Talking about Social Class: Are the Economic Interests of the Majority of Americans with the Democratic Party?
By Steve Rose
Most of the post-mortems discussing the meaning of Bush’s electoral victory and the alternatives facing the Democratic Party have an implicit definition of social class based on economic interests embedded in their analyses. Since the Republican policies over the last 25 years have favored the rich and appealed to cultural conservatives, then ‘how do they keep winning?’ is a conundrum for progressives. Some commentators resolve this problem by arguing that many people do not vote their interests but respond to cultural/social concerns instead (e.g., Thomas Frank’s book What’s the Matter with Kansas: How Conservatives Won the Heart of America[1]). Garance Franke-Ruta cites a wealth of social science research showing that economic self-interest is a poor predictor of voting behavior (implicitly agreeing with the premise that that most people’s economic self-interest is to vote Democratic).[2] Harold Meyerson plaintively asks: “How do the Democrats win back the allegiance of the white working class?” (Washington Post, March 23, 2005).
In this picture, Republicans are savvy and effectively obfuscate their positions while the Democrats are relatively inept with poor candidates unable to build on their strengths. Or, Judas and Teixeira redefine success and say that the Democrats did relatively well in 2004, given the facts of incumbency and high concern for national security.[3] Sticking to their prediction of an emerging Democratic majority, they show Democratic electoral strength among minorities, those with college degrees, and the young.
In all this discussion, it is tacitly assumed that the majority of people have a natural home in the non-Republican party.[4] The failure of the Democrats to capitalize on this advantage is explained in several ways. First, they are accused of having sold their souls in order to attract campaign contributions. Second, the press is biased and does not report the true effect of Republican policies. Third, the inside-the-Beltway mentality of Democratic campaign consultants has blinded them to obvious appeal of a populist approach.[5]
Perhaps, we need to consider the alternative that the majority of people do not have basic economic interests to vote Democratic. While there have been many presentations on how people vote by education, income, and occupation, few have made careful arguments about what each division means in terms of tying interests to politics. For example, some have defined those without a four-year college degree as being working class and presumably with interests to support Democrats. To date, the discussion about defining economic interests is similar to the one defining pornography—hard to put into words but you know it when you see it. With respect to pornography, the courts have turned to community standards in deciding specific cases. We need to do at least as much in defining interests in order to make good strategic decisions.
It is an occupational hazard of those with big hearts to overestimate the share of the population that is economically distressed. In their desire to generate public attention and support to expand public policies, they argue that the system is “broken” and needs repair (e.g., candidate Edwards’ speeches about the two Americas). But, it makes a big difference whether the share of the population in need is 15, 35, or 50 percent. If it is at the high end of the range, then one would expect lots of pressure from below to meet their needs. But if it is at the low end of the range, then poor people will need allies among those who think it is morally right to take care of others in need.
Thus, it is an empirical question to determine the exact contours of America’s current social class structure. Because the data can be organized in so many different ways, it is quite easy to selectively use different series and approaches to argue for a number of different points of view. Another difficulty is that most information is based on a single year snapshot, and it is possible that those who are poor today will be well-off in the future. While conservative researchers tend to overestimate the amount of mobility, it is true that long-run analyses present a different picture than the ones based on a single year.[6]
Defining Progressive Economic Interests
The syllogism--the Republicans are the party of business, the Democrats are the party of workers, and, since most people are workers, therefore the majority of people should be Democrats—is what many activists feel in their gut. From Roosevelt’s initial victory in 1932 to Johnson’s victory in 1964, it seemed true. Since then, the Republicans have won seven out of ten of the presidential elections and broke the long reign of Democratic control over the House of Representatives. Despite a hyper-energized Democratic base, Bush’s won a higher share of the votes in 2004 than he won in 2000. For those who did not believe in the far-fetched theories that the election was rigged, this was a bitter pill to swallow and has led to another round of intra-party squabbles.
There are lots of reasons to support public policies that help those at bottom. But, if we are trying to specify interests rather than broad concerns for social solidarity, we need to more selective in determining which policies directly and materially assist different sectors of the population. In particular, we must evaluate the Democratic Party’s claim to speak for the middle as well as the lower classes.
In America today, the vast majority of people consider themselves as part of the middle class, sometimes adding the adjective “upper” or “lower.” This group contains a huge swatch of the population from just above the poverty line to those making over $150,000. While people in households who consistently make over $100,000 might define themselves as solidly middle class and worried about their future, it would not be appropriate to include all of these people as having a clear interest to be in the Democratic camp. On the other hand, we would not want to limit any interest-based definition to those earning the minimum wage or living in a family with an income below the poverty.[7] Many commentators think that this is a ridiculously low number ($16,000 for a family of three), and many polls show that a majority of people would choose a figure of at least $25,-35,000 as the amount needed to minimally get by.
In general, progressive social policies have limited the unfettered competition between social groups and can be grouped in two categories. In the first group, there are government safety net programs that provide shelter, food, money, and services (especially medical) for the needy. The second set of policies involve public limits to private business power that change the terms of the interaction of workers and bosses and constrain activities that may be harmful to society (e.g., environmental regulation).
So which groups have strong interests in these two types of policies? To do this, we need to address five questions:
One caveat--in none of the cases are the definitions absolutely clear. The purpose here is to start an open discussion on these issues and to present estimates of the share of the population affected.
1. Safety Net Programs
Except for retirement programs, safety net programs are used when a bad event happens—e.g., lack of employment, illness, death in the family, etc. Most government programs have means tests with eligibility standards set to include all of those with family incomes up to 185 percent of the poverty line.[8] For a family of three, this would be slightly below $30,000. Assuming that prime earner brought in $25,000 of this income, that would put his hourly wage at $12, which is two and half times the minimum wage.
It is important to note that people’s circumstances change from year to year. In quantitative analysis reported below, 15-year average incomes will be reported. Over this period, most people will have several years with incomes 25 percent below and 25 percent above their average. In other words, those with long-term average incomes of $40,000 will have several years in which they would be eligible for safety net programs and several years in which they are making considerably above $40,000. Even though some people with incomes above this level will have an odd year every now and then in which they utilize a safety net program, the vast majority of usage is concentrated in those with long-run average incomes below $40,000 a year.[9]
2. People in families above $40,000 cut-off
It is reasonable to argue that a person does not need to utilize a program to benefit from it. This factor is based on the same one behind all insurance policies in which people regularly pay relatively small sums to offset the risk of a potentially large loss in some point in the future. This issue may be particularly important in the modern era where corporate outsourcing, downsizing and restructuring are more prevalent, leading some to talk about the problems facing an “anxious class.” [10]
Even among those affected by adverse economic events, it is necessary to know by how much are they affected. For example, if family’s income declines from $70,000 a year to $50,000 a year, this has a significant effect on their living standards.[11] But does this negative experience change these people’s views towards safety net programs? Without data to answer this question, one can not definitely answer this question. At $50,000 a year, they are still above qualifying for most safety net programs, and it is certainly not clear that this experience would automatically change political views.
I am unconvinced that the insurance aspect of safety net programs animates these people. Even though people in families earning $40,000 to $70,000 are more likely than their higher income counterparts to empathize with those earning less, they do not easily fall into any group and should not considered as having strong economic interests with the Democrats. In a society that glorifies consumption, they are aware that others have more. Households in this income range often are home owners but don’t live in the best areas. Without much savings, they worry about job losses and unexpected medical expenses. Yet, they can have dense social networks and feel that they are solidly middle class. These “Reagan Democrats” may resent the advantages accorded the elite but also worry that government has coddled too many poor people and is inefficient with their spending.
3. Estimating the number of people in each group
Determining how many people fall into various income groups is actually quite difficult and requires many methodological choices. First, there are life cycle effects. For example, when graduate students (or other young workers) have low incomes, this condition is temporary and their perceived interests are rooted more in the expectations of where they will be rather than where they are at the moment. Second, there is a lot of yearly fluctuation. Every researcher who has used data that follow the same people over a span of many years (called longitudinal panels) reports their surprise at the size of these fluctuations. These yearly movements increase the number of observations at high and low incomes in a single year relative to long-term averages. The third issue has to do with measuring change over time, which can only be done properly by following the same people over time.[12]
The approach used here tracks family incomes over 15 years for people in their prime-earning years. These numbers should not be considered precise but taken as order of magnitude figures. This is especially true because the best data source for this approach only has usable data through 1998.[13] Over the 15-year study period, the average annual family income for prime-age adults was $66,000 for males and $61,000 (1999 dollars) for females.[14]
As Table 1 shows, 8 percent of males and 14 percent of females were at or below the long-term “minimum-income” cutoff of $25,000. The next income category, some might use the term “working poor,” goes through $37,500 (not far from $40,000 in inflation adjusted dollars) and contained another 12 percent of prime-age adults. Thus, the combined total of the poor and working poor was 19 percent of males and 27 percent of females.[15] The next group runs through $50,000 in 1999 dollars and included another 16 percent of prime-age adults.
These numbers provide a basis for estimating the size of the group with economic interests aligned with Democratic Party based on living standards. If the narrow definition of including only the first two groups is used, then the numbers of 19 percent of males and 27 percent of females are probably much smaller than most progressive commentators would estimate. It is also a number that you would not see commonly cited because most researchers and commentators use data from a single year surveys in their analyses and include the entire population rather than just prime-age people. While this choice is appropriate for many analyses, using it in this context overstates the share of the population with lower incomes, such that a one-year estimate of the share of households with incomes under $40,000 would be over 40 percent.
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Table 1:
Average Family Incomes, 1983-1998 |
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Adults 26-59 Years Old |
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Incomes
in 1999 dollars |
Total |
Men |
Women |
|
$25,000
or less |
11 |
8 |
14 |
|
$25,-37,500 |
12 |
11 |
13 |
|
$37,500-$50,000 |
16 |
15 |
17 |
|
$50,-75,000 |
30 |
33 |
28 |
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$75,000
and higher |
30 |
33 |
28 |
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|
|
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Source:
Author’s calculations from the PSID. Numbers
don’t add to 100 because of rounding |
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4. Jobs in the New Economy and Who benefits from curbing corporate power
There have been many claims about the declining number of good jobs: As the share of manufacturing jobs has continuously declined over the last 40 years, many people have the perception that the new service economy is composed primarily of low-paying jobs in retailing and low-skilled services. Yet, this shrinkage in the number of good jobs occurred during a period when there has been a massive upgrading in the education credentials of the work force. In 1960, fully one-half of the labor force did not possess a high school diploma; only twenty percent had some postsecondary schooling. Today, just over 10 percent of workers do not have a HS diploma or GED certificate, while the share with at least some college is just below 60 percent. In addition, since 1979, the relative earnings of college graduates to high school graduates have increased greatly.
Things don’t seem to add up—more educated workers yet fewer good jobs. Either low-skill jobs are being filled with overqualified workers (which is inconsistent with the change in relative earnings), or there is a misconception about the nature of employment in the non-manufacturing sector.[16] In order to understand the nature of the new services, I developed an approach based on five functional activities that are defined by the nature of the work that people do.[17] The “Office sector” is the largest group and is composed of private and public administrative workers, sales representatives (not sales clerks), and employees in finance, insurance and related business services. In addition to the office sector, the other divisions of the economy are: direct producers in primary production (agriculture, mining, and wood products), manual workers in factories, construction, utilities, transportation, and wholesale trade (not including the front office workers), non-administrative workers in health and education, and low skilled personal services and retail workers.
By tracking these changes in economy from 1959 to 2003, the following trends were found (see Table 2):
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Table 2:
Employment Shares, 1959 and 2003, Five Functional Areas |
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1959 |
2003 |
Change |
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|
|
|
Farm/Extractive
Production |
4.7 |
1.5 |
-3.2 |
|
Factory
and Related Production |
33.5 |
15.8 |
-17.7 |
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Low-skill
Sales and Service |
20.5 |
20.2 |
-0.3 |
|
Health
Care and Education |
10.9 |
19.0 |
8.1 |
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Office
Administration and Business Services |
30.4 |
43.5 |
13.1 |
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Source:
Author's Calculations from CPS and 1960 Census |
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Accompanying these changes has been a massive increase in the credentials needed for all jobs. Formerly, factory, craft, police, and related jobs did not even require a high school diploma; now workers are expected to have at least finished HS and preferably a couple of years of college. Insurance agents and low- to mid-level management often had not received a bachelor’s degree; today, this is rare and many of these workers have some post-graduate education. Within each of these jobs, those with higher education credentials earn considerably more than those without these accomplishments.
In a parallel analysis to this functional division of the economy, I divided occupations into three broad groupings[18]:
In each of these three tiers, there is a gender segregation of men’s and women’s jobs; therefore all of the analysis followed male and female workers separately. In 1959, for example, among prime-age (30 to 59 years old) male workers, the division among elite, good, and less-skilled jobs was 20 percent, 39 percent, and 41 percent. In 2000, this had shifted to 34 percent, 38 percent, and 29 percent.[19]
In other words, there has been a large increase in the number of the best-paying jobs with the share of the upper tier growing by 14 percentage points, the share of middle tier remaining almost constant, and the share in the lower tier declining by 12 percentage points. Contrary to what some on the left might think, the share of bad jobs fell significantly as more workers with postsecondary education moved into an expanding set of managerial and professional jobs.
This discussion about the shift in functions to office activities and in occupations to more managerial and professional jobs is a quick overview of many complicated issues. Despite stories about downsizing, most college graduates become part of the middle layers of the corporate hierarchy (or work for business service companies that have corporations as their clients). These workers fill the downtown and suburban offices during the day and return to their suburban homes at night. It may seem counterintuitive that we can function with so much “overhead” activities. But this is the consequence of increasing productivity that has required meant fewer workers to produce our food and other consumer goods.
In this approach, just 18 percent of male workers and 7 percent of female workers are part of the “industrial proletariat.” Using a broader measure which includes blue collar workers in transportation, utilities and wholesale as well as manufacturing, brings the share up to 34 percent of male workers and 10 percent of female workers. In comparison, about 35 percent of male and female workers have high-end managerial and professional jobs.
So, who has “objective interests” in curbing corporate power? On some levels, the 80 percent of workers that are not self-employed or in management don’t control their working conditions and want protections. On other levels, workers have interests in common with their employers because the success of their company is necessary for them to keep their jobs. Finally, in today’s world, there is a body of laws already in place, and the key issues revolve around enforcement and either expanding or contracting various regulations.
Key work place issues include minimal wage legislation, forced overwork, occupational health and safety, right to unionize, unemployment benefits, and retraining services. For most of these issues, there is soft public support. Despite the best efforts of many, these issues have not resonated widely nor rallied strong enough support to win. Each campaign could be carefully assessed and evaluated in terms of mistakes made. Or, we could look at the structural changes described here and our level of development as not providing the fertile conditions of common solidarity for these movements to win.[20]
5. The impact of other public sector activities
As the government has grown in size and importance, its direct and indirect impacts are enormous—over 30 percent of GDP is spent by the combined public sector and more than one in six workers are public employees. All of this effort clearly produces a lot of services—e.g., education, transportation, sanitation, defense, etc.—that are benefit the whole population. In order to support this system, a variety of taxes (with an array of different rate structures) are collected. In many cases, legislators have used the tax code to encourage various activities through special rates and exemptions—for example, the write-offs for home ownership are much larger in terms of lost federal taxes than the direct public expenditures for providing assistance for low-income families.
Therefore, it is important to realize that fights over public actions encompass considerably more than disagreements over the size of the transfer and regulatory functions. This leads to all kinds of contradictory feelings to collective activities. First, there are the benefits that one derives from all of these services. Second, there are a lot of public expenditures and activities that one does not support. Third, periodic dissatisfaction with a government bureaucracy or stories about public waste leads to frustrations and dissatisfaction. Fourth, there is the sense that someone else is not paying their fair share and that you are being overtaxed.
Many people believe that those who benefit from one type of government protection will support others seeking assistance. Yet forming coalitions on the basis of trading support has not always been successful. As many have noted, the blue states pay more into the federal government than they get in return as federal expenditures, while the opposite is the case in the red states. The agricultural sector, in particular, has been highly subsidized and protected, while people in rural areas have been one of the most consistent supporters of Republican candidates.
The density and complexity of people’s interactions with public programs can lead to different levels of public support. In many European countries, social democratic policies have a long history and enjoy widespread public support. Even when conservative governments are elected, the policies are maintained and only changed at the margins. In the US, government support was highest in the Roosevelt years and the year that followed. However, over the last 40 years, there has been a sustained attack (with little defense from the Democrats) on public programs. These attacks have undermined respect for all major institutions and created a poor environment for progressive ideas to flourish.
The most successful progressive policies have been Social security and Medicare, which represent a large transfer to non-working retirees. However, these programs have certain unique features. First, they have been presented as being more like a pension that was “earned.” Second, the elderly are particularly “deserving” beneficiaries. They are hardly shirkers and have limited options to support themselves. And, in all societies, respecting the elderly is an important value. Third, social security recipients over the previous 30 years received benefits far in excess to what any pension would have paid. This generosity was based on the strong economic growth from 1945 through 1973 and a relatively small elderly cohort. Consequently, the combination of experiencing depression and war and then prosperity and expanding benefits created very positive feelings to these programs.
The experiences of the current and soon-to-be retirees are not the same. Their connection to the Democratic golden years from FDR to LBJ is much more tenuous; the demographics are not as favorable; and benefits cannot grow at the same rate. Further, the attacks on public spending in general and on the viability of the retirement program in particular have raised some doubts about the future of these programs. Nonetheless, these programs remain popular as one of the signature public sector achievements.
The bottom line is that coalitions to support progressive public policies need to be built and do not coalesce automatically. During times of steep economic slumps, it is easier for many to see the need for a broad public safety net. In countries with a long history of solidarity between social groups, left wing parties have a broad base and had long periods as the ruling party. Even when these parties are not in power, conservatives do not cut back safety net programs because of their popular support.
However, the American experience shows that it is also possible for parochial interests to rule. In these circumstances, those who have been most supportive of progressive initiatives have been lower income people and the labor movement. The former group utilizes safety net programs regularly and the latter group relies on the curbing-of-corporate-power roles of government. By and large, labor leaders, especially of industrial unions, have also understood for the need to build broad support for activist public policies and have been some of the most consistent supporters of safety-net programs.
Issue Framing in the
last election
Left critics of Kerry argue that he did not run enough as a populist to delineate clearly his differences from Bush. In terms of economic policy, the critique is that he did not emphasize things like tax cuts tilted heavily to the rich, health care, the ruinous consequence of unbridled globalization, increasing the minimal wage, and workers rights issues (e.g., to unionize, protections against capricious firings, and setting minimum health, safety, and pension standards). Finally, not tying Bush to the corporate scandals and obscene CEO salaries is viewed as a crucial missed opportunity.
Looking quickly at each of these issues separately reveals some of the reasons why Kerry did not (or could not) make these issues more salient. It certainly clear that the Bush team was ready for this assault and would have responded with claims that Kerry was making tired appeals to “class warfare”, reflecting a backward way of responding to modern problems that appealed only to “special interests.”
1. Tax Cuts
Progressives have cited many statistics showing that the Republican tax cuts over Bush’s first four years were skewed to the upper income tax payers. Each of these claims is made with a tone of righteous indignation, waiting for the people to punish those who passed these laws. Alas, the response has been tepid and does not particularly expand the base. Differential tax cuts did not have that strong an effect because low- and middle-income people don’t see the huge tax refunds for the rich as money coming out of their pocket. Kerry tried in vain to make an issue of what the programs could be funded if the tax cut for families over $200,000 was rescinded. Bush disingenuously said these tax cuts created jobs by helping small business owners. A rising deficit is too abstract to have much immediate political effect because the federal government has run deficits for virtually all of the last 40 years without having a consistent effect on jobs and the economy. And as polls on estate taxes show, citizens feel that taxes are too high across the board and seem willing to apply a principle of fairness when evaluating taxes that don’t even apply to them.
2. Health Care
The politics of health care is another issue that progressives seem to have public support for change. While liberals think that having more than 45 million people being uninsured is a travesty, it still means that over 80 percent of the population does have coverage. A lot of people rotate in and out of jobs with coverage, and a number of people choose not to enroll in plans that require significant personal contributions. They do this thinking that they are healthy and might not get sick and knowing that, as a last resort, they can show up at hospital emergency rooms and get treated.[21]
As the Clintons found out, this is a mine field with few easy solutions. Basically, polls show that the public wants more care, faster access, better care, and lower prices. Any reference to the success of universal plans in other countries is usually discounted. Politicians that have tried to reform the system have usually ended up adding more benefits for patients and controls of reimbursements for providers. Concerns for the uninsured can not lead anywhere without more systematic reforms, and hence this issue continually fails to be resolved. The Democratic edge in public opinion polls on health care is somewhat illusory because each specific policy initiative has much less support.
3. Globalization:
With respect to international trade, office, health care, and educational workers have only been marginally affected. In many ways, they have benefited from lower prices for many standard goods and high quality for some other purchases. The argument that increasing globalization always leads to job losses and earnings declines is not supported by history or economic theory.[22] Because displaced workers are deserving victims (the played by the rules), there is sympathy for their plight, that is tempered by wariness of a heavy public hand.
There is public anger at companies that move facilities overseas, but not much support for any laws that would impede this action. In the same vein, there have been calls to “buy American” that may have had some effect. Fears about a potential backlash caused many foreign auto producers to locate facilities here; in addition, there have been various tariffs and trade limitations imposed on foreign products. These actions, however, have been inconsistent and often driven by very parochial concerns of local interests. Kerry tried to make this an issue, but it had relatively little traction with few people thinking that the Democrats had a good plan to reverse the negative consequences of globalism. Most politicians rhetorically support “fair trade” over “free trade” and end up doing very little.
4. Supporting Worker’s Rights
It should be clear by now, that the data presented earlier show why these appeals have limited direct support. For example, on worker’s safety issues, very few voters are likely to be swayed by the Republican inaction on ergonomic standards. Many people will support worker’s rights policies because they think that other people need these benefits rather than because it would benefit them.
Conclusion
This article has been directed at looking at economic interests, trying to define them and trying to estimate the share of the population with economic interests aligned with the Democrats. If the number is as small as is indicated here, then one can’t argue that the majority have a natural home in the Democrat Party. Once this premise is dropped, another series of propositions lose much of their cogency:
Abandoning these premises would actually be very good for liberals. Many of them are arrogant, off-putting sentiments that have been successfully ridiculed by conservatives for their elitism. In addition, these easy answers inhibit creative analyses and the search for policies that will be support by the majority of the population. Without the crutch that the majority starts out on our side, we will be forced to face hard choices.
The problem for liberals can be summed up in one set of numbers: according to exit polls, the self-proclaimed ideological positions of voters were 34 percent conservative, 21 percent liberal, and 45 percent moderate.[23] Kerry actually won the moderates by over 8 percentage points but lost the election because this victory was not large enough to offset the 13 percent point conservative advantage.
The liberal-conservative division is actually quite muddy because there are so many possible defining issues: economic (taxes, regulation, international trade), social (abortion, gay rights, etc.) and security/international relations. In addition, the women’s rights and environmental movements don’t fit neatly into any of the above three areas. The bottom line is that there are few people who either are liberal or conservative across all of these issues. Most people are hybrids of one type or another, have weak party identification, and often split their ticket by voting for candidates of different parties for different offices.
Liberals have a dilemma that no amount of parsing is going to help them avoid. Rightly, they are associated with public policies that support those that are less well-off, those that have faced discrimination, and those who feel the current system needs to be changed. While this is admirable, it has had the unexpected consequence of making the party seem a group of interest groups.[24]
Liberals have relied on its identification with the “little guy” to be a unifying force based on a common self-interest. The data that are presented in this article would suggest that the number of people that directly benefit from activist state welfare policies is less than one quarter of the population. Other sectors of the population (e.g, college educated and young) have sympathies for redistributive and other progressive policies on the basis of moral values. But the support of many of these people for Democrats is not strong, and they can be swayed by fiscal and security concerns as well as various social issues. This is particularly true in light of the Republican’s four decade ideological assault on big government (‘wastes your money’), individualism (‘keep your money’), and covert racism (‘even if you want to help the poor in general, you don’t want to help welfare cheats of color’).
Clinton, the triangulator, tried to balance these competing interests with a “tough love” approach that included welfare reform. He was fortunate to initially run when the economy was weak and security concerns were low. He was fortunate again when, combined with some good fiscal policies, the economy went through a growth spurt while he was in office. But, even before he squandered his popularity with his personal problems, Clinton was not popular with the left wing of the party and did not prevent Congressional Democrats from losing control of both houses.
Liberals cringe at the thought that Clintonism represents the “left wing of the possible.” Kevin Mattson concludes his article about past and future liberalism talking about “shared national purpose,” “shared obligations”, and “shared sacrifices”.[25] This is a vocabulary of people doing things for others because it is right rather than because it is in their narrow economic self-interest.[26]
In western European countries, social democratic parties are rooted in 100 years of activism and have a reservoir of support. The positive feelings towards the FDR Democratic Party are much weaker, and this is going to have to change if American liberalism is going to gain strength. It will not be an easy road and will need some very talented politicians to articulate a vision that resonates widely. It will also require some painful compromises that will alienate powerful constituencies. But we will not know how to make these arguments and compromises if we begin thinking the majority is already on our side.
[1] New York: Henry Holt and Company, 2004.
[2] The American Prospect
[3] “Movement Interruptus,” The American Prospect, January, 2005, pp 22-27.
[4] While many people criticize the Democrats of become Republican-Lite, Bush’s economic and social policies have moved the Republicans in a more conservative direction. Consequently, even Republican-Lite Democrats are considerably different from most Republicans.
[5] Thomas Frank makes these arguments in “What’s the Matter with Liberals? The Election of 2004,” New York Review of Books, May 12, 2005, pp. 46-51.
[6] See for example Cox and Alm, . The Myths of Rich and Poor,
[7] The share of people below the officially poverty line can be presented in many different ways: in a recent single year, nearly 12 percent of Americans were poor; over the previous ten years, the share of people with average incomes below the poverty line was half of the single year figure; the share of people who were poor in all ten years was below 3 percent; and the share of people who had at least one year below the poverty line was slightly over 25 percent. The first two numbers in this series are based on average incomes in a single versus multiple years. The last two figures deal with “spells of poverty”, either in the form of always being poor or ever experiencing poverty.
[8] Individuals can receive payments from the Earned Income Tax Credit on incomes above this level. But, this applies only to families with children and the payments are quite modest on when incomes are above $30,000.
[9] For data on how people use benefits periodically, see Stephen J. Rose (1995), Long-Term Eligibility for the Earned Income Tax Credit, National Commission for Employment Policy, 1995.
[10] There are many data issues and disagreements among researchers about the decline in workers attachment to their companies. For a collection of studies arguing that things have not changed that much, see David Neumark, Ed., …
[11] For data on how often these types of income declines occur, see two of my papers: "Declining Family Incomes in the 1980s: New Evidence from Longitudinal Data," Challenge Nov-December, 1993, 29-36 and On Shaky Ground: Rising Fears about Incomes and Earnings, National Commission for Employment Policy, 1994.
[12] This confusion of comparing the average of the work force over time rather than looking at the real experiences of individuals as they progressed through their careers has led to many false claims. For example, when Clinton was campaigning, he repeated the assertion that 80 percent of people were worse off compared with ten years earlier. The common sense interpretation of this statement is that 80 percent of people had lower inflation-adjusted incomes in 1990 than they had had in 1980. This data backing this claim compared the 80th percentile of families in 1990 and 1980 even though they were not the same people. Using longitudinal data, I was able to show that 33 percent of families had experienced actual losses over these years. See Rose, Stephen J., 1993. "Declining Family Incomes in the 1980s: New Evidence from Longitudinal Data," Challenge Nov-December, 29-36.
[13] The data source is the Panel Study on Income Dynamics (PSID); the period covered is 1983 through 1998; and prime age is defined as never being younger than 26 years old or older than 59 years at any time during this period. See Rose, Stephen and Hartmann, Heidi, 2004. Still a Man’s Labor Market: The Long-Term Gender Gap (Washington, D.C.: Institute for Women’s Policy Research) for a discussion of the methodology used in constructing these numbers. It should be noted the income figures used are here are not affected by the super-rich because of “top-coding”—the maximum family income in any year is limited to $200,000 in inflation-adjusted dollars.
[14] The difference in average earnings of men and women is much greater: of those who were employed in all 15 of these years, men averaged $52,510 and women $29,507. In Still A Man’s Labor Market: The Long-Term Gender Gap [Washington, D.C.: Institute for Women’s Policy Research, 2004], I and Heidi Hartmann show how individual labor market experiences are related to family incomes.
[15] If this is the estimate that you came up before seeing this number, you are in a minority. Since I first produced the Social Stratification Poster in 1978, I have asked many progressives about median income and the share of the population in different income ranges. Almost universally, there has been an overestimate of the number of people in the lower income ranges.
[16] There are many, many papers about the rise in wage inequity based on education. Starting in about 1980, the earnings of those with a four-year degree relative to those with just a high school diploma grew dramatically.
[17] See Carnevale, Anthony and Rose, Stephen, 1998. Education for What? The New Office Economy, Princeton, N.J.: Eduational Testing Service.
[18] The official government occupational codes seem to be hierarchical, but there are several important anomalies that need to be corrected if we are going to group occupations more consistently. For example, managers in retail outlets (e.g., fast food outlets) were reclassified as supervisors; stock brokers, real estate and insurance agents, and company-to-company sales representatives were separated from sales clerks and put with other professionals; and security guards were separated from police and put with other low-skill service workers.
[19] The shift to high-paying jobs was even larger for female workers.
[20] In Western Europe, the economic structure is not that different, but there is a long history of solidarity with other workers. This demonstrates that advanced capitalism is compatible with widespread support for curbing of business power in the interests of low income people. But American history is different and pro-labor forces have been much weaker; the reasons for this (sometimes referred to as “American exceptionalism”) are beyond the scope of this piece.
[21] As opposed to housing, people have a right to care; and indeed studies show that poor people have almost the same the number of medical visits as those with more income. Recently, I had access to unpublished numbers from a survey conducted by the Annie E. Casey Foundation of selected low-income areas in 14 cities. When respondents were asked to rate their satisfaction with local health care services, over 80 percent said that they were at least somewhat satisfied.
[22] Some might argue that this is true as of today and the recent past. But with the rise of China and India, outsourcing for even white collar work (e.g., office transactions, call centers, and even programming) will displace many workers. The issue of trade and employment is complex and is not really the topic of this piece. But the mercantilist view that our economy will contract because of trade has been many times and not stood the test of time. For example, during the Clinton years, there was a huge increase in the number of jobs at the same time NAFTA and other trade liberalization policies were initiated. Trade imbalances have to be offset by capital flows, such that the jobs that are displaced on one side of the equation lead to other jobs in other sectors. Obviously, it is not always a one-to-one trade-off. Developing countries can go through periods of export-led growth, but in the end, most of the work force will be directed to activities that serve a domestic market.
[23] It should be noted that the party identification question was split with equal numbers of Democrats and Republicans.
[24] This charge has annoyed liberals to no end, and they have quickly responded that these groups represent the majority of the population. Nonetheless, the passion of the adherents of each of these movements is naturally to their own issues. While any system that only has two major parties will result in large coalitions, the fractiousness of the Democrat big tent creates more problems than the comparable balancing act that the Republicans face.
[25] “Goodbye to All That: The first lesson for any opposition movement today is that the ‘60s were actually the decade of the right’s triumph,” American Prospect, April 2005: 32-38.
[26] Some people have tried to posit that helping the poor is “efficient” either because it reduces the negative costs of crime or leads to more productive people who will no longer need assistance. These arguments resonate with the convinced but fail to change many opinions of other people.