Crisis of the Middle Class – Solutions

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In my previous post, I talked about the danger inherent in the crisis of the Middle Class: that we create a permanent under-class, without hope, without resources and non-resilient. In this post, I want to take a closer look at the nature of this crisis, and consider possible solutions. Along the way, we’ll find a few opportunities lurking as well.PewResearch

The crisis. Last month, the Pew Center released an important report detailing how Americans’ incomes and wealth had evolved since 1971 (read the full report). They found that both median incomes and wealth had increased slowly but steadily until 2000. The recessions of 2000-2 and especially the Great Recession knocked both incomes and wealth back to the levels of the mid-’90s. I found two things especially interesting about the report, however. First, it focuses on mobility, out of the middle income group into either the lower or higher income brackets (NB. They have a very nice discussion about “middle income” vs “middle class.”). Second, the data reveal some clear – and somewhat unexpected – winners and losers.

First, the winners. By far, the biggest winners were those over 65 – about 25 percent more moved into the higher income bracket than moved down. There was a clear trend that marriage was a significant positive factor, whether the marriage included children or not (however, being unmarried was only slightly negative). Finally, African-Americans also were significant gainers.

The losers? It all starts with education – people with less than a college education were the biggest losers. Hispanics (probably because of the influx of immigrants – we always have to keep in mind that the U.S. is an “open system”) were net losers as were the young – 18-29 year olds.

This implies that the epicenter of the crisis is at the intersection of the young, the less educated and the unmarried. Sociologists have actually begun studying this group – they are called the Precarians (I’ve referred to them before as the Scarred Generation). They live an uncertain life of odd jobs, sometimes acting as subcontractors (depending on their education or skills), but more often simply scrounging for unskilled jobs – think Über but even less certain. Many of them still live at home; e.g., about one-third of women in their early twenties are still living with their parents. Too often, like Blanche DuBois, they rely “on the kindness of strangers.”

Potential solutions. Unfortunately, 2016 is a Presidential election year. Unfortunate, because we have the prattle of the political class promising they will solve the crisis. Those on the Left by and large are redistributionists – tax the rich to provide for others. It’s hard to see how redistribution will provide opportunities – or skills – for the Precarians to become upwardly mobile. Rather, it seems to lock them into perpetual dependency with little hope for a nyt workersbetter life. The redistributionists also are blind to the need for financial capital in order to start and grow new businesses, the wellspring of Opportunity.

Those on the Right have a different sort of myopia: their pet solution is to let the “free market” solve the problem. A sort of trickle down approach that assumes that when businesses are thriving there will be more opportunities for everyone. That’s only half true – there would be more opportunities, but only for those with the skills and the desire to seize them.

As the Belgian economist Marc de Vos has pointed out, a person’s economic success depends on aptitude and attitude, to which I’d add knowledge. Which brings us back to education, but education that doesn’t look at students as statistics but as individuals; that worries most about whether a student is learning and learning to learn, and less about the educational bureaucracy; that stresses accountability and personal responsibility for outcomes; that demands that teachers are committed to helping students to learn and empowers them to do whatever needs to be done for success.

While education must play a central role in any solution, it is not the whole solution. Following De Vos, education can provide knowledge, and develop aptitude, but by itself it can’t shape attitudes, nor provide opportunities. But other initiatives can. For example, former General Stanley McChrystal is heading up a group that aims to make “a year of national service a shared experience for all young Americans.” This excellent idea could “create a culture of service where we are all invested in our nation’s future and feel a shared sense of responsibility to our nation and to each other” – breaking down the barriers that isolate Precarians. It would help the young build those informal networks that are the most common basis for getting a job. In turn, it would get them more involved in their communities and more confident that they could actually make a difference.

workplaceDavid Brooks of the New York Times also has some ideas worth pursuing. He observes that in our era of power increasingly centralized in Washington, we have forgotten that local problems require local solutions, and that the environment in which Precarians live often is part of the problem. So he calls for devolution of power (and money) from Washington back to local communities to create environments of opportunity even in lower class neighborhoods. He calls on the political class to put the quality of our social fabric at the center of our politics, not the periphery. We need to treat people as individuals not just as economic units we throw money at, like monkeys in the zoo. Most importantly, he recognizes that we must take back the moral high ground – reestablish social norms that say there are things you must do: commit to others, stay around to raise kids, be accountable for your actions.

Each of these can strengthen our communities’ resilience. The informal networks build social capital. Knowledge, aptitude and attitude lead to the ability to successfully adapt to change. Thus, the crisis of the middle class also threatens the resilience of our communities. If we fail to bring the Precarians back from the brink, they will be anchors permanently preventing our communities from gaining the strengths they need to withstand or recover from future adversity. If we succeed, however, we will have secured our communities’ – and our nation’s – resilience for decades to come.

Images: New York Times; and

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