Hollowing Out of the Middle Class is Concomitant With Rising Political Polarization

Two studies released recently by the Pew Research Center reveal two disturbing trends: as the middle class is being hollowed out by changing economic forces, political polarization is rising.

“The Lost decade of the Middle Class” report reveals the growing economic struggle of the middle class: “Since 2000, the middle class has shrunk in size, fallen backward in income and wealth, and shed some—but by no means all—of its characteristic faith in the future.”

A majority of those interviewed indicated that they believe that it is harder now than it was a decade ago to maintain the middle class standard of living.

Part of the reason for the pessimism is a decade of decline which saw, for the first time since the end of World War II, a fall in mean family incomes, and the hollowing-out of the middle. In 1971, for example, the middle income tier included 61 percent of Americans; by 2011, only 51 percent could keep up with that category.

Where has that 10 percent gone? The upper income tier rose by six percent while the lower income tier increased by four percent.

Those lucky six percent shared in the bonanza of the Bush years: the income pie grew for the upper income bracket by 17 percent. Those who were left behind fared less well: for the middle tier, the pie shrunk by 17 percent–this on top of the wealth loss of 28 percent.

Lackluster jobs numbers and the overall sluggish economy add to the pessimism. Years into the recovery, many in the middle class still feel the bite of the Great Recession. About four in ten (42 percent) reported their financial situation is worse now than it was before the recession. “Of those who say they’re in worse shape, about half (51 percent) say it will take at least five years to recover, including eight percent who predict they will never recover.” A similar percentage feel that they were better off a decade ago.

Though most respondents still believe in hard work as the ticket to a better life and hold out hopes for their children being better off then they are, few hold much hope for the nation as a whole. Only 11 percent of those polled are very optimistic about America’s economic future. The rest have only muted optimism or are outright pessimistic. And many don’t believe that they will have enough assets to last them through retirement.

Who’s at fault for this mess? Most feel that Congress is to blame for their economic woes, but many also lay blame at the door of banks and financial institutions. Large corporations and the Bush administration have also been identified as culprits by respondents . Virtually none of the respondents blame themselves or the middle class.

Significant economic dislocations have political consequences. As societies lose their middle class and become more divided by wealth and income, they tend to become more polarized politically. This phenomenon, as measured by growing partisanship, has indeed been a feature of the American political scene in the last decade.

Another Pew report, “Partisan Polarization Surges in Bush, Obama Years” reveals that the level of political polarization in America has increased to record levels. The report states, “the average partisan gap has nearly doubled over this 25 year period, from 10 percentage points in 1987 to 18 percentage points in the new study.”

The link between growing partisanship, political polarization and the declining economic fortunes of the middle class is not accidental. Political scientists Nolan McCarty, Keith T. Poole and Howard Rosenthal studied the link between income and partisanship in America and found that “polarization of the electorate has increasingly taken place along economic or class lines. Unlike the patterns of the 1950s and 1960s, upper income citizens are more likely to identify with and vote for Republicans than are lower income voters.”

Divisions are largest on issues that affect income redistribution, politics of workplace, social spending and immigration; all bottom line issues that affect the wallet. The reason for these fault lines is simple and ancient: those who have do not want to share with those who don’t.

One of the effects of growing polarization is Congressional gridlock and the perceived ineffectiveness of the federal legislature: growing polarization makes it harder to form political coalitions needed to pass significant legislation at the federal level. And when legislation does pass, it is often heavily partisan, benefitting one segment of society at the expense of others.

This political catatonia can be dangerous when significant policy matters become neglected. Currently the inability of the Congress to act threatens to send the nation over the “fiscal cliff.”