Real Class War Is Working to Keep Those Below You Down

Contrary to popular belief, the United States is not a meritocracy, and amid cries of class warfare, Americans are getting the worst of both worlds.

By Joshua Holland, AlterNet
Posted on September 19, 2011

That conservatives are greeting the deficit reduction package Barack Obama presented on Monday – one that includes a new minimum tax on millionaires – with howls of 'class warfare' is as predictable as the sun rising in the east. It's a poll-tested talking point, after all.

But it obscures a far more pernicious form of “class warfare” being waged from above – a war of attrition against the upward economic mobility of ordinary working people. We live in a country where most people believe their opportunities are limited only by their innate talents and appetite for hard work, but over the last four decades, while decrying a wholly imaginary class war from below, conservative policies have undermined many of the ladders by which working people once achieved a middle-class lifestyle. Taking pot-shots at another class isn't war, nor is imposing a modest tax increase on those who have been showered with tax cuts for the last decade. Genuine class warfare is those at the very top working to keep everyone else far beneath them.

That's a story that doesn't fit neatly onto a bumpersticker. The standard reply to right-wing bloviating about “class warfare” is essentially an appeal to the authority of billionaire investor Warren Buffet, who famously said, "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."

It's an undeniably true statement: in 1979, those in the top 10th of 1 percent of the American economic ladder took in 1.11 percent of the nation's income, but by 2008, they were grabbing 5 percent. Those extremely wealthy few didn't become five times smarter and aren't working five times harder than they were in the late '70s, and the seismic shift in our economic structures wasn't an accident: the upward redistribution of wealth in this country has been a direct result of policies for which those at the top have lobbied hard – labor policies, trade deals, cuts to the social services that lifted some of those at the bottom out of poverty and a tax structure that shifted a big chunk of the burden from corporations and the wealthiest to ordinary working families.

Yet that retort only scratches the surface. Conservatives wage a far more damaging form of warfare when they attack the means by which people were once able to move up the economic ladder. They've done so with gusto, and as a result, the upward mobility that once defined America's great economic experiment is now little more than a fond memory, undermined by the Right's knee-jerk anti-governmentalism and an almost fascistic hostility to organized labor.

Most people aren't even aware of that reality. The belief that we live in a perfect meritocracy remains widespread. Around 3 percent of Americans are actually millionaires (or were before the crash of 2008), but in 2003, almost one in three told Gallup that they expected to be millionaires at some point in their lives. A 2006 poll found that more than half of those surveyed believed “Almost anyone can get rich if they put their mind to it.”

Conservative discourse about the “undeserving” poor being where they are because of some inherent personal faults might make some sense if we were all born with the same opportunities to get ahead. Tragically, however, in today’s economy, the single greatest predictor of how much an American child will earn in the future is how much his or her parents take home.

But, according to a study of public opinion in 25 wealthy countries, Americans are almost twice as likely as those in other advanced economies to believe that “people get rewarded for intelligence and skill.” At the same time, fewer than one in five say that coming from a wealthy family is “essential” or “very important” to getting ahead—significantly lower than the 25-country average. It’s impossible to overstate the impact these beliefs have on our policy debates. Americans are less than half as likely as people in other wealthy nations to believe that it’s “the responsibility of government to reduce differences in income.”

Working Americans have essentially bought into a unique social contract: they forgo much of the economic security that citizens of other wealthy countries take for granted in exchange for a more “dynamic,” meritorious economy that supposedly offers them plenty of opportunities to succeed. Of course, this is never explicitly stated, and most of us don’t know about the deal, but it’s reinforced all the time in our public discourse.

But, contrary to that popular notion, the United States is not a meritocracy, and Americans are getting the worst of both worlds—not only is a significant portion of the middle class hanging on by the narrowest of threads, not only do fewer working people have secure retirements to look forward to, not only are nearly one in seven Americans uninsured, but working people also enjoy fewer opportunities to pull themselves up by their bootstraps than do the citizens of other advanced countries.

In reality, the United States’ much-ballyhooed upward mobility is a myth, and it appears to be getting worse with each new generation. Several studies released in recent years suggest that Americans enjoy significantly less upward mobility than do the citizens of a number of other industrialized nations. German workers have 1.5 times the upward movement of Americans, Canada’s economy is nearly 2.5 times as mobile, and Denmark is three times as mobile. Norway, Finland, Sweden, and France (France!) are all more upwardly mobile societies than the United States. Of the countries included in the studies, the United States ranked near the bottom; only in the United Kingdom was it tougher to shake off a low social status one had been born with.

What's more, an American in today’s workforce is just as likely to experience downward mobility as he or she is to move up in the world. A study conducted by Julia Isaacs, a fellow with the Economic Mobility Project, used a unique set of data that allowed her to directly compare the incomes of Americans in the late 1990s and the early 2000s with the incomes of their parents’ generation in the late 1960s. She categorized families as belonging to one of four groups: the “upwardly mobile,” who do better relative to their parents; those “riding the tide,” families that earn more than their parents did but remain in the same relative position on the economic ladder; those “falling despite the tide,” a small group who are earning more than their parents did but who nonetheless fell into a lower position on the ladder; and those who are “downwardly mobile.” The key take-away was that American families are just as likely to be downwardly mobile—33 percent fall into this group—as they are to join the 34 percent who move up.

It should come as no surprise that roughly speaking, the decrease in relative mobility from generation to generation correlates with the rise of “backlash” conservatism, the advent of Reaganomics, and the series of massive changes in industrial policies that people loosely refer to as the “era of globalization.”

The United States is the only advanced country in which the federal government is not directly involved in higher education. That has helped drive dramatic increases in the average cost of a college education since the post–World War II era. At more than $7,000 in average yearly costs (in 2009), a public university education in the United States is a lot more difficult to finance than it was a generation ago. That negatively affects mobility; a college degree remains a valuable “bootstrap” with which one can raise oneself up the economic ladder.

Isabel Sawhill of the Brookings institution looked at the relationship between education and mobility (PDF) and concluded, “At virtually every level, education in America tends to perpetuate rather than compensate for existing inequalities.” A society with a weak education system will, by definition, be one in which the advantages of class and family background loom large. The U.S. education system is largely funded through state and local property taxes, which means that the quality of a kid’s education depends on the wealth of the community in which he or she grows up. This, too, helps replicate parents’ economic status in their kids. Finally, Sawhill noted, in the United States, unlike other advanced economies, “access both to a quality preschool experience and to higher education continues to depend quite directly on family resources.”

Another major factor is the decline in organized labor and solid, good-paying manufacturing jobs. Those jobs once represented another bootstrap that is now disappearing.

There’s also an inverse relationship between how robust a country’s social safety net is and the degree to which working families face the prospect of downward mobility. For example, countries that have generous unemployment benefits show a clear trend: offering displaced workers more assistance (a) extends the period of unemployment (which tends to be the focus of most conservatives) and (b) also means that when working people do reenter the workforce, they do so at a higher average wage.

There’s a similar dynamic in terms of health care: people with access to paid sick leave and other health benefits switch jobs less frequently than those who don’t enjoy those bennies, and as a result, they have longer average tenure and higher earnings.

In these areas, the United States has felt Jacob Hacker’s “great risk shift.” Hacker described how the U.S. “framework of security has unraveled, leaving Americans newly exposed to the harshest risks of our turbulent economy: losing a good job, losing health care, losing retirement savings, losing a home—in short, losing a stable, financial footing.” All of those hardships offer unique opportunities to fall out of the middle class—opportunities for downward mobility that simply don’t exist for the Canadian or French worker, people who can rely on a more progressive state to help preserve their income levels when disaster strikes.

Ultimately, the take-away from the decline in American upward mobility is that the existence of a middle class is not a natural phenomenon. It was created by providing good quality public education, mandating minimum wages, and guaranteeing working people the right to organize.

Conservatives have spent the last three decades unraveling those kinds of protections—all have been subjected to death “by a thousand small cuts” since Reaganomics hit the United States. As a result, it has once again become true that the accident of one’s birth dictates one’s life chances to a very large degree, and that is a wholly predictable result of the rise of the conservative backlash.