America is Becoming a Third World Nation

America is Regressing Into a Developing Nation for Most People

America is Regressing into a Developing Nation for Most People

By Lynn Parramore

APR 20, 2017 | INCOME & WEALTH | EMPLOYMENT & JOB STRUCTURE |HUMAN CAPITAL AND ECONOMIC OPPORTUNITY | DEVELOPMENT ECONOMICS | GOVERNANCE |INSTITUTIONS, POLICY & POLITICS

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A new book by economist Peter Temin finds that the U.S. is no longer one country, but dividing into two separate economic and political worlds

You’ve probably heard the news that the celebrated post-WW II beating heart of America known as the middle class has gone from “burdened,” to “squeezed” to “dying.”  But you might have heard less about what exactly is emerging in its place.

In a new book, The Vanishing Middle Class: Prejudice and Power in a Dual Economy, Peter Temin, Professor
Emeritus of Economics at MIT, draws a portrait of the new reality in a way that is frighteningly, indelibly clear:  America is not one country anymore. It is becoming two, each with vastly different resources, expectations, and fates.

Two roads diverged

In one of these countries live members of what Temin calls the “FTE sector” (named for finance, technology, and electronics, the industries which largely support its growth). These are the 20 percent of Americans who enjoy college educations, have good jobs, and sleep soundly knowing that they have not only enough money to meet life’s challenges, but also social networks to bolster their success. They grow up with parents who read books to them, tutors to help with homework, and plenty of stimulating things to do and places to go. They travel in planes and drive new cars. The citizens of this country see economic growth all around them and exciting possibilities for the future. They make plans, influence policies, and count themselves as lucky to be Americans.

The FTE citizens rarely visit the country where the other 80 percent of Americans live: the low-wage sector. Here, the world of possibility is shrinking, often dramatically. People are burdened with debt and anxious about their insecure jobs if they have a job at all. Many of them are getting sicker and dying younger than they used to. They get around by crumbling public transport and cars they have trouble paying for. Family life is uncertain here; people often don’t partner for the long-term even when they have children. If they go to college, they finance it by going heavily into debt. They are not thinking about the future; they are focused on surviving the present. The world in which they reside is very different from the one they were taught to believe in. While members of the first country act, these people are acted upon.

The two sectors, notes Temin, have entirely distinct financial systems, residential situations, and educational opportunities. Quite different things happen when they get sick, or when they interact with the law. They move independently of each other. Only one path exists by which the citizens of the low-wage country can enter the affluent one, and that path is fraught with obstacles. Most have no way out.

I'm considering a photography project, for fun and maybe a social message. I like taking pictures of abandoned houses and old buildings. There's a lot of them around here. Maybe I will post some here, soon. I don't own a fancy camera but sometimes get some good ones out of my basic digital camera. We have an inner city neighborhood of once where once very beautiful Victorian mansions have gone to ruin. Artistically I could sum up a lot about changes in America, that go beyond the ever-present abandoned mall ruins. The shacks behind Aldis would make interesting pictures. I am concerned though for those who live in these areas, things are worsening for them. Poverty can be relative. If you got a roof over your head, there's many that don't. While I have kept a mostly decent apartment, many are living in very sub-standard housing. There's levels of poverty that can go pretty deep. I am growing alarmed at some what I am seeing happen to others, friends priced out of apartments living in towns where they want 1300 a month even for studios, facing near homelessness, people going without medical care, it has made me count some fortunes, and my own near misses in life.

My immediate neighborhood is middle class and one I could be priced out of very soon, but the abandoned houses that surrounded me in my old small rural town, are popping up like mushrooms all over this area now. It gives me a weird queasy feeling because watching your town die can be traumatizing and it already happened to me once. I keep track of news from my old home even 10 years later and many were forced out like us, heroin use and despair has skyrocketed along with the crime rate in a used to be peaceful rural town.

 America is definitely one place where economic and demographic separation has happened. Living on the rich side of town, "poor land" is only 2 miles and bridge crossing away. Since this is a smaller area, the rich here aren't isolated from the growing desolation that surrounds their neighborhoods but I have been in some richer places and suburbs, where you can almost imagine the 1980s are still in full swing with full bustling malls and big box stores, but those areas are getting smaller in number.

I was at the library yesterday, and took the bus there, I had to wait an hour and half for the Dial A Ride to show up. One can tell more people need the bus. We have kept our old car still running so for the way home, I had my husband just pick me up. I ran into someone I know and we talked about different issues of how in our town there is a huge class divide, between the rich and the poor and that there isn't much in the middle anymore. With my past faux family and with other people I have seen in "rich land", where they own new cars, go on vacations, and go shopping for fun, life is completely different. My brother when I was in contact with him, had no problem laying down hundreds or thousands of dollars on gambling over night hotel trips, Christmas presents and getting a new car every few years. With my mother, she had the vacation homes, trips and 50,000 dollar automobiles. I spoke of visiting "rich land" when discussing narcissists and money in this article. 

The suburban well-heeled people here eat out and have their fancy new cars. This world is a world I see everyday but it is not one I live in. I don't blame the nice ones, I would eat out too and get a nice car if I had money for one. Some wealthier friends have told me, they see some of these trends going on, they wonder why American cities seem to be crumbling so fast, and now many rural and smaller towns.  I live in the low-wage poverty world.  It operates differently. It has occurred to me the "out of touchness" of the some of the more wealthy, middle class and above has grown. Among the Republican wealthier set, their disgust for the poor has grown. Their churches have told them poverty is the result of immorality, lack of hard work, and lack of education. So even now as the numbers of the poor grow, I suppose the top 20% are still keeping the pastors in their new cars and nice homes, so no one is discussing what is going on.   They do not understand how we live or how we have to. In a far more technocratic society, many are being left behind.

 It is interesting to me that this economist, says the "rich side" of life is at or around 20 percent, because recently I told someone, I thought the rich vs poor ratio in America was 20 percent rich with 80 percent poor. We have this thin silver of very wealthy and then a "professional class" that has been able to hold on to some vestiges of wealth. In my local area, the divide between Baby Boomers with far more wealth, those around 60 and above, and the poverty of Gen X and millennials is extreme. That said, we have some very poor Baby Boomers and other elderly people. One thing I have noticed is the level of home ownership is far higher among older people while people of my age, it is far lower. I believe society is breaking apart. I have met others, where while they did not come from toxic abusive narcissistic families where economic chasms have formed within families.

My newer friend and I talked about this giant class divide yesterday. I told her, there is a wide chasm between both worlds, the understanding is breaking down, some assume and judge. She told me she has tired of some wealthier people telling her all the poor are at fault for their lot.  When Temin points out that the two live in two very different groups he is very correct. One thing I have noticed is how all news reports, and most articles are written for the 20 percent. I wonder what happens in a country where 80% of the population is written off and all policy and planning is done not even thinking of their needs?  It is good to see an economist addressing these matters. Yes, America is becoming a third world nation.