Here is the chart that may sink President Obama’s reelection prospects:
The median American salary fell to $26,364 in 2010, the lowest real level since 1999. (The wage data includes part-time workers which is why it’s so low.) And there are 5.2 million people who had a job in 2007 but who didn’t earn a penny in 2010.
Less employment and lower pay is decidedly not the way to win the future. Add in the sharp decade-long decline in total household wealth, and it’s extremely difficult to map out what "recovery" is supposed to look like. The prospect of what I believe is the first generational decline in the standard of living for average Americans is by far the most pressing political issue of the day, or it ought to be.
At the Republican debate the other night, Rick Santorum, of all people, had a very interesting comment which addressed a major underlying symptom of the crisis:
Believe it or not, studies have been done that show that in Western Europe, people at the lower parts of the income scale actually have a better mobility going up the ladder now than in America.
He’s right. I’ve touched on this before, but here is a chart of relative income mobility among Western nations:
This means that an American child born into the bottom fifth of the income distribution is more likely to remain there throughout his life than is his counterpart in every advanced European country except the UK. This is not a symptom of the global economic downturn, it’s an American (and British)malady. It’s often said that our system is designed to promote equality of opportunity, not equality of outcomes. But we do neither well.
So, just after citing this important data, in a surprise move, Santorum said that this clearly shows that the U.S. needs to undergo a major expansion of the social welfare state so we can reach Scandinavian-like levels of class mobility and economic dynamism. He then made an impassioned argument in favor of universal health care, free education from birth through university, and generous federal maternity and paternity leave, all paid for through a steeper progressive tax structure and higher rates.
Well, no, not exactly. In fact, in a remarkable real-time display of cognitive dissonance, he sort of came to the opposite conclusion, and started talking about all sorts of supply-side tax cuts for manufacturers:
I believe [the lack of income mobility in America] is because we’ve lost our manufacturing base. No more stamp "Made in America" is really hurting people in the middle.
And that’s why I focus all of the real big changes in the tax code at manufacturing. I cut the corporate rate for manufacturing to zero, repeal all regulations affecting manufacturers that cost over $100 million and replace them with something that’s friendlier, they can work with. We repatriate $1.2 trillion that manufacturers made overseas and allow them to bring it back here, if they invest in plants and equipment. They can do it without having to pay any — any excise tax.
Is this really true? That the collapse of American manufacturing has lead to a decline in income and class mobility?
Manufacturing employment certainly has fallen in this country; however, our total manufacturing output has continued to increase dramatically. This is due to productivity gains and to the fact that Americans work ever-longer hours.
For Santorum’s thesis to be right, European countries with better socioeconomic mobility must have even more robust manufacturing sectors than the U.S. This isn’t true at all, however.
The same forces that have eroded our manufacturing employment base—lower labor costs in Asia chief among them—have done the same for every advanced economy. It’s not like big manufacturers in the U.S. are packing up the plant and relocating to Denmark. Santorum’s prescriptions are incoherent.
I really don’t mean to pick on Rick Santorum, who has plenty of Google-related problems of his own, and whose election prospects are such that the nation will never be turning its lonely eyes to him. He actually deserves credit for trying to bring attention to the hardening class structure in this country, which really undercuts the Republican mythos of America as a place where people can transcend the unlucky circumstances of their birth merely through various bootstrap manipulations.
Though Santorum acknowledges the problem, the fact that he is wholly incapable of drawing any useful conclusions is indicative of the Republican party’s larger failure when it comes to addressing the concerns and anxieties of the working and middle class. David Frum—almost alone on the right—has been lamenting this failure of his party for a long time. As the steady stream of rotten statistics pile up, Frum reminds us that economic mobility is not our only problem:
Conceptually, you could imagine a highly unequal society with rapid income mobility. You could imagine a society with little mobility, but in which all classes were getting richer at approximately the same pace. America, however, is a society of widening inequality, hardening class lines, and stagnating living standards for most people.
Eventually, sometime, I have to believe that ignoring or obscuring these problems will become politically untenable. We desperately need a two-party consensus in this country that at least recognizes the fissures and deficiencies in our social contract; then we can quibble about the remedies. But we’ll remain in big trouble so long as the spectrum of Republican solutions runs from covering the ears and shouting "American exceptionalism!" to the better-but-awful Santorum line that says if only we cut taxes and slash regulations we’ll be more like Denmark. Actual conservatives in this country really deserve better, and I hope they demand it soon.