by Daniel Nardini
The debate about what killed the American middle class is probably one that will be with many business people and historians for at least another generation. Recently, an article in the Business Cheat Sheet has alleged that the middle class is the victim of its own voting record. So many of us voted for conservative politicians who essentially were responsible for making laws that stifled minimum wages, led to industries relocating to other parts of the United States and then outside the country, and conservative politicians making sure that corporations kept their tax incentives even though they had relocated outside the U.S. In my view, only part of this is true. Sadly, outsourcing is a phenomenon that did not and still does not know any one political side of the spectrum.
What most Americans do not realize is that outsourcing began all the way back in the 1970’s. Many corporations at first started to relocate to U.S. states with lower tax rates, less union activity, and where the laws were indeed made by more conservative politicians. But this did not last long. Eventually many corporations started to relocate outside the United States altogether. At first, many went to Mexico. Some corporations are still in Mexico, and some have relocated there from Asia because it is closer to the United States. The trend had been established early in the 1970’s—corporations began to demand “give backs” from the workers and unions or otherwise they would relocated outside the country where the unions could do nothing about it. Overall, the unions largely complied with giving back decades of hard fought benefits such as pensions, the right of employees to organize unions, and seniority. This did not stop the corporations from relocating anyways and screwing the workers.
Under U.S. President Ronald Reagan (1981-1989), union busting, corporate greed and even corporate murder, and an acceleration of outsourcing became the norm. The minimum wage stagnated for 12 years, and working conditions for ordinary people took a dive. These facts cannot be altered. However, I cannot just assign the blame to just conservatives and the Republicans alone. The Democrats under succeeding U.S. President Bill Clinton (1993-2001) were responsible for removing all trade barriers with China which accelerated the number of corporations outsourcing American jobs and investments to China and other Third World countries. The Democrats did not exactly help the unions either. Since the 1970’s, the unions’ influence had been going downhill. In part they are responsible for their own decline by the fact they did not effectively stop corporate outsourcing during either Democrat or Republican presidential administrations. In the end, the American worker paid the price, and it did not matter who they voted for in terms of which political party.
Sadly, the average American has been presented with candidates who did not and still do not address the problems of outsourcing and the laws that allow the corporations to keep their tax benefits even though they relocated outside the United States. Today, there is in my view no real American middle class. It had been killed by corporate greed, union inaction, and politicians pandering to power pro-business special interest groups. This was a long time in coming. We still see this occurring with housing being largely not affordable, wages stagnated, a larger poor class than ever before in U.S. history, jobs, let alone good paying jobs, largely unavailable, and whole towns and cities devastated by economic decline and neglect. Halting this trend and rebuilding the American economy will require radical solutions that are not popular with conservative politicians, nor popular with corporations. These solutions include raising the minimum wage to be a livable wage, ending all tax privileges for corporations that outsource, penalizing corporations that pollute or commit fraud, giving more rights and protections for workers trying to organize unions, reducing the tax base for small mom and pop businesses that still keep their businesses and investments in this country (as well as give them incentives and government benefits for doing so), and making it harder to outsource American jobs in the first place by law. To me, doing all these things separate the leaders from the career politicians. This much the people can vote on, and more important, should be voted on if we are to reverse the decline and decay of our country.
Outsourcing Killed the Middle Class
by Daniel Nardini
The debate about what killed the American middle class is probably one that will be with many business people and historians for at least another generation. Recently, an article in the Business Cheat Sheet has alleged that the middle class is the victim of its own voting record. So many of us voted for conservative politicians who essentially were responsible for making laws that stifled minimum wages, led to industries relocating to other parts of the United States and then outside the country, and conservative politicians making sure that corporations kept their tax incentives even though they had relocated outside the U.S. In my view, only part of this is true. Sadly, outsourcing is a phenomenon that did not and still does not know any one political side of the spectrum.
What most Americans do not realize is that outsourcing began all the way back in the 1970’s. Many corporations at first started to relocate to U.S. states with lower tax rates, less union activity, and where the laws were indeed made by more conservative politicians. But this did not last long. Eventually many corporations started to relocate outside the United States altogether. At first, many went to Mexico. Some corporations are still in Mexico, and some have relocated there from Asia because it is closer to the United States. The trend had been established early in the 1970’s—corporations began to demand “give backs” from the workers and unions or otherwise they would relocated outside the country where the unions could do nothing about it. Overall, the unions largely complied with giving back decades of hard fought benefits such as pensions, the right of employees to organize unions, and seniority. This did not stop the corporations from relocating anyways and screwing the workers.
Under U.S. President Ronald Reagan (1981-1989), union busting, corporate greed and even corporate murder, and an acceleration of outsourcing became the norm. The minimum wage stagnated for 12 years, and working conditions for ordinary people took a dive. These facts cannot be altered. However, I cannot just assign the blame to just conservatives and the Republicans alone. The Democrats under succeeding U.S. President Bill Clinton (1993-2001) were responsible for removing all trade barriers with China which accelerated the number of corporations outsourcing American jobs and investments to China and other Third World countries. The Democrats did not exactly help the unions either. Since the 1970’s, the unions’ influence had been going downhill. In part they are responsible for their own decline by the fact they did not effectively stop corporate outsourcing during either Democrat or Republican presidential administrations. In the end, the American worker paid the price, and it did not matter who they voted for in terms of which political party.
Sadly, the average American has been presented with candidates who did not and still do not address the problems of outsourcing and the laws that allow the corporations to keep their tax benefits even though they relocated outside the United States. Today, there is in my view no real American middle class. It had been killed by corporate greed, union inaction, and politicians pandering to power pro-business special interest groups. This was a long time in coming. We still see this occurring with housing being largely not affordable, wages stagnated, a larger poor class than ever before in U.S. history, jobs, let alone good paying jobs, largely unavailable, and whole towns and cities devastated by economic decline and neglect. Halting this trend and rebuilding the American economy will require radical solutions that are not popular with conservative politicians, nor popular with corporations. These solutions include raising the minimum wage to be a livable wage, ending all tax privileges for corporations that outsource, penalizing corporations that pollute or commit fraud, giving more rights and protections for workers trying to organize unions, reducing the tax base for small mom and pop businesses that still keep their businesses and investments in this country (as well as give them incentives and government benefits for doing so), and making it harder to outsource American jobs in the first place by law. To me, doing all these things separate the leaders from the career politicians. This much the people can vote on, and more important, should be voted on if we are to reverse the decline and decay of our country.