Thursday, August 25, 2011

Fred Siegel: Who Lost the Middle Class?

Forty years from now, politicians, writers, and historians may struggle to understand how America, once the quintessential middle-class society, became as socially stratified as Europe or even Brazil.

Should that dark scenario come to pass, they would do well to turn their attention first to New York City and New York State, which have been in the vanguard of middle-class decline.

It was in mid-1960s New York—under the leadership of a Barack Obama precursor, Hollywood-handsome John Lindsay—that the country’s first top-bottom political coalition emerged. In 1965, Gotham had more manufacturing jobs than any other city in the country.

But the city’s political elites used eminent domain to push manufacturing aside in favor of business services; they also expanded social programs to help African-Americans and Puerto Ricans. The service sector proved rough going for the less educated, and the social programs failed. New York City responded by inflating its unionized public-sector workforce to incorporate minority workers.

Higher taxes to pay for bigger government joined higher crime to produce a massive exodus of manufacturing and middle-class jobs. Over the last 45 years, New York has led the country in outmigration. A recent study by E. J. McMahon and Robert Scardamalia of the Empire…

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