Finland, Sweden and France all have more mobile societies than the United States, which came in near the bottom of the list. Only the United Kingdom ranked lower than the United States.
Look at the list of countries in the paragraph above, and you can see why this ranking is so. The United States is the only country without universal health care. It is the only country where the federal government is not directly involved with higher education. It is the only country without strong labor laws and unions. It is the only country without a robust social safety net.
Where a German or Danish worker doesn't have to worry about losing their jobs, losing their health care, losing their retirement savings or losing their homes, the average American worker is exposed to all these risks. That's because the United States doesn't have the sort of progressive social policies that keep people from falling out of the middle class when disaster strikes.
The rise of the American middle class in the 1940s and 1950s wasn't an accident. It came through progressive economic policies like the GI Bill, which opened the doors of higher education to a whole generation. It came through laws that guaranteed workers the right to organize and join labor unions. It came through significant investments in education and public infrastructure.
Nearly three decades of conservative public policy and the exaltation of free market capitalism at the expense of the common good have destroyed many of the opportunities that Americans once enjoyed to get ahead. If economic "competitiveness" means slashing taxes on the rich and corporations while slashing public services for everyone else, what you end up with is a government that has no capacity to mitigate inequality and a society that is divided between a wealthy minority at the top and everyone else at the bottom. It is the kind of place that most Americans don't want to live in.
Again, economic mobility doesn't just materialize out of thin air. It takes a commitment to equality that has not been seen or heard in the current political debate. The alternative is a country where the gap between the haves and have-nots grows wider, and the potential for social upheaval becomes greater.
Randolph T. Holhut has been a journalist in New England for more than 25 years. He edited "The George Seldes Reader" (Barricade Books). He can be reached at email@example.com.