America’s Class Divide

When the New York Times and The Wall Street Journal each launch a series on class in America, as they did this past spring, it is tempting to think they might be onto something.

The gap between rich and poor in America has been widening since about 1973 – a fact so often reported it is no longer news. But the more the two papers looked into it, the grimmer the details.

The Times identified a new class of super-rich who thumb their noses at the merely wealthy. They evidently hide out on Nantucket, R.I., waiting to strike up a conversation with someone else who owns a boat (preferably a smaller one).

Among this top one-thousandth, the Times found, the average income is around $3 million _ more than twice what it was 20 years ago. Over the same 20-year period, this group’s share of the national income also more than doubled _ while the share earned by the bottom 90 percent of Americans fell.

The Times’s David Cay Johnston, who may be our most gifted reader of the national ledgers, looked at an even wealthier group, the top 0.01 percent. For every extra dollar earned by the bottom 90 percent of households in 1950-1970, these 14,000 or so households earned an extra $162. But in 1990-2002, the platinum class got an extra $18,000 for each extra dollar earned by the bottom 90 percent.

Those who fantasize about joining the super-rich should not pick out Jaguar colors just yet. The Wall Street Journal discovered that upward mobility in America is not what we thought. The data show impoverished children in Canada and Europe (where income gaps are smaller) have a better chance at moving up than American youngsters do.

Americans fervently believe that they live in a meritocracy _ that things are fair. But in laborious detail, the two series suggest how little that faith squares with reality.

Parents’ wealth (or lack of it) tends to dictate a child’s eventual economic roost, The WSJ reports; not even IQ is much of a factor. In The Times’s excellent phrase, we have achieved a kind of “inherited meritocracy,” with the children of the well-off dominating college campuses far more than they did 20 years ago.

At the bottom, meanwhile, promotion paths have become scarcer. One study cited by The WSJ found that, in the ’60s and early ’70s, only 12 percent of beginning workers were still stuck in low-wage work 10 to 15 years later. But for those who entered the labor force in the 1980s and early ’90s, 28 percent were stuck.

The usual suspects cited in the widening imbalance are globalization (with its outsourcing), technology, and unregulated markets. Unions, which once provided a healthy floor for middle-class wages, represented only 12.5 percent of workers last year, the lowest level in more than 60 years. (The private sector is at levels unseen since the early 1900s.)

Government policies can temper these trends. But you will not see many such counter-thrusts from the Bush administration, which seems dedicated to nourishing the gap.

The Bush tax cuts have brought huge benefits especially to the super-wealthy, who, according to The Times analysis, will pay a smaller share of their income than the merely wealthy as time goes on.

Many have noted that cutting taxes is a strange move when you have a war to pay for, and with it a burgeoning national debt. But who does not like extra cash? George and Laura Bush, for instance, managed to save almost $29,000 on their taxes this year, thanks to the president’s cuts, according to Citizens for Tax Justice.

Meanwhile, we have a new take-no-prisoners bankruptcy bill that will punish the unlucky along with the unthrifty; colleges that fewer working-class Americans can afford; and incomes for working families that would be nearly stagnant if, 30 years ago, women had not headed for the office in droves.

Americans seem to tolerate the growing gap by clinging to the idea that anyone who works hard can prosper. They equate success with virtue, or at least talent. But the odds have lengthened, partly because the winners have been rigging the game in their favor.

Here, for once, George W. Bush leads by example. His repeated failures in the oil business have been well documented. As Joe Conason, author of “Big Lies,” tells the story, cronies repeatedly came to W’s rescue (also to his brothers’) in hopes of buying influence with a powerful political family. Taxpayer bailouts also kept the Bush boys solvent more than a time or two.

George W. Bush’s success came, finally, with his stake in the Texas Rangers baseball team. But not before the City of Arlington had been strongarmed into helping build a new stadium _ and using the power of eminent domain to eject a family from their nearby land. (A stunned jury awarded the family $4 million _ to be paid by Arlington taxpayers.)

Shortly after the stadium was finished, Conason reminds us, Bush announced he would be campaigning for governor _ on a theme of self-reliance.

The trouble with all this _ the growing income gap, the rise of crony capitalism _ is not so much that average Americans are stuck with a smaller share of stuff, or struggling harder to make do. It is that these trends erode, and can ultimately destroy, democracy.

When all the power is tilted toward insiders, the rest of us cease being participants. We are good only for our money and our manpower. Feudalism comes to mind.

The world today is not the one Baby Boomers grew up in, with its robust middle class. Is it reading too much between the lines to sense this is not, entirely, an accident?

(M.J. Andersen is a member of The Providence Journal’s editorial board.)