The middle class is often revered as the backbone of a prosperous economy. From an economic standpoint, this is true because the middle class possess strong purchasing power, which introduces a multiplier effect in the economy and grows it exponentially. Middle class is not only defined by their income bracket but the socio-economic position they acquire, which include values and expectations. However, in the last thirty years various U.S. policies along with communication technology based globalization has been minimizing the middle class by relocating a majority of the middle class people into lower class. Since the “backbone” of the economy is suffering, the economy as a whole is failing. In this answer, I will critique the argument of the
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He writes about the rise of the skilled worker and the increasing income for the lower class in addition to improving longevity. The decline of the upper class, according to him, has more to do with the fall in incomes than with the fall in status and power. He focuses on the distribution of “prestige” among the non-elites and discusses power when he writes, “ Power in reality come from the millions of voters and purchasers, organized and unorganized, in a complex flow of forces.” (p. 1). Faris possess an optimistic evaluation of the rise of the middle class and the increasing parity of power, which is suited to his time. The United States economy was prospering after the World War II with increased government regulations and spending, increase in wages for many social groups, and introduction of better health care coverage for low-income households. However, by the end of the 1970s public policy began to shift, as the neoliberalism became the ideology of the powerful. When President Ronald Regan began preaching his interpretation of Hayekian economics, the government regulation and intervention fell and major corporations gained more power in the globalized world. The combination of tax cuts for the richest, reduction in government safety nets, increasing cost of education, and fall in the number of low-skilled jobs owing to globalization has led to …show more content…
However, this argument is often weakened by employing the “trickle down effect” theory. According to the trickle down effect theory, if the policies are made such that the top income earners are able to earn as much money as they can through government support, their wealth will flow down to the rest of society. Therefore the policies instituted in 1980s that benefit the small segment of the population of rich people, does not mean that the country has to be worse off. The jobs created through the investment in the country’s economy by the rich people will lead to prosperity for all. However, as Mills explains, the deindustrialization of the rich economies takes place so that the capitalists can cut costs by importing cheap foreign labor. So government’s help to the rich does not necessarily mean a reinvestment in the local or even nation economy to create jobs and increase wages. In the capitalist system, the corporations have no allegiance to their economy as long as they are able to generate maximum
He writes about the rise of the skilled worker and the increasing income for the lower class in addition to improving longevity. The decline of the upper class, according to him, has more to do with the fall in incomes than with the fall in status and power. He focuses on the distribution of “prestige” among the non-elites and discusses power when he writes, “ Power in reality come from the millions of voters and purchasers, organized and unorganized, in a complex flow of forces.” (p. 1). Faris possess an optimistic evaluation of the rise of the middle class and the increasing parity of power, which is suited to his time. The United States economy was prospering after the World War II with increased government regulations and spending, increase in wages for many social groups, and introduction of better health care coverage for low-income households. However, by the end of the 1970s public policy began to shift, as the neoliberalism became the ideology of the powerful. When President Ronald Regan began preaching his interpretation of Hayekian economics, the government regulation and intervention fell and major corporations gained more power in the globalized world. The combination of tax cuts for the richest, reduction in government safety nets, increasing cost of education, and fall in the number of low-skilled jobs owing to globalization has led to …show more content…
However, this argument is often weakened by employing the “trickle down effect” theory. According to the trickle down effect theory, if the policies are made such that the top income earners are able to earn as much money as they can through government support, their wealth will flow down to the rest of society. Therefore the policies instituted in 1980s that benefit the small segment of the population of rich people, does not mean that the country has to be worse off. The jobs created through the investment in the country’s economy by the rich people will lead to prosperity for all. However, as Mills explains, the deindustrialization of the rich economies takes place so that the capitalists can cut costs by importing cheap foreign labor. So government’s help to the rich does not necessarily mean a reinvestment in the local or even nation economy to create jobs and increase wages. In the capitalist system, the corporations have no allegiance to their economy as long as they are able to generate maximum