The anxious society: middle-class insecurity and the crisis of the American dream

Humanist, Sept-Oct, 1996 by Charles J. Whalen

Middle-Class Insecurity and the Crisis of the American Dream

The American Dream is in crisis. The 25-year golden age that followed World War II has been replaced by an equally long period of economic insecurity for most U.S. citizens. Middle-class Americans saw themselves as part of the "affluent society" of the 1950s and 1960s, but that image has since given way to what is perhaps best described as the "anxious society" of the 1990s.

Conventional measures indicate that the U.S. economy is strong. But the middle class has good reason to feel ill at ease. As economist Stephen Roach put it in the June 16, 1995, New York Times, one of the toughest realities for working families in the 1990s is that "the line between recession and recovery has been blurred as never before." To understand what all the fuss is about, consider the following facts.

* In the past few years, hundreds of thousands of workers have been affected by corporate downsizing. The Associated Press provided an all-too-vivid snapshot of our era when it reported a few months ago on the experience of Bill Means, an engineer at a computer software firm in Ohio. Means was terminated and escorted off the company's property on "Take Our Daughters to Work Day" while his eight-year-old daughter looked on in disbelief.

* According to a Census Bureau report, job search in the 1990s takes longer than it did in the 1980s. The report also finds that workers losing jobs recently have seen their wages drop an average of more than 20 percent upon regaining full-time work.

* The real purchasing power of wages for the average American has been falling since 1973. Average hourly earnings are now lower than they were in 1965; weekly earnings are lower than they were in 1959. Median family income has fallen 7 percent in real terms since 1989.

* No other industrial nation approaches the United States in multiple job holdings. To quote one worker's response to a boast by President Clinton: "Don't tell me about the millions of new jobs created--I've got four of them and I'm not all that impressed."

In the early postwar period, public officials demonstrated their interest in the middle class and the vitality of the American Dream by seeking to reduce the nation's unemployment rate. But today's widespread economic insecurity requires much more. Just as no single statistic of overall national performance can adequately reflect economic reality, no individual policy initiative can reinvigorate the American Dream.

Today the nation's goal can be nothing less than an economy in which everyone has the opportunity to develop and utilize their marketable talents and capacities--an economy that rewards workers with a rising standard of living and the prospect of an even better life for their children. And moving society toward this objective requires a new look at a broad policy landscape. Among the issues that must receive fresh attention as part of such an agenda are jobs, welfare, and the budget.

JOBS

Human-resource professionals talk of two routes to competitiveness: the "high-performance" path and the "low-wage" path. Policies used widely in Europe and the Pacific Rim encourage firms to follow the first of these approaches. In the United States, meanwhile, a policy vacuum has caused most firms to follow the low-wage path. The middle class cannot survive unless America changes its competitiveness course.

In Germany and Japan, for example, taxes and subsidies encourage corporations to compete in ways that involve worker retention, retraining, and the upgrading of skills. In addition, many countries have recently linked clearly defined technology policies to national business-assistance networks modeled after the American agricultural extension service. It's time for the United States to create incentives that encourage job creation through developments of new products, technologies, and markets--and to end subsidies for plant closings and relocations abroad.

The federal government should make tax breaks and certain types of regulatory relief available to firms that do any of the following: allow workers to share in productivity and profitability gains; offer family-friendly employment benefits and work arrangements; and foster employee participation from the workplace to the boardroom. Public policy must also address the fact that this country has one of the worse labor-market adjustment systems in the industrialized world. Free markets have many wonderful features but are seldom efficent when it comes to managing a nation's transition from school to work--and are often even worse at enabling workers to move smoothly between jobs.

The apprenticeship and skill-certification programs found in Germany represent one set of initiatives consistent with a high-performance path. Another successful approach to training is the group of education centers funded by an employer-training tax in Australia and France. There are also effective job-search and relocation-assistance programs in such nations as Sweden and Japan. A common-sense American approach to jobs in the late 1990s requires government, school, and industry collaboration that builds on creative efforts such as these. Also needed are complementary reforms that make pensions portable and ensure the accessibility of health care.