THE DESTRUCTION OF THE MIDDLE CLASS

We all know these are difficult economic times. We assume an eventual rebound with all the usual features: gains in employment, increased construction and manufacturing, and a rising tide for everyone. This economic downturn has been decades in the making, and it will not be solved overnight or even anytime soon. President Obama has made increased employment claims that are dubious and perhaps completely fraudulent. His administration’s efforts to halt the slide have been at best completely ineffective and at worst have deepened and given the crisis a longer life. We are in a huge abyss, and it’s important to look at the factors that have created it.

Manufacturing in this country has reached an all time low. Sometimes it seems we don’t make anything in the U.S. anymore except for big, fat butts. Our cars, steel, electronics, and increasingly food, are obtained from foreign sources. One would be hard-pressed to find more than a handful of American products at your local retailer. Foreign manufacturers can produce these products cheaply because they do not have to worry about environmental restrictions, quality control, or even paying their workers a decent wage. I am 43 years old, and in my lifetime alone American manufacturing has been devastated, boxed up, and shipped overseas. The paint manufacturing company I left after eleven years now has less than twenty percent of the workers it did when I resigned. Rockwell is gone from the airport, and the GM facility on the west side of town closed years ago. Consumers, eager to get their hands on cheap goods, don’t concern themselves with country of origin or even quality. For them it’s all about price. This attitude, as well as many other misguided government policies, have brought desolation to the American middle class and helped to wreck our economic engine. The days when a young man or woman could graduate from high school, get a job working in a factory, comfortably raise a family, and retire after thirty years are gone. Even if by some miracle one did manage to do that, benefits or pensions would likely be cut or completely taken away after retirement. Our automobile industry would likely collapse without government intervention. There is serious doubt about whether or not the U.S. has the steel manufacturing capacity we would need in a major war of extended length. Those two industries alone were for many years the source of decent wages and other benefits for middle class Americans. Those opportunities are now gone.
The American construction industry is also at an all time low. The recession itself is partly to blame, but there are indeed other factors. Everything involved in it has become an industry itself. Government regulations detail and dominate every aspect no matter how small. Legal and illegal immigrants have largely forced natural born Americans out of the business by under bidding labor. This industry was also the source of good income and benefits for the middle class, and it too is nearly gone as an opportunity.

Trades have come under the control of either government or private business. Don’t think so? A list of occupations regulated by the Ohio Revised Code is demonstrative:

TITLE [47] XLVII OCCUPATIONS -- PROFESSIONS
CHAPTER 4701: ACCOUNTANCY BOARD LAW
CHAPTER 4703: ARCHITECTS
CHAPTER 4705: ATTORNEYS
CHAPTER 4707: AUCTIONEERS
CHAPTER 4709: BARBERS
CHAPTER 4710: DEBT POOLING COMPANIES
CHAPTER 4711: COMMISSION MERCHANTS
CHAPTER 4712: OHIO CREDIT SERVICES ORGANIZATION ACT
CHAPTER 4713: COSMETOLOGISTS
CHAPTER 4715: DENTISTS; DENTAL HYGIENISTS
CHAPTER 4717: EMBALMERS, FUNERAL DIRECTORS, CREMATORIES
CHAPTER 4719: TELEPHONE SOLICITORS
CHAPTER 4721: INNKEEPERS
CHAPTER 4723: NURSES
CHAPTER 4725: OPTOMETRISTS; DISPENSING OPTICIANS
CHAPTER 4727: PAWNBROKERS
CHAPTER 4728: PRECIOUS METALS DEALERS
CHAPTER 4729: PHARMACISTS; DANGEROUS DRUGS
CHAPTER 4730: PHYSICIAN ASSISTANTS
CHAPTER 4731: PHYSICIANS; LIMITED PRACTITIONERS
CHAPTER 4732: PSYCHOLOGISTS
CHAPTER 4733: PROFESSIONAL ENGINEERS AND PROFESSIONAL SURVEYORS
CHAPTER 4734: CHIROPRACTORS
CHAPTER 4735: REAL ESTATE BROKERS
CHAPTER 4736: SANITARIANS
CHAPTER 4737: SECONDHAND DEALERS; JUNK YARDS
CHAPTER 4738: MOTOR VEHICLE SALVAGE
CHAPTER 4740: CONSTRUCTION INDUSTRY LICENSING BOARD
CHAPTER 4741: VETERINARIANS
CHAPTER 4742: EMERGENCY SERVICE TELECOMMUNICATORS
CHAPTER 4747: HEARING AID DEALERS
CHAPTER 4749: PRIVATE INVESTIGATORS; SECURITY SERVICES
CHAPTER 4751: NURSING HOME ADMINISTRATORS
CHAPTER 4752: HOME MEDICAL SERVICES
CHAPTER 4753: SPEECH-LANGUAGE PATHOLOGISTS AND AUDIOLOGISTS
CHAPTER 4755: OCCUPATIONAL THERAPISTS; PHYSICAL THERAPISTS; ATHLETIC TRAINERS
CHAPTER 4757: COUNSELORS, SOCIAL WORKERS, MARRIAGE AND FAMILY THERAPISTS
CHAPTER 4758: CHEMICAL DEPENDENCY PROFESSIONALS
CHAPTER 4759: DIETETICS
CHAPTER 4760: ANESTHESIOLOGIST ASSISTANTS
CHAPTER 4761: RESPIRATORY CARE
CHAPTER 4762: ACUPUNCTURISTS
CHAPTER 4763: REAL ESTATE APPRAISERS
CHAPTER 4771: ATHLETE AGENTS
CHAPTER 4773: RADIATION TECHNICIANS
CHAPTER 4774: RADIOLOGIST ASSISTANTS
CHAPTER 4775: MOTOR VEHICLE COLLISION REPAIR OPERATORS
CHAPTER 4779: ORTHOTISTS, PROSTHETISTS, PEDORTHISTS

Some of these are understandable, but most are not. The bulk require licensing one cannot obtain without experience, but experience cannot be obtained without the license or some sort of apprenticeship. The most outrageous example is the field of private investigation, and it demonstrates my point exactly (complete text here). The state first broadly defines the occupation to cover as many as possible, then sets restrictions that cannot be met by the average person. The next step is to configure the composition of the licensing board completely from industry insiders. Some of the requirements are understandable (no felonies, pass an exam, have insurance), but one in particular closes off the industry to almost everyone: two years experience in either investigation work, practicing law, or law enforcement or work for a public investigative agency are required. That makes the industry a clique run by a select few. Licensing and other requirements for some other occupations are similarly designed. It is the result of a government out of control to the point where it damages the people it serves. The Ohio Revised Code and the draconian restrictions contained therein effectively make the state anti-business. The intent may have been to regulate certain fields for safety or for the protection of consumers, but like every other good idea, it goes too far in the hands of the government. If only the ORC were used as a guide, it would seem clear that the state is trying to discourage business formation and the employment it could bring. Until and unless a sweeping reform of the code takes place, there is little hope for economic gains in Ohio. The state government simply will not allow individual citizens to conduct business without hampering the effort.

Wages for working people have fallen through the floor as a result of immigrant labor. Why pay an American twenty dollars an hour when you can pay an immigrant eight or ten? Given the price of housing, food, and other essentials, it is basically impossible for non-professional folks to survive in the current climate. The price tag on a new car is roughly equivalent to what our parents paid for a house. That sort of inflation over the last several decades has forced many to work more than one job, and many others into poverty. I see ads online everyday seeking someone to do a job that is physically demanding while offering paltry wages. Those ads are clearly directed at immigrants and the businesses or individuals placing them know it. Pay for CEOs is always on the rise, and it comes directly out of the wallets of those who serve the company in the most difficult and labor intensive positions. It is not the federal government but the business owners and shareholders that should demand limits on executive compensation. Exorbitant sums being paid to one individual at the top is both a bad business model and demoralizing to the rest of the workforce. Meanwhile, the working individual is having their wages reduced and benefits eliminated. It’s a recipe for disaster, and what we see now is only the beginning.

As if that all weren’t a bad enough scenario, add the high and fluctuating cost of energy, particularly gasoline. Those who work in the transportation field feel it, but so does the small business person. Here in Columbus we are now paying around $2.75 a gallon for regular gas. Just a few short months ago it averaged $1.50 a gallon. The price jump has nearly doubled the costs of transport for everything. It’s a factor in virtually every quarter of the economy, and the effects of an upward price change ripple throughout and hit everyone. The highly speculative oil market makes billionaires of a few and paupers of the rest.

All of these factors and many others combine to reduce the number of people in the middle class. Eventually we’ll all be either poor, rich, or work for the government. There isn’t going to be room for anything else. President Obama’s economic recovery measures will result only in higher deficits and increased inflation and will leave the next generation of Americans an even greater burden. Politicians and the media are oblivious to what is happening. If they don’t notice and take significant action soon, it may be too late.