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Sunday, January 15, 2012

What Happened To Our American "Classless" Society?

There are "perceptions among the public" of growing tensions between rich and poor Americans, according to a just released survey. That doesn't necessarily mean that there are huge tensions problems between the two groups but only that the public believes those problems exist.

In fact, those surveyed don't believe that governmental driven actions can address our many problems successfully nor do they believe that the rich are necessarily the villains in the very politically divisive story of income inequality being preached by many of our politicians.

Thus, our American dream is very much alive and is what separates us from most of the world. It's the "big idea" underpinning American exceptionalism where government isn't the answer to our ills, just as the rich aren't automatically resented for having already achieved material success. With hard work, peseverance, and some luck along the way, that opportunity is available to all of us and to our children as well.

In my view, any such divisive perceived "class warfare" based tensions are attributable to three factors; (1) the sorry state of the worldwide economy, including ours, (2) the Occupy Wall Street movement's endorsement by the media and (3) the irresponsible comments by several U.S. 2012 presidential candidates, including President Obama.

Of course, we definitely have more than our fair share of serious problems to address and solve.

For example, there is a need to focus more on creating high paying U.S. based jobs--especially manufacturing jobs--as unemployment remains high and jobs remain scarce. Our economy and employment levels have been in rough shape for several years now so, unsurprisingly, domestic conflicts and tensions have risen.

Now we'll try to make sense of this rather troubling situation.

First, let's review the survey's findings. Survey Finds Rising Perception of Class Tension reveals the following:

"About two-thirds of Americans now believe there are “strong conflicts” between rich and poor in the United States, a survey by the Pew Research Center found, a sign that the message of income inequality brandished by the Occupy Wall Street movement and pressed by Democrats may be seeping into the national consciousness.

The (2/3) share was the largest since 1992, and represented about a 50 percent increase from the 2009 survey, when immigration was seen as the greatest source of tension. . . .

The survey, which polled 2,048 adults from Dec. 6 to 19, found that perception of class conflict surged the most among white people, middle-income earners and independent voters. But it also increased substantially among Republicans, to 55 percent of those polled, up from 38 percent in 2009, even as the party leadership has railed against the concept of class divisions.

The change in perception is the result of a confluence of factors, Mr. Morin said, probably including the Occupy Wall Street movement, which put the issue of undeserved wealth and fairness in American society at the top of the news throughout most of the fall.

Traditionally, class has been less a part of the American political debate than it has been in Europe. Still, the concept has long existed for ordinary Americans.

“Americans have always acknowledged that there are Rockefellers and the lunch-bucket guy,” said Tom W. Smith, director of the General Social Survey at the National Opinion Research Center, based at the University of Chicago. “But they believe it is not a permanent caste, but a transitory condition. The real game-changer would be if they give up on that.”

Going by the survey’s results, they have not. Forty-three percent of those surveyed said the rich became wealthy “mainly because of their own hard work, ambition or education,” a number unchanged since 2008. . . .

The issue has also become a prominent part of the political debate. President Obama has pressed the case that income inequality is rising as election season has gotten under way. . . .

Independents, whose votes will be fought over by both parties, showed the single largest increase in perceptions of conflicts between rich and poor, up 23 percentage points, to 68 percent, compared with an 18-point rise among Democrats and a 17-point rise for Republicans. Sixty-eight percent of independents believe there are strong class conflicts, just below the 73 percent of Democrats who do. . . .

What is more, people at the upper middle of the income ladder were most likely to see conflict. Seventy-one percent of those who earned from $40,000 to $75,000 said there were strong conflicts between rich and poor, up from 47 percent in 2009. The lowest income bracket, less than $20,000, changed the least.

The grinding economic downturn may be contributing to the heightened perception of conflict between rich and poor, said Christopher Jencks, a professor of social policy at the John F. Kennedy School of Government at Harvard University.

“Rich and poor aren’t terribly distinct from secure and unemployed,” he said."

Let's turn now to the relative importance of U.S. based manufacturing to the rich-poor debate. Manufacturing has long been an important part of the U.S. economy, and its past, present and future role for American workers should not be underestimated.

The Factory Floor Has a Ceiling on Job Creation confirms that manufacturing has strengthened the past two years, but concludes also that it will never return to its strength of yesteryear. I agree.

A few excerpts follow:

"Manufacturing alone isn't going to put America back to work.

Recent news from the nation's factories has been good. In the past two years, manufacturing employment has grown by 334,000, a welcome upturn in a nation short of jobs. . . .

Manufacturing is up lately in part because it was pushed down so far during the recession. That 334,000 increase in factory payrolls follows a decline of 2.3 million in the two years before that. Only two million jobs to go before manufacturing employs as many as it did four years ago.

Manufacturing, as of the government's December tally, employed 11.8 million from loading dock to executive suite. If that doubled, which it won't, that still wouldn't be enough jobs to put the 13.1 million currently unemployed to work. Manufacturing accounts for less than 9% of all the jobs in the U.S. today.

CAPITAL

Manufacturing employment, as the chart accompanying this column shows, has been declining steadily for three decades in absolute numbers, and as a share of total employment for six decades. "These long-term trends related to technological change, productivity improvements and globalization are likely to continue," says Lawrence Katz, a Harvard University labor economist. He expects American factories to hire more as the economy improves, but adds, "We don't expect to restore agriculture as our primary source of employment growth. The same is true for manufacturing." . . . .

There are good reasons to cheer for domestic manufacturing. Expanding factories have beneficial side effects. "If you get an auto-assembly plant, Wal-Mart follows," says Ron Bloom, until recently President Barack Obama's manufacturing czar. "If you get a Wal-Mart, an auto-assembly plant doesn't follow."

Modern factory jobs, many of which require more brainpower and computer know-how than muscle, often pay well and are secure. Research and development—the key to maintaining the U.S. edge in innovation—sometimes migrate abroad when production does, a good reason to strive to keep production at home.

But manufacturing employment isn't going to grow nearly enough to return the U.S. to full employment. It isn't going to be the chief source of jobs for the next quarter-century. And, given the demands of the modern factory, it isn't going to be the ticket to the middle class for unskilled workers who haven't gone beyond high school. Pretending otherwise is foolish."

Let's summarize.

The current weak economy makes things difficult for all Americans, fat cats included. But it makes things tough particularly for those Americans who are poor and have limited skills.

What once were readily available and plentiful U.S. manufacturing and construction jobs have become scarce. Compared to the "good old days," they will remain hard to get.

We're not yet sure how to solve our longer term structural employment issues, but the impetus must come from the private sector.

Our U.S. based companies and individuals must resolve to become competitive globally. First, however, we need to understand and accept that the real competition isn't between America's economic classes.

In simple terms, we need to get a "better reality" about the world, its current competitiveness and its outstanding economic possibilities for future growth.

I'm more optimistic about our long term American potential than ever. The world is opening its doors to competition. Future worldwide economic growth and market opportunities will be huge. Big global market shares will be there for the most capable, well managed and innovative competitors.

Democratic societies and consumption oriented economies will continue to grow and multiply.

Capitalism is expanding, and the U.S. is well positioned to lead the way.

Still, our U.S. workforce in need of an upgrade, including better education and training.

At the same time, we can bring back lots of offshore manufacturing to the U.S., but we'll need more highly skilled workers combined with an all-in competitive wage scale to do so.

We need to develop fully our domestic energy capability as well.

Most critical, however, will be our collective American mindset. The "can do" spirit must take center stage.

America isn't just a place; it's an idea based on a wonderful set of ideals. We're a nation based on the inherent worth and dignity of each individual. We believe in individual freedom and equal opportunity for one and all.

And if we don't get things right the first time, we keep trying until we succeed.

Of course, we have many difficult problems facing us today.

But working together as members of a self governing society, we'll find and then implement appropriate solutions. It's always worked that way, and it will work that way again.

Then we'll find new problems to solve. And we'll solve them, too.

Our problems will beget solutions which will beget new problems and so on. I'm sure of it.

Thanks. Bob.













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