VIEWPOINT / THE COST OF LIVING AND MIDDLE-CLASS ANGST
By Timothy Weaver. Ph.D.
Gasoline in 1958 cost almost precisely, to the penny, what gas costs right now. In 1958, gas was .30 a gallon; in inflation-adjusted dollars, that was $3.00. The problem is that the enormous gains in productivity from 1958 to 2024 have mainly gone to executives, shareholders, hedge funds, brokerage firms, and other investors–not to the working and middle classes. Therefore, the upper half has surged ahead of inflation in purchasing power. In contrast, the bottom half has experienced 40 years of downward mobility caused by stagnated wages and salaries brought to them by those who have benefitted the most–the rich fat cats on Wall Street, corporate leadership, and their elected officials.
Since 1980, the bottom half’s new team, the GOP, has removed $22 trillion from state and federal revenues and placed those funds in the hands of millionaire and billionaire investors and captains of industry. That money could have been used for social and educational benefits to help offset the rising cost of living for the lower-income sectors.
No wonder inflation was a pivotal issue in the 2024 election. To the working classes, $3 gas seemed outrageous. Million-dollar houses, more so. They wondered why college was out of reach for many families. They wanted to know why healthcare costs were bankrupting many in the working and middle classes. Why isn’t pre-K education universally available? Why do groceries and cars seem to be costing them a fortune? These were not impediments to the good life for their parents and grandparents. Why them?
In 1950, families spent almost precisely what they devote today to groceries. The average annual grocery bill was $800. Today, that bill is $8000 —the same in inflation-adjusted dollars. Inflation is a constant. Purchasing power is not. The issue is not inflation but keeping up with or getting ahead. The lower half of the income spectrum has fallen seriously behind.
Their deserved benefit from productivity gains has gone to people like Trump and his cronies. The top 20% is the investment class. By luck or hard work, they have the capital to invest. The Republicans since Reagan have made sure they live the good life while the lower half struggles.
The most critical political shift of this and the last century is the ability of the GOP to screw the bottom half while convincing them to vote for the party. As long as the lower half believes their plight is caused by Democratic policies, and Republican policies will help them, the GOP will win elections.
[livemarket market_name="KONK Life LiveMarket" limit=3 category=“” show_signup=0 show_more=0]
No Comment