The World the New Deal Built Has Been Destroyed

The American middle class has toppled into a world of temporary employment, jobs without benefits, and retirement without security.

10/30/07 “American Prospect” — — Last week over lunch, a friend in his 30s prodded me to explain how my generation, the boomers, had botched so many things. While not exactly conceding that we had, I said that the one thing none of us had anticipated was that America would cease to be a land of broadly shared prosperity. To be born, as I was, in mid-century was to have come of age in a nation in which the level of prosperity continued to rise and the circle of prosperity continued to widen. This was the great given of our youth. If the boomers embraced such causes as civil and social rights and environmentalism, it was partly because the existence and distribution of prosperity seemed to be settled questions.

Nor were we alone in making this mistake. Our parents may have gone through the Depression and could never fully believe, as boomers did, that the good times were here to stay. They remembered busts as well as booms. But the idea that the economy could revert to its pre-New Deal configuration (in which the rich claimed all the wealth the nation created while everyone else just got by), the notion that the middle class might shrink even as the economy grew: Who, among all our generations and political persuasions, expected that?

Yet that’s precisely what happened. Median family income over the past quarter-century has stagnated. The economic rewards from increased productivity, which went to working-class as well as wealthy Americans from the 1940s to the ’70s, now go exclusively to the rich. The manufacturing jobs that anchored our prosperity were offshored, automated or deunionized; lower-paying service-sector jobs took their place.

It’s no great achievement for a people to recognize that their nation’s economy has tanked, but recognizing that their nation’s class structure has slowly but fundamentally altered is a more challenging task. It’s harder still for a people who are conditioned, as Americans are, not to see their nation in terms of class.

Which is why a poll released this month by the Pew Research Center reveals a transformation of Americans’ sense of their country and themselves that is startling. Pew asked Americans if their country was divided between haves and have-nots. In 1988, when Gallup asked that question, 26 percent of respondents said yes, while 71 percent said no. In 2001, when Pew asked it, 44 percent said yes and 53 percent said no. But when Pew asked it again this summer, the number of Americans who agreed that we live in a nation divided into haves and have-nots had risen to 48 percent — exactly the same as the number of Americans who disagreed.

Americans’ assessment of their own place in the economy has altered, too. In 1988, fully 59 percent identified themselves as haves and just 17 percent as have-nots. By 2001, the haves had dwindled to 52 percent and the have-nots had risen to 32 percent. This summer, just 45 percent of Americans called themselves haves, while 34 percent called themselves have-nots.

These are epochal shifts, of epochal significance. The American middle class has toppled into a world of temporary employment, jobs without benefits, retirement without security. Harder times have come to left and right alike: The percentage of Republicans who call themselves haves has declined by 13 points since 1988; the percentage of Democratic haves has declined by 12 points.

This equality of declining opportunity, however, isn’t matched by an equality of perception. The percentage of Democrats who say America is divided between haves and have-nots has risen by 31 points since 1988; the percentage of Republicans, by just 14 points. Indeed, though that 13-point decline in Republicans who call themselves haves has occurred entirely since they were asked that question in 2001, the percentage of Republicans who say we live in a have/have-not nation has actually shrunk by one point since 2001. (It had increased 15 points from 1988 to 2001.) Apparently, so great is Republicans’ loyalty to the Bush presidency that they’re willing to overlook their own experience. And, in many cases, to attribute the nation’s transformation solely to immigration, rather than to the rise of a stateless laissez-faire capitalism over which the American people wield less and less power. Which helps explain why Republican presidential candidates bluster about a fence on the border and have nothing to say about providing health coverage or restoring some power to American workers.