Senator Charles Schumer, in response to a question posed by my brother Dante Atkins on behalf of Daily Kos, gets at the heart of the problem:
Yes, it is fundametnaly shifting. This loss in income, America has never had a loss in median income for such a long period of time. And it’s certainly never had it, even close to such a period of time when the GDP between 2001 to 2014, I guess I would have to figure it out, I think for 2/3 of those years, maybe 3/4, GDP was going up but middle class incomes were going down. And in part, as I mentioned in my speech, that’s because technology allows capital to get the benefits of productivity much more than labor.
But sooner or later, you can’t have labor go down down down either politically or substantively, so we have to look–that’s why you’ll see, that’s why in some of these things we propose they’re not just going to be nibbling at the edges. They’re going to be significant changes. Not to stop technology. You can’t. It’s Luddite. And technology has all these benefits: productivity, efficiency. But, for instance…one question I’ve asked myself is why with all of this new competition don’t costs go down significantly for the middle class person. That might involve some restructuring.
The fact that Schumer, long regarded as a close friend of Wall Street, is able to articulate the problem in this way and suggest that Democrats are working on large-scale solutions is a good sign.
But it’s not as if this is a new and surprising problem. Wages have been stagnant despite skyrocketing productivity and asset growth for the last 40 years, not just for the last 5. The only thing that is different in recent years is the wageless recovery from the Great Recession, but that wasn’t exactly an unpredictable phenomenon.
Policymakers have been using asset and debt growth to disguise wage stagnation for decades now. The Dow has risen from 4,000 to a proposterous 17,800 in just a generation. Housing prices have increased exponentially in that same time. Credit card debt, which used to be essentially nonexistent for middle class households, has risen to $16,000 per household. All this even though we have now moved to a society of two breadwinners in a coupled household instead of one.
That’s a radically unsustainable trajectory, particularly in an economy dependent on consumer spending. International sales and production can keep the stock market propped up for a while despite a weak U.S. consumer base, but housing can’t long sustain itself completely out of proportion to people’s ability to afford homes. Credit card debt (to say nothing of student loan debt) cannot continue to rise against stagnant or falling wages. Something has to give.
And that doesn’t even begin to account for the inexorable deskilling, flattening and mechanizing of even the white-collar economy due to online platforms and intelligent programs to go along with outsourcing and robotics substituting for blue-collar jobs.
Neither Republicans nor Democrats are coming close to offering the sorts of solutions that will be necessary in this environment, nor is either party even acknowledging the frankly terrifying scope of the economic problem.
It’s going to take a fundamental restructuring of the economy, and perhaps even the laws that govern the relationship between private corporations and the people on whose existence they depend.