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The Great Inequality Debate
Our Proletarian Middle Class

The middle class is becoming increasingly proletarian. So argues Joel Kotkin in his latest piece for New Geography. Kotkin highlights some increasingly familiar statistics about the stagnating economic prospects of the working class and then points out that both parties are helpless in the face of this trend. The contemporary left doesn’t have an answer. Its policies restrict growth or create a permanent underclass “living hand to mouth.” But the democratic capitalist rhetoric of the right, Kotkin argues, is also problematic. Wealth, especially stock ownership, is becoming more concentrated, and poverty is spreading. But Kotkin believes there is a way forward:

The early decades of the Industrial Revolution saw a similar societal decline, as once independent artisans and farmers became fodder for the factory lines. Divorce and drunkenness grew as religious attendance failed. But a pattern of reform, in Britain, America and even Germany, helped restore labor’s place in the economy, and rapid growth provided the basis not only for the expansion of the middle class, but remarkably improvements in its well-being.

A pro-growth program today could take several forms that defy the narrow logic of both left and right.  We can encourage the growth of high-wage, blue-collar industries such as construction, energy and manufacturing. We can also reform taxes so that the burdens fall less on employers and employees, as opposed to those who simply profit from asset inflation. And rather than impose huge tuitions on students who might not  finish with a degree that offers employment opportunities, let’s place new emphasis on practical skills training for both the new generation and those being left behind in this “recovery.”

This is exactly right. The parallels between our age and the industrial revolution are huge and important. But both parties seem to be overlooking them. This failure of historical imagination is in some ways indicative of a larger failure in the way we educate our elites. But more importantly, it means we will have to look outside the left-right policy consensus to find new solutions. We are living in an era of profound flux, and the changes will speed up before they slow down. The best thing we can do in the meantime is to take full advantage of federalism, encouraging states and cities to conduct the bold experiments that will show us the way forward. Read the whole thing.

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  • Boritz

    We can encourage the growth of high-wage, blue-collar
    industries such as construction, energy and manufacturing. –Kotkin

    Didn’t we spend upwards of a trillion dollars five years ago on this?
    Construction = shovel ready jobs
    Energy and manufacturing = Solyndra

    It isn’t that the basic idea is wrong. It’s that we are too corrupt and immoral to administer it in a way honest enough to make it work. Wisconsin is an exception but they are damned for their efforts.

    • rheddles

      No, the trillion dollars was spent on keeping union employees in state and local government employed and paying union dues that could be recycled into Donk campaign coffers. There were no shovel ready jobs and the energy supported by the administration was for payoffs.

      Kotkin is thinking of real construction, both real estate and infrastructure. He’s from Caliphornia, so he knows what lousy roads and boondoggle bullet trains look like. In energy, he’s talking about fracking not unicorns.

      Kotkin sees the Blue Model defects pretty clearly, see his opinions about dense urban planning vs. suburbia.

  • Gary Hemminger

    This is not going to happen no matter how much it makes sense. The environmentalists hold sway throughout the US (and especially here in California). there will be no growth in blue collar jobs as long as the environmentalists run the ship.

  • brad lena

    The comparison between the industrial revolution and the present is of marginal use. The chasm between virtually every aspect of human endeavor then and now is too vast. The elites of every generation are clueless and when harnessed to their malevolence the results are catastrophic.

  • qet

    Has Via Meadia forgotten that it routinely rejects the idea of a return to a blue collar, manufacturing-based economy, that it trumpets the future as one belonging to service entrepreneurs? And really, an article, whether by Kotkin or by Via Meadia, that says that we “can” do thus-and-such when it is perfectly clear that, politically, we can’t, is just unworthy of serious consideration. Like Via Meadia, I have no doubts that the human race will not only endure, but prevail; but I am not too keen on our near-term prospects.

  • stevewfromford

    There is a simple solution to falling incomes among the working class. The feds should ban the use of excavators and bull dozers and mandate the employment of an army of shovelers at high wages on any federally financed construction project. A man with a shovel and a full belly is a satisfied voter!

    • John Stephens

      I recall reading that the Roman Emperor Hadrian prohibited the use of labor-saving devices, on the grounds that it would cause unemployment. The more things change…

  • Anthony

    See Richard Reeves for related material (1% v. 99? No, It’s Affluent, ‘Squeezed’, Impoverished) at Real Clear Markets.

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