By Henry Srebrnik. [Fredericton, NB] Daily Gleaner
J.D. Vance’s best-selling 2016 memoir, Hillbilly Elegy, now adapted into a Netflix film, is a poignant account of the destructive combination of de-industrialization, joblessness, addiction and family breakdown among America’s white working class. The book in effect foretold the election of Donald Trump that same year.
When the real estate bubble burst late in President George W. Bush’s tenure, America’s financial system nearly collapsed. Individuals and then the institutions that funded them defaulted on their loans and the entire economy went into a deep dive.
Vance’s book was published eight years after the 2008 crash. But people had already realized that the Great Recession, as it came to be called, had left a lasting imprint.
Already in 2012, opinion columnist Harold Meyerson, in an April commentary in the Washington Post, “A Very Exclusive Recovery,” was aware that the so-called recovery was “different from all other recoveries.”
Almost three years after economic growth had resumed, he wrote, the real value of Americans’ paychecks was “stubbornly still shrinking” and “real average hourly earnings continue to decline.”
Why? Because most of the jobs being created were in low-wage sectors. Even manufacturing job wages were falling. At a new high-tech locomotive plant in Muncie, Indiana, workers were being paid $24,000 a year to assemble some of the most sophisticated machinery being built.
“That’s not the kind of money you can send your kid to college on, or use to shop for much more than your daily bread,” he observed.
Where was the money going? To profits and dividends, so that income growth went to the wealthiest 10 per cent of households. How had this come about?
Between the end of the Second World War and the mid-1970s, workers expected to have their jobs for as long as they chose. But in the late 1970s, plants began to shut down and jobs were gone forever.
American multinational corporations now locate much of their production abroad. And with the rate of private-sector unionization down to 6.9 per cent, workers have no power to bargain for higher pay.
Even before the 2020 pandemic had hit and destroyed tens of thousands more jobs and small businesses, urban demographer Joel Kotkin, in the winter 2019 issue of the journal American Affairs, called this “America’s Drift toward Feudalism.” Income growth has skewed dramatically towards the ultrarich, he asserts, “creating a ruling financial and now tech oligarchy.”
The richest four hundred Americans now have more wealth than the bottom 185 million of their fellow citizens combined. While the top one per cent in America captured just 4.9 per cent of total U.S. income growth from 1945 to 1973, in the following two decades the country’s richest classes “gobbled up the majority of U.S. income growth.”
The income gap between the top one per cent of the population and the remaining 99 per cent is now at an all-time high.
Where is much of this wealth concentrated? In a few mega-technology firms -- Amazon, Apple, Facebook, Google, Microsoft, and Netflix – which have achieved a combined net worth equal to more than the next 282 firms combined.
Silicon Valley is increasingly divided between an entrenched ultra-wealthy class and its dependent poor, working largely in the service industries the moguls require. Many rely on public or private assistance.
This new feudal order’s ideologues – academics, teachers, public intellectuals, consultants, lawyers, and government workers – have mostly attended elite universities, and their shared belief in meritocratic superiority binds them to the political order dominated by the oligarchy and helps legitimate its rule.
On the other hand, contends Kotkin, the fading prospects for the new generation outside this sector are all too obvious. “Once upon a time, when the boomers entered adulthood, they entered an ascendant middle class.”
But today’s millennials are becoming a “lost generation” in terms of wealth accumulation. Three-quarters of American adults today will not grow up to be better off than their parents.
They will face a future without home ownership or secure employment. A recent Pew Research Centre analysis found that 52 per cent of young adults today resided with one or both of their parents.
This is not a recipe for a healthy democratic republic. There may be more Trumps in America’s future.
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