I laid out most of my theory in the last few posts. I'm curious to see yours because I know you come at this from a very different political perspective.
Don't want you to think that I'm evading this--just have been really busy at work.
So I'll take a quick shot at it:
1) The post-WWII U.S. industrial advantage was beginning to end as of the mid-1960s. Not only were other industrialized nations catching up, but because of their economic situations, they were selling goods at lower costs than the U.S. manufacturers did.
2) The U.S. economy began to shift to take advantage of the available lower cost goods (which, given the stability of the world order, could be reliably shipped), which lead to the development of the knowledge economy, referred to earlier.
3) Union labor, which emerged from the Great Depression and WWII as a very strong force for protecting middle class jobs, was largely tied--because of the way the National Labor Relations Act (circa 1934?) was written--to "shops," i.e. manufacturing jobs. As other countries began to put pressure on the U.S. through cheaper manufacturing, labor lost bargaining power against the "owner class." That meant a deterioration of middle class wages for traditional blue collar jobs. We saw this very explicitly through the 1970s and 1980s as private union labor lost a huge amount of economic and political power.
4) At the same time (the mid-60s), the traditional political power behind union labor, the Democratic Party, became the party of civil rights. There was a massive conflict between the union system (which protects jobs above all else) and civil rights activism, which sought to end barriers for minorities (at the time, primarily black people) in the work stream. That involved a direct assault on the union labor system, which relies a great deal on seniority, further weakening labor's political power. While this was morally the right thing to do, it was also disruptive to the economic order, with a big impact on the middle class.
5) At the same time, the "knowledge economy" was expanding, which allowed many in the middle class to shift to other work, so the middle class didn't go away, it just changed. While the middle class has shrunk, only part of that was going to the poor; much of it (more of it) was people moving up in economic status, with a larger portion of the population in the "wealthy" class.
6) The global order that the U.S. basically created and maintained, also provided for the expansion of industrial economies all over the world. So cheaper goods were available, and as long as goods were cheap, things remained "affordable" even if the job market was changing a great deal.
7) The expansion of the "knowledge economy," including the loss of pensions, and the growth of investment among the (primarily upper) middle class, meant a larger set of people with a direct interest in corporate profits, further eroding organized labor's bargaining power.
This sounds like the recitation of a person who is opposed to global trade--I am not. Global stability has been very good for the U.S. financially--allowing us to remain the wealthiest country in the world, including a generally healthy
enough middle class.
Responding to a few other things I've seen here: I would be curious to see studies that estimate the impact of changing legal immigration trends on the U.S. economy. I suspect that downward wage pressure on the middle class hasn't been especially strong as a result of legal immigration--even if that immigration changed in character in the mid-60s.
I agree that stable homes, with two parents, generally make for better training grounds for productive economic participation. And I think that certain federal policies have negatively impacted that.
I also agree that we seem to be further insulating ourselves from each other. It's what I've heard referred to as the frequent flyer, or airline pricing effect. In a simpler economy, and in a less connected world, in the Depression years, and in the immediately post-WWII years (including as long as we had a big external threat in the Soviet Union), we were more connected than I think we are now. We divide ourselves, in schools, in subdivisions, in parks, in clubs (actually, we largely don't participate in clubs anymore), in churches, even in which seats we sit in on airplanes, and now--especially now--through algorithms that identify our interests and target us with information (largely driven by advertising dollars), largely along socio-economic lines. The more we insulate ourselves, the harder it is to feel empathy for each other, the harder it is for us to even understand where the others are coming from. There was a lot of this that was very overt in reaction to changes that came as the result of the civil rights movement, and there is a lot of it that has absolutely nothing to do with that.
That erosion is a massive problem because empathy is such a strong human emotion. When we sit across the dinner table from each other, most of us immediately connect with each others' humanity, and we start to wonder why there is so much fighting in the world. But when we retreat from there, and see each other across a tribal line, it is very easy for us to accuse each other of all manner of terrible things.
But how to deal with defacto insulation is a very, very big question. At the micro level, I'm not about to move my family into a different city just so they are exposed to different viewpoints and life experiences. I value that my city has a fair amount of diversity, including socio-economic diversity--but I also value that it has strong property values, strong schools, and is safe to live in--all of which are very closely associated with being the home of a high proportion of high wage earners.
Wow--this has turned into quite the rant that I have no interest in editing so... those are my rough thoughts [post]
