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Wednesday, August 1, 2012

"I never cared about being rich, but no one told me the alternative was to be poor."

by John MacBeath Watkins

I previously wrote, in this post, about the stagnation in male incomes and its consequences for the politics of resentment. I must now admit that I was wrong, in that I greatly understated the case.

Part of the problem is that the reduced bargaining power of male workers has resulted not just in lower wage increases, but also in them being less employable. From Wonkblog, we have this chart, based on the research of Michael Greenstone and Adam Looney of the Hamilton Project:


The change in employability is greatest among high school dropouts:



As Wonkblog's Dylan Matthews notes:

High school dropouts’ earnings have fallen 66 percent since 1969, and people with some college – the median level of education in the US – have seen earnings fall by a third.
Part of this is reduced bargaining power, part of it is the redistribution of wealth toward the top. When you see the politics of resentment in the public sphere, keep in mind that the grievances are real. The people suffering this decline in living standards may not find the right targets for their ire, but when I ride in a blue-collar friend's truck and he's got some angry right-wing ranter on the radio, I understand that there's a visceral feeling those ranters exploit.

It's not ignorance or bigotry that sparks their anger, it's a real change in the place most men have in the world. It affects marriage rates, the ability to pay for things like medical care, and a whole host of other things. One friend told me that "I never cared about being rich, but no one told me the alternative was to be poor."

How do we solve the problem? A good start would be to stop giving away the store to life's most fortunate few, the high earners, through the tax code. Germany, for example, has a top individual income tax rate of 45%, and we're constantly being told how fiscally virtuous and productive they are. When a man with Mitt Romney's wealth can pay something like 14% on his income taxes, something is very wrong.

We also need to make our economy more productive, by investing in infrastructure, and we need to find ways to build that stuff more efficiently. The age of our public infrastructure has been increasing, as Republicans insist on lowering taxes and Democrats devote their energy to defending transfer payments.


These are simple, logical steps to deal with the problem. Unfortunately, politics are neither simple nor logical.

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