Who Shrunk the Middle Class?

Are you one of those people who hasn’t had a raise in the last half dozen years? Or maybe you have even had your wages and hours cut? Or do you own a small business here in Cape May County and find that you have fewer customers coming in the door, and when they do come, they have fewer dollars to spend?
If that describes your situation, join the crowd. The New York Times recently reported that the lower 80 percent earned 39 percent of personal consumption expenditures in 2012, down from 47 percent in 1992. In contrast, the top 20 percent received 38 percent, up from 27 percent for the same period. That is around a 20 percent drop versus a 50 percent increase.
We all know that major changes have taken place in our nation and we feel at a loss to know what to do. Depending upon our age, these changes are impacting us differently, and the younger we are, the more adjustment we have to make in our lives in order to cope.
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Young people, look around; the top 20 percent did not increase
their portion by 50 percent by relying upon government
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The fact is, it is the entire world economy, which has undergone a massive globalization transformation, has been brewing for several decades. While these changes have made the people of the world much more productive, they have particularly impacted America’s middle-class workers by generating vastly increased competition. As a result, American middle-class wages are not increasing because that is what competition does – it keeps prices down.
Why has the middle class lagged and our nation’s top earners advanced significantly? It is simply supply and demand. If I have something that a lot of people want, demand drives up the price.
Globalization has served the top earners very well because they understand how this new world order works. While the middle class, on the other hand, know how to do things that a lot of other people have now learned how to do and the growing supply keeps the value down.
Over the last couple of centuries the world has seen the advent of the Industrial Revolution, the Information age, and now we are transitioning into the era of the creative mind. In this, our new era, imaginative people have a worldwide market for what they create. Creativity is America’s long-standing specialty.
If America is to maintain a world-leadership role and maintain the enviable standard it enjoys, we must retain the qualities which have made us leaders up until now. Here is where our politics come into play.
The liberal left offers that a government-led approach is needed to lead us out of the doldrums and into greater prosperity, and that the higher taxes for enhanced government programs will pay dividends. The conservative right, on the other hand, holds that the solution can only be found in the individual motivated by self-interest and low taxes that enable him to keep more of what he produces. They argue that people freed to pursue their own self interests is what made our nation, and that nations which are government-led perform much less well.
Nothing short of extreme inventiveness will win the day for America. Even Mr. Obama was quick to offer that government is lacking in creativity, and it is because of this lack that the ObamaCare rollout failed.
With the challenges we now face, nothing short of America’s traditional rugged individualist will serve. And to you young people, look around; the top 20 percent did not increase their portion by 50 percent by relying upon government. Nothing short of your own individual best is going to reward you, and simultaneously restore America’s exceptionalism.
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From The Bible: O Lord God Almighty, who is like you? You are mighty, O Lord, and your faithfulness surrounds you. Psalm 89:8