EVERYONE KNOWS that our middle class has been declining for decades, and that there’s no end in sight. But despite much hand-wringing, no one really knows what to do about this.
The proximate causes of middle class decline have been globalization, automation and de-unionization. These put an end to the golden age of our middle class after World War II, when American corporations dominated world markets and paid good wages at home.
The deeper cause of middle class decline is the structure of our economic system. Unless counter-balanced, our system inexorably concentrates wealth at the top. Thus, as the graph below shows, the richest 1 percent have been extracting a rising portion of our economic gains since at least 1980.