The So-So Society: Democrats Have Forgotten What Made Them Great

The So-So Society: Democrats Have Forgotten What Made Them Great

  • Democrats have given sway to more business-friendly interests
  • Meanwhile, wages have lagged behind productivity gains since 1973
  • It’s time for new thinking on economic security and prosperity

In the aftermath of the midterms, where voters displayed unusual anxiety over their economic plight — exit polls found that 70 percent believe the nation was on the wrong track economically, and that two-thirds think the economy is rigged in favor of the wealthy — our nation’s pundits made the bold decision to actually find out what’s irking everyone so much. In doing so, they hit on a fact of life that’s been staring us in the face for over four decades: Americans aren’t getting adequate pay for what they produce. 

David Leonhardt of The New York Times calls it “The Great Wage Slowdown,” and has the numbers to prove it. Median inflation-adjusted income, Leonhardt says, is $2,100 lower than when President Obama took office, and $3,600 lower than it was on President George W. Bush’s inauguration in 2001. 

Related: How the Media Helped the GOP Walk Away with the Midterms 

He could go back further. Median inflation-adjusted net worth — the collected wealth of the middle class — is lower now than it was in 1989, representing a 25-year stretch of stagnancy. And if you go back to 1973, you see that hourly compensation has lagged behind productivity, a unique split in the postwar era. Prior to that year, when workers got more productive they earned more money. After 1973, productivity continued to rise, but wages flat-lined. And these trends show no sign of changing

There’s certainly reason to believe, as Josh Marshall does, that this decades-long economic futility has enormous power to shape voter perceptions. And regardless of the economy’s few bright spots — lower unemployment, for example, or a higher stock market — the inescapable reality of stagnant and even falling wages reflects on the party in power, particularly if they view themselves as defenders of the economic fortunes of the average man on the street. 

Related: Unemployment at 5.8%? Here’s the Number That Really Matters 

Republicans pay lip service to wages, but don’t have anything to really offer on that front other than enhancing “job creators,” who may benevolently decide to trickle down some crumbs to everyone else. That works fine for them, because people have other reasons to vote for Republicans — national security, perhaps, or a shared expression of traditional values. 

In general, people vote for Democrats when they believe Democrats are on their side, or when the other side screws up so much they decide to give them a shot. And it’s hard to make the “we’re on your side” argument recently, to people who see their bosses profiting more off their labor than they do. Instead, voters lurch from party to party, hoping in vain for any political leader to help them out, which explains our succession of wave elections since 2006. 

Related: Why America Voted Against Obama’s Economy 

Leonhardt and Marshall both correctly identify this trend. They’re less clear on exactly how to combat it. Leonhardt, advised by Democratic policy mandarins that there’s no silver bullet on these matters, muses about slowing health care costs, improving education, and building infrastructure, before finally landing on a middle-class tax cut. Marshall asserts that nobody knows how to realign wages and productivity, that it’s a by-product of globalization and happening everywhere, and anyway, the wealthy use the political power attained from gobbling up all the economic gains to ensure their future profits aren’t challenged. 

Whether or not these points have merit, they are limited by the narrow range of mainstream party ideology. This is not the Democratic Party of your great-grandfather’s New Deal or your grandfather’s Great Society. The takeover of the party by more business-friendly interests — which ironically (or perhaps not) dates back to right around 1973, when wages decoupled from productivity — necessarily impoverishes the imagination around issues of economic security and prosperity. 

Related: Two New Signs the Economy Really Is Getting Better 

The party orthodoxy suggests that solutions must run through market incentives. Maybe you can increase the minimum wage for the truly impoverished, but everything else requires buying off corporate interests to jerry-rig an incrementally better bargain for the public. The architects of this strategy would argue that this is the only way to make such policies palatable to the public. The public has weighed in on this with a resounding rejection, because after 40 years, they’re understandably more interested in results. 

Once you open up the imagination, plenty of possibilities emerge. 

As Ryan Cooper points out, Democrats in power could simply advocate for writing checks to people, something so radical that it was called a “universal basic income” and endorsed by the likes of Richard Nixon in the 1970s, and put into practice in a small way when George W. Bush handed out tax rebates twice during his tenure. Dean Baker brings up the trade deficit, and how lowering the value of the dollar would make exports cheaper and get the country closer to a full employment policy that has the chance to increase labor power and raise wages. Mike Konczal has some critical ideas on reducing over-financialization, both the increasing share of national wealth moving through Wall Street and the funneling of corporate profits to shareholders through financial engineering instead of broadly sharing the fruits of productivity. 

Related: Tech Trade Deal with China Could Mean More U.S. Jobs 

Let’s add some others: 

  • Moving to a postal banking system would reduce living expenses for the poor by relieving them of the $2,400 a year they pay in interest and fees to predatory “alternative financial services” like check-cashing stores and payday lenders. 
  • Keeping common resources like energy and infrastructure public, rather than privatizing those functions, also can lower the cost of living, raising inflation-adjusted wages. 
  • Adding good jobs with proper pensions in the public sector — which employs the fewest workers since 1966 — could help. 
  • Even increasing housing density in expensive residential areas, more of a market-based approach, could yield benefits at the margins. 

Combating wage stagnation — a subset of income inequality, as the income growth currently all leaks out to the very top — requires stepping outside of the narrow chambers our politics builds to constrain our ideas to whatever doesn’t puncture the delicate sensibilities of the wealthy. Marshall is right to say “we need more openness to public policy experimentation.” But we also need openness to a different mindset, one that doesn’t bow and scrape to the altar of corporate profits, which sit at a record high while wages fall. 

Unfortunately, Democrats had the chance to show their ability in breaking the wage/productivity gap, but the past several years have been a missed opportunity, revealed by the fact that Republicans will have their largest House majority since the 1920s

Related: The New Senate Power Grid — Here’s Who Has the Juice 

Implementing these ideas will not be easy. They require challenging entrenched interests who only accumulate more power with more wealth. But articulating them shouldn’t be so taxing. Democrats must recognize that their program of pity-charity, corporate-friendly liberalism has failed. It’s time to empower the working class, sideline the financiers and actually speak to the concerns citizens are shouting into a void every day. 

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