Get unlimited digital access to baltimoresun.com. $0.99 for 4 weeks.
News Opinion

The great u-turn [Commentary]

Do you recall a time in America when the income of a single schoolteacher or baker or salesman or mechanic was enough to buy a home, have two cars and raise a family?

I remember. My father (who just celebrated his 100th birthday) earned enough for the rest of us to live comfortably. We weren't rich but never felt poor, and our standard of living rose steadily through the 1950s and 1960s.

That used to be the norm. For three decades after World War II, America created the largest middle class the world had ever seen. During those years the earnings of the typical American worker doubled, just as the size of the American economy doubled. (Over the past 30 years, by contrast, the size of the economy doubled again, but the earnings of the typical American went nowhere.)

In that earlier period, more than a third of all workers belonged to a trade union -- giving average workers the bargaining power necessary to get a large and growing share of the large and growing economic pie. (Now, fewer than 7 percent of private-sector workers are unionized.)

Then, CEO pay averaged about 20 times the pay of their typical worker. (Now it's more than 200 times.)

In those years, the richest 1 percent took home 9 percent to 10 percent of total income. (Today. the top 1 percent gets more than 20 percent.)

Then, the tax rate on highest-income Americans never fell below 70 percent; under Dwight Eisenhower, a Republican, it was 91 percent. (Today, the top tax rate is 39.6 percent.)

In those decades, tax revenues from the wealthy and the growing middle class were used to build the largest infrastructure project in our history, the interstate highway system. And to build the world's largest and best system of free public education, and dramatically expand public higher education. (Since then, our infrastructure has been collapsing from deferred maintenance, our public schools have deteriorated, and higher education has become unaffordable to many.)

We didn't stop there. We enacted the Civil Rights Act and Voting Rights Act to extend prosperity and participation to African-Americans; Medicare and Medicaid to provide health care to the poor and reduce poverty among America's seniors; and the Environmental Protection Act to help save our planet.

And we made sure banking was boring.

It was a virtuous cycle. As the economy grew, we prospered together. And that broad-based prosperity enabled us to invest in our future, creating more and better jobs and a higher standard of living.

Then came the great u-turn, and for the last 30 years we've been heading in the opposite direction.

Why?

Some blame globalization and the loss of America's manufacturing core. Others point to new technologies that replaced routine jobs with automated machinery, software and robotics.

But if these were the culprits, they only raise a deeper question: Why didn't we share the gains from globalization and technological advances more broadly? Why didn't we invest them in superb schools, higher skills, a world-class infrastructure?

Others blame Ronald Reagan's worship of the so-called "free market," supply-side economics and deregulation. But if these were responsible, why did we cling to these ideas for so long? Why are so many people still clinging to them?

Some others believe Americans became greedier and more selfish. But if that's the explanation, why did our national character change so dramatically?

Perhaps the real problem is we forgot what we once achieved together.

The collective erasure of the memory of that prior system of broad-based prosperity is due partly to the failure of my generation to retain and pass on the values on which that system was based.

We must restore our recollection. In seeking to repair what is broken, we don't have to emulate another nation. We have only to emulate what we once had.

That we once achieved broad-based prosperity means we can achieve it again -- not exactly the same way, of course, but in a new way fit for the 21st century and for future generations of Americans.

America's great U-turn can be reversed. It is worth the fight.

Robert Reich, former U.S. Secretary of Labor, is professor of public policy at the University of California at Berkeley and the author of "Beyond Outrage," now available in paperback. His new film, "Inequality for All," was released in September. He blogs at http://www.robertreich.org.

Copyright © 2015, The Baltimore Sun
Related Content
  • Robert B. Reich: The real job killers: lousy jobs, lousy wages [Commentary]
    Robert B. Reich: The real job killers: lousy jobs, lousy wages [Commentary]

    Conservative claims that the minimum wage kills jobs are largely bunk

  • Street policing doesn't belong in school
    Street policing doesn't belong in school

    In recent months, there has been a flood of video evidence of police violence in our communities. Earlier this week, a gut-wrenching video surfaced that shows a school police officer violently attacking three young girls inside one of our middle schools. The incident starts when one of the...

  • Look to animals to cure Ebola
    Look to animals to cure Ebola

    GlaxoSmithKline and Merck will test new Ebola vaccines in West Africa this month. They're racing to cure this disease that causes severe hemorrhagic fever in humans and other mammals. To date, Ebola has claimed more than 8,600 lives and infected more than 20,000 people in Sierra Leone,...

  • Why Black History Month?
    Why Black History Month?

    Every February, college professors like myself are tasked with reminding students and the general public of the significance of Black History Month. Undoubtedly, many people understand the potential value behind a designated month dedicated to this part of American history. Our country is...

  • Lexington Market overhaul [Poll]
    Lexington Market overhaul [Poll]
  • Mr. Obama's 529 brouhaha
    Mr. Obama's 529 brouhaha

    Rarely does a president flip-flop on an initiative presented in the State of the Union address as quickly as Barack Obama did this week. He reversed himself on 529 college savings plans on Tuesday, which was just seven days after his speech to the nation. Such a political miscalculation is...

Comments
Loading