by DowneastDem
Mon Jan 2nd, 2006 at 09:45:15 AM EST
There has been some great discussion on this blog about different economic models - especially as they pertain to European politics. The US provides a good view of "neo-liberal" (sometimes called here "Anglo-Saxon") economic policy when carried out to its logical conclusion.
Harvard professor Elizabeth Warren has a disturbing piece in the most recent issue of Harvard Magazine on the declining fortunes of the American middle class. Prof. Warren points out that two-income families have become the norm - and an absolute necessity - for the middle class family, yet two earners today have less discretionary income than one earner a generation ago. Today, 75% of family income goes to pay fixed monthly expenses: mortgage, car payments, insurance, childcare. The loss or disruption of one of these incomes would have disasterous consequences for most families.
In other words, today's family has no margin for error. There is no leeway to cut back if one earner's hours are cut or if the other gets sick. There is no room in the budget if someone needs to take off work to care for a sick child or an elderly parent. Their basic situation is far riskier than that of their parents a generation earlier. The modern American family is walking a high wire without a net.
Then there is this
tidbit from a
New York Times editorial this morning:
The same report, by the Institute for Policy Studies, a left-leaning research center, and United for a Fair Economy, a group seeking to narrow the gap between rich and poor, found that in 2004 the ratio of C.E.O. pay to worker pay at large companies had ballooned to 431 to 1. If the minimum wage had advanced at the same rate as chief executive compensation since 1990, America's bottom-of-the-barrel working poor would be enjoying salad days, with legal wages at $23.03 an hour instead of $5.15.
So what are the political consequences of an American middle class on the decline coupled with growing income disparity? Professor Warren doesn't speculate, but I cannot help but feel that it does not bode well for the future of Democracy in the US.
