After the death of high wages and high debt - what drives the US economy?
"I've cleaned toilets before and I guess I can clean 'em again - but no, we'll never get back to the kind of wages and benefits we had..."
These were the words of a former Ford production line worker at Dearborn, Detroit, who I met while making the film that goes out on Newsnight tonight (and BBC Word News America this week, in short-form - but you can watch it right now below). She had volunteered for redundancy a year ago but was still out of work, her home in repossession and in debt.
Ford, for economists and social scientists, represents not just the inventor of the Model-T but the invention of a high-consumption economy based on mass production and high wages. For two decades we've known that, in the western world, that way of life is in decline: it's no longer the mainspring of economic activity.
What it was replaced by, as you'll see in my report, was a high-debt, low wage economy. The most common jobs in Michigan are in fast-food restaurants, hospitality or waiting tables. None of them pays on average above $10 an hour.
Walk into a small town Starbucks and you will find highly educated people, often with a degree, working as baristas: people saddled with student debt and, if they are among the one in ten who can't afford to meet their mortgage payments, looking at a bleak future. Most of those I met love working there - though they would rather be in a graduate profession. But now the Starbucks economy too is in retreat: the company has announced 600 store closures this year - mostly in small towns and poorer neighbourhoods.
According to the report The State of Working America, real average wages for those on middle incomes are lower now than they were in 1979 (see graph). It wasn't a secular decline: coinciding with the dotcom boom most Americans experienced a real uptick in wages. But in the mid-decade this fell back again, as this graph shows. So now the man in the 50th percentile is earning less than he was in 1979 (taking into account inflation), and those in the 20th and 10th percentile are way lower. Guess what though: every cloud has a silver lining: the top 20% of Americans are earning way more than they used to: the higher your pay, the more it's grown during the last 30 years - though even here at the top inflation has eaten into real wages lately.
Right now we are all focused on the recession effects of the 2008 financial crash, and its impact on the business model of banking. My report tonight refocuses the debate on the bigger changes the credit crunch may presage.
If we've left behind the high wage economy for the high-debt economy; and the motor of high debt - subprime lending and the securitisation bubble - has been switched off - how will high consumption be sustained?
The film is a journey: guided by a map of the closed and closing Starbucks branches of Indiana and Michigan (with a brief detour to Lehman Brothers' neighbourhood Starbucks café on Seventh Avenue, New York). I meet laid off coffee baristas and laid off Ford workers and ask them what they want out of the coming general election.