Fifty years ago economic growth in America was leading to rising wages across the income spectrum and progress towards broadly shared prosperity. In that context the nation launched a series of Great Society initiatives to expand opportunity to those who were still being left behind – and to improve the lives of all Americans.
Over that decade poverty in America declined substantially, from 22% of the population to 14%. But, beginning in the 1970s, our economy changed and wages stopped growing with the economy. The gap between the very wealthy and everyone else began to grow, and poverty has increased.
MassBudget’s new report From Poverty to Opportunity: The Challenge of Building a Great Society traces how the economic and policy changes since the launch of the Great Society have affected the lives of people at all income levels in Massachusetts.
While we see real success from a number of programs, including SNAP (Food Stamps) and the Earned Income Tax Credit that are lifting hundreds of thousands of people above the poverty threshold, far too many children remain poor or near poor. In the years since wages for low and middle income workers stopped growing with the economy poverty and child poverty have increased in Massachusetts.
Poverty puts children at risk for poor health outcomes, higher risk for dropping out of school, and a greater likelihood of a lifetime of poverty. And when children don’t have the opportunity to reach their full potential we undermine the long term strength of our economy.
To read the report, please click HERE.
I have referred to your reports often.
Another factor was large numbers of women entering the workforce.
Combine that with baby boomers entering the workforce and you’ve got too many people for the existing jobs.
Fast forward into the 80’s and you begin to see the effects of technology on the workforce. It starts in the back office and soon spreads throughout companies.
We really need to ignite job growth like we had here in the 90’s. When the market is really rocking that’s when you see some real pull upwards for those on the edges.
In the 1980s after predominately liberal economic administration since the New Deal. That set a GOP-led paradigm that the Democrats — Clinton and Obama — have done little to change. Demographics and globalization have affected every country in the world, but the US is doing significantly worse for most people, relatively speaking, than most other developed countries primarily because of the “Republican drag” on job creation and median family income growth.
The economy was seriously awry 1974-82. Hard to pin that specifically on Reagan.
I’m not making a partisan point. I think the government is powerless against mega-trends. If government could make a real difference then things would be better right now. The government (I believe) make some difference however, and that should be part of it. I think that it’s only when things are really booming does it help the people who really need help.
There’s not a country on the planet where you can point and say “they are doing great.” I’m not talking about now even. A decade or so ago things were going great (GDP wise) in many W. European countries yet their unemployment was 2X ours
You can see that here (you need to enter years)
http://www.tradingeconomics.com/france/unemployment-rate
I would agree that more progressive countries have more people friendly employment policies, though most Americans who have business connections to Europe can cite some negative effects of that.
There is a difference in our economy today versus the 70s and 80s. Back then, we were competing with Japanese companies. We could compete by innovating. Today, we are being sold out by the leaders of our own corporations. We can’t compete by innovating, because whatever innovations we come up with, the corporations just move them offshore to make that cheap labor force even more productive.
In Western MA, we have lost so many manufacturing jobs, our economy has been hollowed out. Companies like Spalding Sports/Top-Flite golf, LEGO, Danaher Tool (Craftsman wrenches), Milton Bradley were all top-class manufacturing facilities which moved their jobs overseas. Other companies (Westvaco envelope, Columbia bicycle) were purchased by larger corporations and closed, with production moved elsewhere, most likely to other countries. Those are just the companies you might have heard of – plenty of other smaller companies have gone too.
I read a study that said that 43% of the industrial jobs left the Springfield area from 1980 and 2000. A sample list of jobs was provided, along with the number of jobs lost when the plants closed (with peak jobs in parentheses). These are just jobs in the metal-working sector, companies that had been around for 50-100 years, and this list is from 10 years ago, with companies that closed from the period 1980 to 1990.
American Bosch: 1500 (1800)
Chapman Valve: 250 (2700)
Columbia Bicycle: 250 (1000)
Kidder-Stacy: 90 (325)
Northeast Wire: 35 (125)
Oxford Precision: 60 (120)
Package Machinery: 400 (950)
Plainville Casting: 65 (75)
Portage Casting: 60 (100)
Rafferty Steel: 50
Rexnord Roller Chain: 200 (675)
Springfield Foundry: 75 (285)
Van Norman: 275 (1200)
Van Valkenberg Plating: 40 (135)
Wico Prestolite: 250 (675)
Atlas Copco: 565 (1,000)
Easco Hand Tools: 2,000 (2,200)
Storms Drop Forge: 125 (250)
If you read the analysis of some of these closings, the federal government actually provided companies with tax benefits to build new plants in the South which allowed companies to move out of the more expensive Northeast.
This is a national problem, but the state needs to be banging this drum too. We can’t have an economy of just doctors, lawyers, college professors, and biotech (which is all in Boston).
I worked at a software company in the 90’s and early 00’s and we used to have a warehouse in Wilmington with 55 employees who shipped the documentation (about 15-20 books) and the media to install the product. The books went first replaced by CD’s and then the media became digital download and then so did the CD’s. In my current manufacturing company we make twice as much product as we did 20 years ago with half the people.
Yes, the offshoring of jobs is only one of a few factors which have decimated the job scene in this country. I see at least five things:
1) Offshoring of jobs.
2) Technological advancements (i.e. the internet, robots)
3) Super-sizing/consolidation of corporations (mergers/acquisitions)
4) War on labor unions
5) War on the public sector
Our labor force probably could have withstood one of those factors, maybe two. But all four are wildly prevalent, and that is why there are no jobs for the average person.
This is a deliberate action by the super-capitalists. I know someone who fits this category, brilliant, the founder of multiple companies, and his view of the world is that US workers have to lower their standard of living, and we have to remove all social programs so that people get really hungry – and then people will adapt and figure out what to do by themselves to keep from starving. It’s a pretty sick world view.
Hang the super-capitalists?
No, but we at least have to understand the problem, and who is working against us, and what their end-game is.
Not sure many others would as well.
Are their people who think like this person you mentioned? Yes of course. There are people who advocate revolution as well. The world is filled with lots of different people.
Can the demise of manufacturing in Springfield (or anywhere else) be primarily attributed to the five points you mention? I don’t think so. You’re basically making a case for protectionism and/or nationalization and both of those have not proven to be effective.
But you are certainly entitled to your world view if it helps you get through the day.
Do you really believe that corporate-backed Republicans are looking to remove the social safety net because they want to save some government money? The same Republicans who had no problem deficit spending under Reagan?
The end-game here is to make the population more pliant, more willing to work long hours for little pay. Welfare currently acts as a wage floor – it is true, why would someone work for $3/hour when they can get $3.50/hour from welfare benefits? And think about this for a minute – if you could hire someone to pull weeds at your house for $1/hour, wouldn’t you do that? And wouldn’t it be great if people were clamoring for that $40/week? You’d have a lot of workers to choose from. And what if we eliminate child labor laws – after all, it was just 100 years ago that kids worked in factories. So from that perspective, if you eliminate the minimum wage, eliminate social services, eliminate regulations, then yes, more people will be working – but they will still not be living a good life, living the American Dream. They will be living like the third world – working to exist.
And regarding the demise of manufacturing in Springfield, yes, it can be attributed to those precise points. Jobs were moved from the Pioneer Valley first to the South, and then overseas. Later, successful local companies were bought out by global companies and production shifted elsewhere. Technology made jobs, professions, and industries irrelevant – even before LEGO moved its factory, it had automated its warehousing system with conveyors, robots, and barcode scanners. The FCB in Springfield waged a war on government employees, resulting in a lower offering of services and lesser qualified workers. In general, our government services today do not compare to those offered 40 years ago, primarily because we focus on “starving the beast” of taxes. And finally, the presence of unions *does* cause more of the fruits of labor to stay with labor, so the ability for corporations to set up shop in non-union states was directly responsible for plant closings.
What is your alternate theory?
that starting off the way you did would not work very well in moving a conversation forward.
You are also all over the place with your argument.
I would also suggest that your viewpoint is skewed and I strongly disagree that capitalists and Republicans have turning the US into a third world country as a goal.
There’s really no point in continuing this. I see no meeting of the minds.
with the status quo. Not only do the rich often have use of exemptions that allow them to keep more of their earnings, every time we cut taxes the lion’s share of the savings goes to the rich.
Once upon a time, we didn’t have to spend money for our kids to participate in school sports. Kids didn’t have to pay to park their cars at school. Kids didn’t have to pay to take the school bus. We didn’t beg parents for school supplies.
I realize these are costs, not income, but the economy is like a big pie that grows a couple percent a year if we’re lucky, and we’ve made a semi-conscious decision to shift costs downward so those upward can keep more of that pie.