Business/Finance

Economic Populism Vs. the new Gilded Age

By Martin Bosworth

Following up on my post discussing the “war on wealth,” two interesting New York Times articles came across my desk today:

“The Richest of the Rich, Proud of a new Gilded Age,” is an eye-opening look by the excellent Louis Uchitelle at the modern-day corporate barons who have built such an astonishing concentration of wealth at the top of the ladder that even some former and current corporate barons find it disturbing:

James D. Sinegal, chief executive of Costco, the discount retailer, echoes that sentiment. “Obscene salaries send the wrong message through a company,” he said. “The message is that all brilliance emanates from the top; that the worker on the floor of the store or the factory is insignificant.”

Almost as if in response, today Robin Toner does a thorough job discussing and dissecting the Democrats “new populism:”

While campaigning in Iowa last week, Senator Barack Obama, Democrat of Illinois, suggested that even those who followed the standard advice for coping with a globalized economy — get more education for higher-skilled jobs — were losing out. “People were told, you’ve got to be trained for high-tech jobs,” Mr. Obama said, “and then it turned out that some of those high-tech jobs were being outsourced. And people were told, now you need to train for service jobs. And then it turned out the call centers were moving overseas.”

I like the Obama quote because it crystallizes a root source of the current economic dissatisfaction–whereas issues of populism and class have often been (wrongfully) allocated as “working-class” issues, nowadays the modern, salaried, white-collar worker with a college degree is as in just as much danger of losing their job to lower-paid competitors–maybe more so.

One of the largest opposition sources to the nightmarish Frankenstein’s monster that was the immigration “compromise” was from the American IT sector–engineers, programmers, and other techies who saw the bill’s push to expand H1B visas as yet another tool to crush their wages and bargaining power. The outsourcing wave has led to a huge amount of ugly acrimony between the various factions, as the message to white-collar workers is now crystal clear: We don’t need you. We can ship your entire department over to India for a third of the cost of your salary. So shut up, give up your vacation, take the wage cut, and be happy you just have a job.

In the new Gilded Age, the middle class now knows what the working class has always known–that you’re one paycheck away from disaster. You’re no longer considered a part of the company, someone in whom time and money are invested with care and consideration in hopes of a long relationship that profits everyone–now you’re just a cost on a balance sheet, always being weighed against how much money the company would make if your seat was empty. You can’t rely on the wealth created by home ownership anymore–foreclosures are at record highs, affecting even high-paid workers in affluent parts of the nation. You’re squeezed in, maxed out, and priced out all at the same time.

And because of this grim realization, you’re seeing discussions of unions, health care, collective bargaining, tuition subsidies, student loan cuts, and challenges to credit card companies’ abuses like never before. So it may be self-interest, but it’s enlightened self-interest no less. The middle class is a distinct (if not unique) American creation, and it realizes it’s on the fast track to extinction–and it’s fighting back.

So it should come as no surprise to pundits that the Dems are taking this ball and running with it. It should also come as no surprise that John Edwards is leading the way on this issue–quite literally, thanks to his new poverty tour. It’s what has kept him in the race despite all of his problems and missteps–no other candidate talks as sharply, honestly, or strongly about the economic terrorism facing our country. It’s why I’m still with him, and why I’m glad to see the other candidates taking a cue from his efforts.

The more that issues of class, populism, and economics–the widening gyre between the populists and the robber barons–takes center stage, the more the country will demand change and solution.

There are no guarantees in life, but that doesn’t mean there are no opportunities either. All people want is a chance to make good for themselves, and when those chances are being starved to death, we have to fight to keep them alive.

8 replies »

  1. I heard a story on the BBC radio last week that was interesting. The gist of it is that the salaries in India have already risen enough that some companies are ending their outsourcing to India because it’s just as cheap to keep the jobs here at home.

    Interesting dynamic.

  2. Indeed! I heard the same thing not too long ago–the demand for skilled Indian employees is actually causing a wage hike, leading many American companies to bring the jobs back here.

    The wrinkle there is that the skills Indian techies are being schooled in are not hard skills but soft ones–customer service, teamwork, client relations, etc. This isn’t a slam on them, but it does play up the fact that years of turning out “skill mill” candidates who can connect the dots but freeze up when faced with a challenge has a net effect.

    Of course, the downer here is that when these jobs return to America, they’ll be coming back with lower wages, no benefits, etc.

  3. What’s wrong with Kansas? Judging from the shift in voting last year for congressional candidates, maybe nothing’s wrong with Kansas any more. Everywhere, it seems, voters are noticing the gross unfairness of the American economic/governmental system and again voting their wallets. And GOP hypocrisy on money matters (“a rising tide lifts all boats”) is reminiscent of hypocrisy on Iraq (“we’re just a few months from victory”)

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