From Factory Floors to Gig Economy: The Disappearance of America’s Middle Class

Dr. Jim: [: 00:00:00

Means we're in an environment where the vast majority of American people are two or three months away from being completely bankrupt. That is what we are talking about when we we ask the question, how did we get here?

s Ronald Reagan, two is Jack [: 00:01:00

So let's take a look at what happened. During the Reagan administration that set the stage for where we are today. Now I've mentioned before in previous episodes about how Republican economic and tax policy has led to a 50 trillion theft from the bottom 90 percent to the top 1%. That wealth transfer accounts for 600, 000 in wealth that has been robbed and stolen from the bottom 90%.

To feed the 1 percent

and no matter what economic crisis happens. What do you notice? The 1 percent continues to get richer and richer. The foundation for all of that was set During the nixon administration and then it was accelerated during the reagan administration So what were some of the things that happened during the Reagan administration that set the stage for this?

f the things that we have to [: 00:02:00

Before The Nixon era and before the Reagan era, you saw the greatest period of economic growth for most Americans happened in the post World War II era. Now, even considering how many people were left out of participating in that growth. It still represents by the numbers, a great period of economic expansion.

mic expansion was built on a [: 00:03:00

That all changed when Reagan took over. Reagan actually changed the criteria and his conversations and along with Don Reagan's conversation, who was the treasury secretary under Reagan, their conversations with CEOs boil down to freeing the American economy from regulation. And the actual policy involved dismantling everything and anything that would be structured to help the middle class.

that time was shrinking the [: 00:04:00

S.

And one of the suggestions that was given during the time was to ship manufacturing capabilities overseas or across borders to take advantage of a couple of different things. First and foremost, it would be labor. Then second would be regulatory advantages that could be tapped into. Now, this was a tough conversation to have with CEOs because of the upfront costs that would be incurred by shipping all of these factory and manufacturing capabilities overseas, but the conversation that was had.

To overcome that was that, yes, there is an upfront cost, but once those factories are built over the long run, you're going to recognize a lot more gains from that effort. And that started the slow trickle of manufacturing decline from the Reagan era going forward. When we look at how manufacturing has been transformed pre Reagan to today.

picture. Prior to the Reagan [: 00:05:00

And this was all part of a broader strategy to. To shift the economy from a manufacturing economy to a services economy. And one of the things that you have to understand when it, when you shift that manufacturing capability overseas, you greatly dilute the power of skilled trades in the middle class, which was the backbone of American society up until that point.

And now. We are faced with an economy that's increasingly made up of service sector employees and those employees have less bargaining power, lower wages and lower standards of living than those who are in the manufacturing space and skilled trades.

blue collar worker to easily [: 00:06:00

This transition,

one of the easiest parallels to draw is how in the 80s. A 20 bill would be enough for you to go to the movies, get tickets for a family of four, have soda and popcorn, all with a 20 bill. And when you look at today, what does that 20 bill get you at the movies? It gets you one ticket and maybe a snack. That's a great example of how much more difficult it is today to make ends meet than it was in the 80s.

me standard of living today, [: 00:07:00

That gives you a picture of the impact of the Reagan administration and especially his forced obsolescence of the manufacturing sector, thanks to policies that he and Don Regan put together as an effort to deregulate American society, but those two aren't the only people that are responsible for getting us to where we are today.

The other person that we have to look at is Jack Welch. Jack Welch is often. Propped up as a great business leader. He was the one that took GE to the next level. But when you look inside what actually happened during his leadership under GE.

actices in place where every [: 00:08:00

And on top of that, Jack Welch's philosophies drove other CEOs and acolytes of his philosophy to look at constantly putting downward pressure on labor, on compensation, on benefits, making it harder and harder for the average worker to make ends meet. And you pair that with the constant offshoring that you saw in the late eighties and through the nineties and the early two thousands, that indicates to you how the value of the American worker has been crushed under Republican policies and Republican aligned business policies.

and carried forward by every [: 00:09:00

Because what you have in office today in the Trump administration are a collection of billionaires who have openly said that the American worker makes too much money. And that's why you see the attacks on the federal government, the regulatory state all of the things that are designed to keep the average worker.

And the average person safe against the predatory interests of big business.

That's why all of those things are getting taken away because it is in the interest of this administration. It is in the interest of Republicans to do whatever they can to create a two class society. At the top of the heap are ultra wealthy billionaire whites, and then everybody else underneath them.

That forms the working class.

e being deliberate in trying [: 00:10:00

So when you think about how did we get here and why is it so difficult to make ends meet? It's not because of the immigrant. It's not because of the black person. It's not because of the Indian, it's not because of the LGBTQIA community, plain and simple. The reason we are where we are.

Is because of a 50 year con job that has been run on the American people by the smoke and mirrors of the Republican tax and economic policy.