The road to nowhere...

 

The American middle class has been hit hard by the ongoing global economic crisis

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At a conference on unemployment in Oslo, Norway, a year ago I heard two things that stuck in my mind as bombshells waiting to explode.

The first was that the last time global unemployment was this high was in the 1930s - and we all know what happened then (source: Dominique Strauss-Kahn, former head of the IMF, but that's another story).

The second was that the top 1% of Americans took just 8% of the nation's wealth back in 1979 and now take 25%.

I increasingly think I was wrong to see them as two separate things; they are simply two sides of the same discontented coin.

Americans, by and large, do not mind other people getting rich. It is one of the big differences between them and Europeans.

A steel mill worker in Iowa told me during the 2008 presidential campaign that he did not mind John Edwards, former Democratic candidate for the presidency - yet another story - getting a $400 (£249) haircut because the candidate had worked hard and earned his fortune honestly.

It was, he said, part of the American Dream and something all citizens could aspire to.

Closed system

But now the evidence suggests all citizens cannot aspire equally.

As the rich take an ever greater share of the Gross Domestic Product (GDP) there is less of it for everyone else - that's the thing about pies.

Steel mill worker file picture Economic hardship is eroding the old belief that any American could get rich through hard work

The people at the bottom are finding it harder and harder to get to the top. Middle-class jobs are being replaced by machines and Chinese workers.

The welfare state - the "free" education, health and welfare that might help the poor get their first leg up - is fast eroding.

The result: America's famed mobility system has got blocked.

The truth is that a De Moines steel mill worker was never going to be a multi-millionaire, but the Dream was founded on him believing that he could be.

When the belief goes, you get discontent.

We are still a long way from 1930s Europe, but when you get high unemployment combined with a growing sense that it is not even worth trying to move up because the system is a closed one, then the outcome does not look good.

 
Katty Kay Article written by Katty Kay Katty Kay Presenter, BBC World News

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  • rate this
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    Comment number 10.

    I think it is an oversimplification to say the rich get rich and the poor get poorer. However, a key issue is why the Congress and President have not worked on getting more shovel ready jobs off the ground since 2009, which would a springboard for some middle class, not to mention the promise of a high speed rail system. Both parties are equally liable to this extent.

  • rate this
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    Comment number 9.

    @LucyJ

    Promoting manufacturing over industries the US had a competitive advantage in (e.g. technology) is throwing good money after bad. Money should be spent on ensuring people have the right skills for today's economy and retraining those who's outdated jobs are lost.

    Extending your argument, perhaps we should go back to tools to make our computers and cars - thus ensuring maximum employment.

  • rate this
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    Comment number 8.

    The disappointment may be caused by misinterpretation of American dreams. Is it the dream all about wealth, cars, luxuries or abundance? Or is it about able to grow to fullest development unhampered by the barriers and unrepressed by social orders? Are life and liberty not a dream by themselves?

  • rate this
    +1

    Comment number 7.

    American style capitalism is driven by a system that assumes, and requires, a never ending resource. One just follows the resource or 'discovers' a new one, and hey presto..work, money, and of course exploitation.

    This is now gone, there is no endless resource (never was really too), ergo, no growth.

    Americans now must realise you have to live within your means, which means, no "dream" too.

  • rate this
    0

    Comment number 6.

    Enjoyed article on Levittown Pa. Our website LevittownExhibitCenterNorth.com. If you are ever in area please contact us we would give you a tour of the area. We are presently planning many exhibits and programs for the 60th Anniversary of this unique community called Levittown. Built by William, Alfred and Abraham Levitt, levittown built for the returning hero's and is a 'GARDEN COMMUNITY'.

  • rate this
    +1

    Comment number 5.

    After-tax income for the top 1% of US households almost tripled, up 275% between 1979 to 2007 (nonpartisan Congressional Budget Office). Middle class after-tax income grew by just 40%. Those at the bottom of the scale grew 18%.
    Top 1% made $166,000 or more in 1979; that jumped to $349,000 in 2007. At other end, those in 20th percentile went from $12,823 in 1979 to $14,851 in 2007.

  • rate this
    +1

    Comment number 4.

    In today's global market/economy, countries around the globe are affected by a downturn in another. Especially a large economy like the US. The American Dream has become elusive for many due to recent global economic crisis and the ongoing attacks on middle-class by extreme right-wing politicians.Government is evil when it seeks to help the poor, but good when it helps and protects the wealthy.

  • rate this
    +1

    Comment number 3.

    US - 21.6% of children affected by poverty (rank 28)
    US - 12.3% children live constantly below the poverty line.
    Differences within the OECD:
    Denmark 3.7% children affected by poverty.
    Only Chile & Mexico are worse than largest economy in the world.

  • rate this
    +1

    Comment number 2.

    Katty: Middle-class jobs are being replaced by machines and Chinese workers

    2000 17 mil plus manufacturing jobs in USA
    2010 12 mil manufacturing jobs in USA

    When the factories shut down people lost their good jobs, their retirement, their health care, their pride, their sense of security+ it created a ripple effect

    USA's best way to help economy is to boost manufacturing+industry

  • rate this
    +2

    Comment number 1.

    Job losses being permanent are correct in this segment. I don’t understand why the current US administration does not understand this. No wonder people are protesting against Wall Street.

 

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