Middle class revolt

Discussion in 'Economics' started by dddooo, Sep 20, 2005.

  1. A revolt is brewing in the middle class

    Something is brewing in Portland, and it isn't coffee.

    This metropolis that is so often listed among America's most livable cities is living the economic crisis of our time.

    For three consecutive years median income in Portland has declined, City Commissioner Sam Adams said last week at a conference of editorial writers from around the nation. After taking a vicious hit when the tech bubble burst, jobs are back. Good wages aren't. "We are getting our butts kicked in the world economy," Adams says.

    This is not Detroit or Pittsburgh or a town in the textile belt. This is the prototype of the places we were told would catch the globalization wave and ride it - not be drowned by it. The Portland area has a young, educated and agile workforce, a spectacular location with easy access to the Pacific, and economic synergy with innovative neighbors in California and Washington.

    But its middle class struggles to stay in the middle.

    Oregon has regained the jobs it lost during what was, for this state, a deep recession. But when the semi-conductor industry rebounded, says David Cooke, an economist with the state employment department, many new jobs went to Asia. "A lot of that production is being done in other countries where wages are much lower," he said in an interview.

    The state's biggest recent job gains have come in "leisure and hospitality" - the hotels and restaurants that are notorious for low pay and often nonexistent benefits. Work is to be found in serving the well-off.

    And so, in a town where local pollster Tim Hibbetts says the political spectrum usually ranges from "liberals to strong liberals to ultra-liberals to leftists," a different undercurrent is churning. "There's a lot of simmering anger out there, and it's mostly in the broad middle," he says. In his polls done in Oregon and elsewhere, about 80 percent of voters say they are worse off, or no better off, than they were a year ago. The discontent is national and chronic - and chronically ignored.

    Neither political party gets it.

    Before Katrina, before $3-a-gallon gas and before the latest airline bankruptcies reminded middle-class workers that they are one corporate strategy away from losing their paycheck and their pension, the middle class was overburdened and burning out. It doesn't understand why globalization is good if it is so obviously concentrating wealth, not spreading it. It's furious that it works hard and plays by the rules, as Bill Clinton used to say, but loses anyway.

    It is fed up with a political system that hasn't seen fit to even talk about this turmoil as a first step in groping toward a solution. "We are facing globalization - I don't think we have the capacity to change that," says Adams. "But what's the backup plan?"

    There isn't one. That's why the primal scream that Washington does not yet hear will become deafening, and soon. It is not just Katrina and Iraq and frayed national nerves over terrorism. Any politician who believes this risks a layoff. Median household income, adjusted for inflation, has fallen for five straight years, according to an Economic Policy Institute analysis of government data.

    The political moment most resembles 1992, when Ross Perot burst onto the scene, a pyrotechnic display of middle-class frustration. The upheaval continued in 1994, when voters turned the Democrats out from control of what had been their congressional kingdom.

    No one can know what form the coming middle-class revolt will take. But any politician who wants to survive had better be able to answer some questions.

    If we are no longer to expect employers to provide affordable health insurance or decent pensions, what is the alternative? If the unrestrained forces of globalization don't benefit - and indeed, hurt - the broad middle class, what would you do to restrain them? If education and innovation are the answers, then what are the education and innovation strategies?

    Really, what's the backup plan?
  2. Yes, the middle class *are* revolting, aren't they?

  3. Mvic


    What might send people over the edge is when masses of American's have to declare BK because health care is getting more expenisve and yet people are losing their benefits (medical costs being a large precipitator of BK), and then they realize that they are going to be indentured for the rest of their lives because of the new rules.

    We are either going to develop a large barter or underground economy or there will be a lot of public protest and discontent.

    The question that I have longer term is will this spur creative thinking, entreprenurial spirit, and better cost and risk management (now that the BK escaoe is more onerous) and make the law produce a net positive?
  4. Maybe they will get mad enought to demand that the goverment privatize itself so they can cut out about 30% in wasted taxes.
  5. I don't think the article is about taxation or government waste. It's about the fact that there are no high paying jobs in the city, the only new jobs are low paying no-benefit jobs in leisure and hospitality industry. Trust me, If they are making $5.15 hr working for McDonalds they are not worried about taxes. They are not paying taxes on minimum wage.
  6. So far, the only thing that's kept the middle class afloat has been rising equity in their homes, allowing them to keep borrowing. Once that spigot stops, the pain will set in.
  7. oregon is one of the most liberal states in america. they regulate business to death. they even have regulations that say you cant pump your own gas in that loony state.
  8. That's called government "job creation."
  9. i think its called "the gas station owners print money protection act"
  10. an oregonian revolt would be one extra "Hate Bush" sticker on the back of their honda crv window.

    another group WAITING for their self-entitled "high paying job" -- what a joke!
    #10     Sep 20, 2005