Class warfare – such a vivid phrase. It conjures up images of the poor rioting while the nobility revel in luxury, or perhaps of a guillotine neatly snipping off a jewel encrusted head. One segment of society pitted against another in a struggle for wealth, power and freedom. In Eugene Delecroix’s iconic painting of the French Revolution, bodies are strewn across the ground as smoke envelops 19th Century Paris.
Similar scenes play out daily on our televisions, but seem to always be broadcast from some far off place. What a terrifying thought that with the wrong fiscal policies, our great society could degenerate overnight, and our own streets and neighborhoods could be running with blood.
Frightening as that may be, let’s set aside the doomsday circumstances of Delacroix’s painting for a moment, and examine only the characters on the canvas. These revolutionaries bear quite a resemblance to the everyday Americans found strolling through any mall in America – and not just in terms of Lady Liberty’s outfit. The artist deliberately represented educated members of the middle class as part of the people’s movement along side the working class and the poor. To frame this crowd up in modern terms, we’re looking at the white collar yuppie, the blue collar worker and the unemployed poor who would jump at the chance to earn minimum wage. These are not the people who have their own reality shows, play sports on TV, or run companies who advertise on TV. These are the people who watch those people on TV and imagine what it’s like to be them – I would call them “the rest of us.”
Historically speaking, class warfare has consisted of tyranny by the very richest in society being challenged by – you guessed it – the rest of us. So here’s the obvious question: if America is spiraling into such a conflict, where are the images of anarchy, chaos and streets running with blood? When pressed on the issue, even the most ardent fearmonger will concede that this nightmare scenario simply does not exist today. There is however a well-documented movement in America to shift wealth and power from one class to another. It just might not be the one you hear about on the news.
First, the math
Let’s examine the middle class, still the largest in terms of population. By standard measures, the poverty line in America is around $22,000 annual income for a family of four. According to the U.S. Census Bureau, since the 1950s – the decade during which my parents were born – the 20th percentile of income earners has increased from below the poverty line at $20,000 annually (inflation adjusted) to nearly $50,000 today, a 150% increase. Not bad by any measure. Those we might call the “upper” middle class at the 95th percentile of income earners did even better, with annual income moving from $62,000 to $195,000, a more than 300% increase. As illustrated in the chart above, everyone in between also benefited from the upward trend.
The truly rich – not just comparatively rich like those with an internet connection that can read this blog – made out best of all. The top 1% of earners received around 10% of all U.S. income in the 1950s. Today, they receive nearly 25% of all income in this country. According to the IMF, the gap continues to widen as they take a big bite out of middle class income by lending to us out of their accumulated wealth. John F. Kennedy posited that “a rising tide lifts all boats,” and indeed the rising standard of living average Americans enjoy has distracted us over these last decades from the growing gap between the rich and – not only the poor – but the less rich.
So what about the poor? Surely they have ridden the rising tide just like we have. After all, we’re told by right-wing think tanks that being poor isn’t so bad, and they’re welcome to all of our middle class consumer hand-me-downs. Sadly, the 20th percentile of income earners have not enjoyed parity with the gains made by others. Since the 1950s they have increased from around $15,000 to about $27,000 today, continuing to hover at or below the poverty line – barely enough to maintain a roof over their heads and not starve. Any lower, and America would become home to the same type of slums found in third world countries. Added together, the roughly 15% of Americans living at or below the poverty line earn just 3.4% of income in this country. It seems unlikely then that taking any portion of what little the poor have will have a meaningful impact on our current economic quagmire.
How did we get here?
At around the same time that Delacroix began mixing paint, another revolution was quietly beginning in America. We know it as the Industrial Revolution, and it laid the groundwork for the last half century of wealth consolidation. Corporate entities were added to our legal framework and the first targeted tax relief legislated in the 19th century, all in an effort to make America more competitive in an increasingly global economy. To put it bluntly, it worked. The 100 years that followed saw us become the richest country on earth by far. But in fight to dominate global economics, our fiscal policy snowballed into the mess of lobbying, tax loopholes, tax havens, windfall tax credits and cronyism we have today.
If we’re fair, every economic class of Americans shares in the blame. Most of us have enjoyed a good ride, and are now secure in a lifestyle well out of reach for much of the world. But the poor in our country remain the exception. According to a recent report released by the Paris-based Organisation for Economic Co-operation and Development, out of 35 post-industrial economies worldwide, the U.S. ranks 4th from the bottom in terms of income inequality. The disparity isn’t only in terms of income, it’s also in terms of taxes paid as a proportion of income. A median wage single worker making $26,000 annually pays 23.4% of their income in taxes, compared to just 18.7% for those making more than $1,000,000.
This is not to blame the rich. They are simply doing what all Americans are taught from birth, to be all they can be – or from a slightly different perspective, to secure all the wealth that they can. The modern incarnation of the American promise has become life, liberty and the pursuit of more stuff. But at what cost to our society does this pursuit come?
There is little if any evidence that our system is crumbling under the weight of an over-sized government. Rather our laissez faire system has begun to cannibalize itself as the natural limits of its resources are reached. Chilean Economist Manfred Max-Neef, author of Barefoot Economics, explains far better than I can why the U.S. is becoming an “Underdeveloping Nation.” To summarize our predicament, as we max out on resources, there is no longer any way for the rich to keep getting richer, except at the expense of everyone else. If the poor have little left to offer, then the next century of growth among top earners can only come from the meat of the bell curve known as “the rest of us.” In layman’s terms, for nearly a century the middle class has actually been moving away from the wealthy and toward poverty.
So what of the class warfare claim? The evidence suggests that rather than a malicious attack by one group of Americans on another, the middle class slide toward poverty is simply the result of an uncorrected systemic flaw – hence this post’s title of “class poorfare.” What is certain is that for a society that idolizes wealth, self-interest and more of everything, we are at a dangerous juncture.
Can it be fixed?
I would argue that at very least the trend can be reversed. Certainly it seems shameful not to try. Returning income equality to the level it was at when my parents were born hardly seems likely to instigate class warfare. Yes, it means increasing taxes on the wealthy to be on par with the middle class. The myth of unlimited growth has been shattered, but the rich will in most cases maintain their extraordinary wealth. Yes, it means collectively helping the less fortunate. This too is easily within our reach without diminishing the lifestyles of the already more fortunate.
In order to do any of this though, we will have to work together, each willing to do our part. There are some positive signs. The Pew Research Center reports that a growing portion of Americans feel they now pay their fair share of taxes, rather than too much. An increasing number of rich and super-rich Americans are calling for reforms that would increase their own taxes to at least the share paid by lower wage earners.
There is however, plenty of opposition, plenty of misinformation, and lots of angry rhetoric. Oddly, the largest movement against these reforms comes from none other than the middle class. Especially disconcerting is the animosity toward co-operation (read government) and a mathematically unsupported view of the poor as the primary burden on our economy. Could it be that we have been blinded by our relentless pursuit of more? I know I have been guilty of this for much of my life. The fog has begun to lift however. I pray it will lift for more Americans as they begin to see which side of the divide they truly are on, and the self defeating nature of our me-first mentality.
This brings me to what I believe is the most important step we can take – and I address this to myself as much as any other – to put aside self-interest, pride and partisanship long enough to see the facts. We created this mess together, and must now work civilly and diligently to correct it. If we can do this, then the rising tide will continue for America – perhaps even lifting those run aground in poverty.
One final note – some still argue that while violent conflict hasn’t materialized yet, it inevitably looms on the horizon. It is for certain though, that whether the choice comes as a violent revolution, a visit to the ballot box, or an opportunity to share from our excess, each of us must decide not only what benefits us in the short term, but which side in this struggle stands for what we believe in. As a Christian, I know what my answer will be.
Did I miss something? Are you privy to facts I’ve not yet discovered? Set me straight in the comments.
Tags: Class Warfare, Freedom, taxes