The Rich are Getting Much Richer and the Rest of Us Are Getting Poorer -- What Can We Do About It?

Saint Mary’s Panel Tackles the “Demise of the American Middle Class”

As Americans struggle with a stubborn jobs crisis, fret over the prospect of a double-dip recession and march on Wall Street to protest corporate greed, more and more are asking: Whatever happened to the American Dream?
That was the question in the spotlight at Saint Mary’s last week in a panel entitled “Poor and Poorer: The Demise of the American Middle Class.”

The panelists held different views of the reasons for the shrinking middle class in America but all agreed that the phenomenon is real -- and alarming.

Mohamed Eisa, a business professor at Diablo Valley College, cited U.S. census figures showing that 46 million of the 310 million people in the U.S. are now living in poverty and 15 percent of Americans are below poverty the line -- the highest level since 1993.

Jack Rasmus, a lecturer in SMC’s politics and economics departments and author of “Epic Recession: Prelude to Global Depression,” made a convincing case for America’s growing income inequality. In 1979, he said, the wealthiest 1 percent of Americans commanded 8 percent of all the income in the United States. Today, they control 24 percent. The median income, adjusted for inflation, is less today than it was 30 years ago.

And in an observation that certainly hit home with the nearly 100 students in the audience, he added that college costs are rising by 7 percent a year - much faster than the rate of inflation. “Students are becoming indentured to the banks,” he said, adding that for the first time in about 100 years, the next generation is not moving up the income scale. In fact, more are moving down.

“What happened to the American dream? Obviously, it’s becoming a nightmare,” said Kara Boatman, a professor in the School of Economics and Business Administration.

New Face of Poverty

Solomon Belette, executive director of Catholic Charities of the East Bay, deals with the realities of the problem every day. “The face of poverty has changed,” he said. No longer is it only the chronic poor and uneducated. Poverty is reaching up into the middle class and childhood poverty is on the rise.

“The super rich continue to get richer at the expense of the rest of us,” said Ethel Long-Scott, executive director of the Women’s Economic Project Agenda, who painted the problem in terms of a war between corporate America and the populace.

She warned that “California is now entering the same crisis that affected the Rust Belt,” where sharp declines in manufacturing jobs in cities like Detroit, Cleveland and Buffalo, New York, created a downward cycle of increasing poverty. In fact, unemployment in many parts of California, especially the Central Valley, is near Depression levels and shows no signs of abating.

She criticized Governor Jerry Brown for responding to the state’s debt crisis by implementing severe cuts in social services and in education spending.

Spending Cuts Not the Answer

Boatman also took aim at the argument so popular in Washington and on the state level that the cure for America’s ills is to cut spending.

“The focus on reducing spending only serves to increase income inequality,” Boatman said, pointing out that the growth of the middle class in this country was due mainly to government-funded mandates, like Social Security, the minimum wage, and the G.I. Bill, which allowed a whole new class of people to get a college education.

Most members of the panel, which was moderated by Professor Monica Fitzgerald, coordinator of the Liberal and Civic Studies program, agreed that wide-ranging changes are needed to address the nation’s growing income inequality.

“The key is to get money back into the middle class,” Rasmus said, arguing for an end to tax loopholes and tax havens that allow the wealthy to avoid paying their share. He called for “a fundamental restructuring of the economy” in five areas -- employment, health care, retirement, banking and taxes. For Eisa, too, taxes, are a big part of the solution. “We have a moral obligation to correct the imbalance,” he said. “The wealthy have a special responsibility to their fellow citizens.”

“The Social Contract Is Being Torn Up”

Long-Scott went further, saying that what’s needed is a broad, transformative movement to redistribute wealth. “The social contract is being torn up,” she said. “We are in a real battle in the United States. Will it be run by corporations or will it be run by the people?”

For Boatman, the answer is to take a long, hard look at our own role in the crisis. “The blame lies with all of us. We’re happy to have things be efficient and not equitable -- until it affects us,” she said. “We need to start voting our consciences and not our wallets.” She invited the students in the audience to “be more civic-minded than my generation.”

Belette also urged the next generation to take a new approach. “Deepen your social justice awareness. Show solidarity with the poor. Become engaged in a socially responsible way,” he said. “It’s important to have values aligned with the kind of society we want to create.”

“We keep focusing on the means to the end,” he added. “We need to ask, ‘What is the end?’ ”

Teresa Castle
Office of College Communications

Related story: Henning Institute lecturer Father William O'Neill's address, “A Little Common Sense: Catholic Social Teaching on the Economy."