This is an interesting Bloomberg article published in the Japan Times. It’s well worth a read. Check it out!
Guess what’s weakening the U.S. middle class | The Japan Times.
Personally, I think that the article oversimplifies, just focusing on:
- Increased Robotics
- Reduced power of organized labor (unions)
- Increased competition from China
I suggest that there are other thread to be explored.
Firstly, there’s ‘the increasing share of the national wealth with the top 1%’.
Secondly, the American Dream is struggling to service growing debt levels and the lower payoff from investing in education.
Thirdly, there’s an increasing polarization in US politics, with less power for the middle classes.
As a foreign observer, I have an open question:
What has President Obama really done for the US middle classes?
The answer to Dr Alf’s question is that President Obama has done nothing for the American middle classes other than harm.
They have suffered partially because of the reasons cited in the article and partially because of disintermediation which transfers value traditionally shared with middlemen and middle managers directly to business owners and directors who enrich themselves at the expense of all their employees.
We see the phenomenon with people going into bookshops and scanning product codes and then buying directly from Amazon.
The result of this and the rise of more internet based businesses which pay little or no tax is that shopkeepers and local suppliers are squeezed out.
President Obama in common with many other world leaders has done nothing to educate people in the middle classes to learn languages,become more culturally aware and think more creatively even to the point of leaving the country and setting themselves up in business somewhere else.
The American concept of a “chicken in every pot” and a God given right to wealth and opportunity is alluring but an economy which favours the “Big Battalions” and high tech start ups does not favour those in the middle unless they get much more with it and much more nimble.
President Obama has brought in Corporation taxes that are higher than those in the UK,Singapore and many other places and has saddled many smaller businesses with red tape in the form of Obamacare which adds to wage costs and renders companies less competitive.