The expression “the American Dream” appears frequently in the patriot’s lexicon. Yet its meaning is one that is difficult to pin down. It is used to describe many esoteric principals of American life. But perhaps most prominent among them is its usage to describe the idyllic image of the American Lifestyle, a meritocratic society of home and family earned and supported through gainful hard work. The idea of a uniquely American way of life emerged just as the United States was consolidating its position as international superpower. In many ways, it is the heart of the pervasive American exceptionalism that determined United States foreign policy throughout the 20th century.
The reality of the situation is soberingly distinct from the idealistic depiction. In the last several hundred years, the proportion of citizens of industrialized nations in the blue collar workforce has dropped sharply. Before widespread mechanization, when farming methods were significantly less efficient, as much as 95% (varying by climate) or more of a population were needed to work as farmers, to produce enough food to sustain the population as a whole. But with the onset of more effective farming methods and widely mechanized industry, the ratio of blue collar workers to white collar workers has declined steadily. Yet workers in the industrial, agricultural and service sector still make up a significant block of American jobs. But the economic growth of the last 32 years has largely ignored this group, the average quality of life stagnating or even declining.
From the end of World War II to 1976 the United States experienced a period of unparalleled economic growth. Advances in technology and skyrocketing wealth were accompanied by an unprecedented convergence of mean and median income: the difference in average and “middle” income shrank enormously, signaling a major decrease in income disparity and even distribution of wealth across the population. American society from 1945 to 76 was disparate in many ways, sexual and racial, yet wealth was hardly one of them.
So what changed? In the last three decades, the United States has witnessed a period of staggering class separation, the trend of wealth distribution abruptly becoming more, not less disparate. The United States' uninterrupted economic growth since the end of the Second World War was brought to a sudden halt by the 1970s recession and oil shocks, which ushered in a period of vastly increased wealth disparity, rising steadily until present day. Since 1976, America's wealth disparity has become progressively more pronounced. The highest tier of wealth has grown steadily wealthier, while the lowest tier has grown larger and larger, the middle ground steadily shrinking. The so-called "death of the middle class" refers to the increasing division between rich and poor, and the elimination of the middle ground.
In 1947, the average annual family income (adjusted for inflation) was $27,414, in the same year, the median income was $23,433. In a country with very little income disparity the median and mean incomes should be very close. A higher average income compared with the median indicates that the wealth of the highest income tier disproportionately affects the average income for the entire country. The disparity between median and mean reached its lowest point in the mid 1960s. But since then, the ratio between the median income and average income has shrunk. While both have risen progressively, the higher increase of the average income in relation to the median income signifies that far more of the additional wealth has been distributed to the top tier, rather than evenly across the population. In 1947, the average income was 17% higher than the median. In 2006, the median income was $58,407, and the average was $77,315, 32.3% higher than the median income. As the wealth of the country has steadily risen, so has the proportion of wealth concentrated at the top of the pyramid.
Source: Thomas Piketty and Emmanuel Saez, "Income Inequality in the United States, 1913-1998," Quarterly Journal of Economics, 118(1), 2003. Updated to 2005 at http://emlab.berkeley.edu/users/saez.
Source: Economic Policy Institute, State of Working America 2006-07, Table 5.1, citing Wolff (2006).
What has provoked this class upheaval? American wealth has continually been redistributed further and further towards the top. So where does this massive increase in income disparity come from? In part, it comes from the union. The mid 20th century was an era of enormous influence among unions. In 1945, nearly one third of all employed people were union members. By 1979 that number had fell to 24.1%, and by 1998 only 13.9% of American workers were unionized. Declining union membership is both a symptom and a cause of the decline in union influence.
Unions have been on the wrong end of an increasingly hostile political climate. With their chief goal being the protection of employment and benefits of their members, Unions have often found themselves to be in direct opposition to the increasing mechanization of industrial production. Automation of production saves labor, and by association allows the same jobs to be performed by fewer employees in less time, letting the additional profits be distributed farther towards the top. Labor unions have been largely unable to protect their members against the elimination of their jobs. Attempts to resist the mechanization of industry- effectively creating jobs by hamstringing industry efficiency have been opposed in particular by an increasingly pro-corporate political climate. And much of American industrial production has moved to the southern and western parts of the country, places with far weaker union tradition than the eastern and northern parts of the country.
Service industry unions, already traditionally weaker than their industrial cousins, have become further handicapped in particular by the changing face of their workforce. Younger workers, female workers and part time or temporary workers hold many of the new jobs created in the service industry in recent years, but have been historically far less receptive to union membership.
In addition, strikes, one of the main instruments of Union power became steadily more rare in the 1980s and 90s. The decline in union membership made strikes more difficult to organize and maintain. Employers were also emboldened by President Reagan’s own handling of strikes, firing striking air traffic controllers employed by the F.A.A. The spread of anti-labor sentiment among politicians is symptom of weakening union influence, and has helped to cement their decline. Losing major portions of their membership and funds over the last several years, unions have lost much of the political clout that they once had, and with it their power to elect pro-union officials has ebbed.
The union’s latest enemy is globalization. In the last half-century, with the increase in power of multinational corporations, the price of shipping and transport of goods has declined. This has allowed corporations to exploit non-union unskilled labor and ship it internationally for cheaper than using domestic, union labor. This has allowed employers to almost completely circumvent union influence, exploiting the desperation of third-world workers to break the backs of domestic unions.The traditional domestic and locally-oriented model of the union may be irreparably broken, unable to compete with the tides of globalization that make small unions fatally easy to bypass. However, the idea of the union has not been defeated, but rather forced to adapt to suit an increasingly global market.
But the gradual decline of the union is not the only cause, but it is a major contributor. Theories vary widely as to sources of the explosion in income disparity, but very few causes are clear-cut. Union’s declining power helped pave the way for anti-labor candidates to take office, causing most economic growth to be directed towards the top.
Yet some of the blame must inevitably fall on the “American Dream,” the cultural centerpiece that defines wealth as the measure of human value. The "American Dream" creates a climate in which the ultra-wealthy are revered rather than reviled, people who exemplify success in the perpetual American struggle for wealth, rather than the products of privileged beginnings and/or unscrupulous ambition. America's characteristic individualism breeds an "every man for himself" mentality, the belief that people are responsible for their own success, and have no obligations to aid the unsuccessful. The false perception of a meritocratic society perpetuates the myth that wealth is indeed earned based on merit rather than privilege. In the vast majority of cases, wealth ultimately produces more wealth, and poverty gives rise to further poverty.
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