The Vanishing Middle Class: Prejudice and Power in a Dual Economy, by Peter Temin

The American dream has become a pre-apocalyptic nightmare where the richest have steeply increased their share of the wealth, pushing even the most aspirational workers into a cycle of inescapable poverty. Crushed by the harsh grind of daily existence, in a life that bears no resemblance to the luxurious comfort of the top 20 per cent, the working poor blame all but the rich for their plight, and support political elites whose policies promise alleviation, but deliver entrenchment, of poverty. The economy is in essence split into two, while a thin veil of democracy prevents the middle classes from recognising the plutocracy that presses down upon them.

As much as this sounds like a preamble to Suzanne Collins’ dystopian trilogy The Hunger Games, it is in fact the picture painted by MIT economist Peter Temin in his compelling book on the state of the US economic system in the run-up to the recent presidential election. We are given a careful analysis of “the hollowing out of wage distribution and the consequent destruction of middle-class jobs”, as well as an exploration of historical racist and classist policymaking on issues of healthcare, public education, incarceration, infrastructure and debt reduction, all of which has promoted a widening of inequalities. The middle class – defined as “households earning from two-thirds to double the median American household income” – held three-fifths of all income in 1970, and only two-fifths in 2014. Between 1993 and 2010, middle-waged jobs fell by 6 per cent while low-paying and high-paying jobs rose by 3 per cent. These figures show a significant shift in the US economy towards ruling rich and extreme poor, which has led to comparisons with developing countries.

Temin also shows the co-presence of two very different Americas. In doing so, he provides an engaging commentary on the complexities of policy developments and their impact on workers’ conditions, as well as the problematic voting behaviour that seals their fate. He argues that, instead of blaming migrants or blacks, impoverished white Americans and the struggling middle should understand the implications of financial policy developments since the 1970s.

Temin explores the processes that enable the wealthy to dominate decision-making and shut out the majority. He argues that the 1 per cent favours policies that focus on deficit reduction through spending cuts rather than increased taxation and public investment. They are able to sell their policies to ordinary voters both through expensive marketing and control of information flows, and by encouraging them to think that such policies ensure that the undeserving poor are not rewarded. In short, the rich make policies that benefit the rich and placate the poor while denying them a basic standard of living.

The trend towards a decline of middle-wage workers is not an exclusively American phenomenon and European comparisons are provided (the proportion of those earning mid-level incomes fell by 12 per cent in the UK between 1993 and 2014). This trend has unfortunately not deterred the ordinary worker from voting for low taxation rather than investment in infrastructure. A dystopian dual economy, of the lavishly rich ruling the struggling poor, is unfortunately not limited to fiction.

Nicola Ingram is lecturer in education and social justice at Lancaster University.

The Vanishing Middle Class: Prejudice and Power in a Dual Economy
By Peter Temin
MIT Press, 256pp, £21.95
ISBN 9780262036160
Published 27 April 2017