Commentary - March 11 2009

Where did the middle class go?
It was killed by Reagan and his friends

By Steve Hammer

We were flipping through the cable channels one night last week out of boredom when we stumbled upon an excellent documentary film, Indy in the ‘50s, produced by Channel 20 some time ago.
Exhaustively researched and full of archival footage, the documentary showed our city in seemingly more innocent and prosperous times. It was an era where streetcars carried people around town, a time when L.S. Ayres and The Wm. H. Block Co. were the main retailers and when thousands worked at factories scattered across the city.
The 1950s were definitely not my era. I have no nostalgia for drive-in restaurants, Elvis music and the like. But the film portrayed the city as one with a strong sense of pride, community and compassion – and I wish that 21st century Indianapolis would acquire some of those traits.
The biggest difference between Indianapolis in the 1950s and now, as I see it, was that there was opportunity everywhere you looked, at least for white people. If you’d just recently left the military, well, you could go to college for free under the GI Bill. If you wanted to buy a house, you saved up for a down payment and you could get a low-cost mortgage.
If you needed a job, General Electric or Allison or International Harvester were all willing to hire you. People seemed like they had half a chance to prosper. And thus was built the great American middle class and an unprecedented era of prosperity.
The streetcars, department stores and jobs of the ‘50s are long gone, as well as the concept of the middle class, are dead and buried and will never return. But it’s not too late – yet – to think about restoring a fundamental sense of opportunity.
Starting with Richard Nixon and Ronald Reagan, and continuing under George W. Bush, American domestic policy was built around the concept of redistributing wealth to the top 1 or 2 percent of people. Small businesses were strangled by regulations and red tape while big businesses were given an incentive to grow larger and larger, gobbling up smaller businesses along the way.
At the same time, the middle class was eliminated by a combination of union-busting and a flood of cheap foreign goods pouring into the country, making American manufacturing unable to compete.
The creation of the middle classes in America came, in large part, from the labor unions, who insisted that employers provide safe working conditions, health care and stability in the workplace. Their existence set up a baseline for even non-union jobs to follow.
One can trace the events leading up to the Great Depression of 2008 on a straight line back to 1981, when Reagan fired 13,000 air-traffic controllers who’d gone on strike. This event is seen by both liberal and conservative historians as a major turning point in American history.
George F. Will wrote after Reagan’s death, in admiration, “It’s reasonable to conclude that Reagan's fracas with the controllers had huge economic consequences, domestic and foreign. It altered basic attitudes about relations between business and labor… It produced a cultural shift, a new sense of what can be appropriate in business management: layoffs can be justifiable even when a company is profitable, if the layoffs will improve productivity and profitability.”
That attitude of always looking at the bottom line has led to what we see now: hundreds of thousands of jobs being shed in order to enrich the shareholders. It also leads to management doing whatever it wants because there is no union to push back even a little.
That is why we have the world’s largest retailer, Wal-Mart, in a situation where it is not obligated to provide anything more than the federal minimum wage to its employees. And every time Wal-Mart workers have tried to organize union representation, in order to get a larger piece of the pie they helped make, the company has flown in specialists to squash the idea.
Which brings me back to my original point. The reason that the 1950s were so prosperous was that government and business were engaged in providing opportunity and fairness to the people because it was to their advantage to do so.
The only we’ll see a new middle class emerge out of this depression is if workers are allowed a place at the bargaining table during the reconstruction that must occur. And the only way that will happen is if labor law is updated to reverse Reaganism and give workers that opportunity.
As a union worker, I have a guaranteed wage scale, reasonable health care benefits and an established grievance procedure. Wal-Mart workers, and most other American workers, don’t.
The Employee Free Choice Act, supported by President Obama, would help even the scales on that front. Conservatives and big business, of course, oppose it.
But we’ll need that law, and others, if Indianapolis ever hopes to approach the prosperity it had some 50 years ago.