As both Mitt Romney and Barack Obama focus presidential campaign rhetoric on reviving America’s “middle class,” a little perspective may be useful.
“The Middle Class Is Broke” proclaimed The Daily Ticker. In the following story Business Insider editor Henry Blodget highlighted key points from the Pew Research Center’s new study “The Lost Decade of the Middle Class – Fewer, Poorer, Gloomier.”
“Wages are now at an all-time low as a percent of the economy” and “corporate profits are now at an all-time high,” reports Blodget.
“Over the past 30 years, a larger and larger portion of America’s income growth has gone to those in the top 10% of incomes, and especially those in the top 1%. This is a major change from the prior 60 years, in which the top 10% and the bottom 90% shared in the income gains.”
The Pew study also points to the double-whammy the Great Recession had on middle-class wealth versus upper-income wealth.
“Wealth of middle-income families had been unchanged from 1983 to 1992, then grew sharply—by 43%—from 1992 to 2001, and continued to grow in the 2001-2007 period, by 18%. Net worth of middle-income families dropped 39% in the later years of the decade as the housing market crash and Great Recession wiped out the previous advances. Over the 1983 to 2010 period, only upper-income families registered strong increases in wealth.”
Middle-class attitudes eroded along with wealth.
“Only about one-in-ten (11%) say they are very optimistic about the country’s long-term economic future, 44% are somewhat optimistic and 41% are somewhat or very pessimistic,” reports the Pew study.
So, the presidential candidates need not only to present believable plans to reverse the economic trends decimating the middle class, but also the growing pessimism.
This next finding by the Pew study shows the great challenge both face.
“Fully 85% of self-described middle-class adults say it is more difficult now than it was a decade ago for middle-class people to maintain their standard of living. Of those who feel this way, 62% say ‘a lot’ of the blame lies with Congress, while 54% say the same about banks and financial institutions, 47% about large corporations, 44% about the Bush administration, 39% about foreign competition and 34% about the Obama administration. Just 8% blame the middle class itself a lot.”
Clearly, the middle class doesn’t trust big business or politicians (of either party). They blame them for driving our economy down the tubes, our fiscal system down the drain, and our prosperity into the hands of the already rich.
In this environment, regaining the trust of the middle class will take more than promises and slogans wafting from convention halls. It will likely take brutal honesty, something spin-expert campaigns, candidates, and political leaders usually dodge.