Minimum Wage should be Raised

It is certainly not an overstatement to assert that the U.S. President and almost all Americans are concerned and discussing about the gradually disappearing middle class. In fact, the dilemma of the middle class in the U.S., particularly its weakening economic and political power and shrinking population, is indeed one of the most alarming developments in America’s contemporary history (Greenberg et al. 106).

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Fundamentally, income is merely one aspect of this recent pattern. The expense of being a middle class, especially of sustaining a middle-class lifestyle, is increasing rapidly as well. For basic necessities like health care and child care, expenses have increased considerably over the recent decades, consuming bigger portions of household budgets (Samuel 86). In other words, the middle class is being pressed. The middle class in the U.S. is threatened, and these threats came before the 2008 economic recession and the depression that ensued. As an outcome of large-scale policy and economic reforms over the recent decades, the conventional paths into the middle class have become more exclusive and restricted, and security and stability for the middle class have weakened over time.

Numerous jobs offer disproportionately lower wages that cannot even cover all the necessary living expenses (Sitaraman 243). Such economic setback for the American middle class consequently led to the weakening of their political influence, as they are unable to financially contribute to elections and other important political activities.

Loss of Economic Power

In recent times, economic experts have warned about a continuing regression in the economic wealth of the American middle class. Secured, well-paying jobs are decreasing. Wage rates have hardly coped with costs of living. Americans’ savings dropped, their borrowing increased, and they reach bankruptcy more frequently than several decades ago.

The standing of the American middle class is believed to be withering towards a blue-collar, working-class status (Cohen 181). Although certain economic indicators generally signify stable progress, a more thorough assessment uncovers an image of a dwindling middle class and expanding income inequality. Recently, the huge economic recession, a dramatic rise in unemployment, the crumbling of the house market, and a weak recovery have pressed the U.S. middle class (Greenberg et al. 106-7). As revealed in a national survey conducted by the Pew Research Center in 2012, a vast majority of the U.S. middle class admit that it is harder nowadays than a decade ago for middle-class households to sustain their standard of living (Pew Research Center 20).

In fact, a larger number of American families comprises the middle class than four decades ago, but they constitute a lesser portion of total wealth. According to the latest government data review by the Pew Research Center, in 2015, there were 51 million adults in upper-class families and 70.3 million in lower-class households versus 120.8 million in middle-class families (Fottrell para 1).

Yet, the percentage of income comprised by middle-class households has nosedived. Over the past decade, the average earnings of the richest American families rose at 2.7 times the level of growth for low-income households and 1.5. times the rate of income increase of the middle class (Comen para 2). Moderately as an outcome, the earnings of the U.S. upper-class rose from approximately 50% percent to roughly 52% of the total national income from 2007 to 2016. At the same time, the income of middle-class families dropped from 14.7% to 14.3% of the total earnings (Comen para 2-3).

These figures reveal that the discrepancies in the growth of earnings among these income groups have been much wider, and the reduction in the share of middle-class earnings much bigger in the recent decade. In fact, the continuing shrinkage of the U.S. middle class has ensued progressively since the 1970s. Each decade has culminated with a reduced number of adults in middle-class families, and no particular decade was characterized as the trigger or boost of the weakening of the middle class (Fergus 172-3; Temin 20-23).

The past decade has been especially severe for the middle class. The average income of middle-class families in 2014 was 4 percent less compared to that in 2000. Moreover, their average wealth or net worth dropped from 2001 to 2013 by 28 percent, partly because of the Great Recession and housing market collapse in 2008 (Fottrell para 3). Clearly, the decline of the middle class has been a progressive, not a one-time, occurrence. In a nutshell, after decades of being the predominant economic group in the U.S., the middle class is now equaled in size by the upper and lower classes.

The condition of the middle class in the U.S. is at the core of the economic policies of numerous presidential contenders prior to the election of 2016 (Sitaraman 246). Legislators are involved in discussions about the urgency of raising the base on wages and on the most effective strategies to reduce income disparity. Obama made use of the expression ‘middle-class economics’ to define the economic platform he pursued (Sitaraman 108; Fergus 186). In essence, a bigger middle class remains desirable due to its considerable potential to advance the economy of numerous advanced nations.

Loss of Political Power

The book Capital in the Twenty-First Century by Thomas Piketty, a French economist, presented an ominous image of capitalism for the middle class in the U.S. To the American middle class and workers overwhelmed by increasing taxes and immobile wages, it offers explanation for the threatening solution of exorbitant taxes on the rich pushed by liberal lawmakers and experts (Piketty 313). Exploring a broad array of information across numerous nations, Piketty aims at illustrating that over time capitalist countries normally channel ever larger portions of income and wealth to a small elite population, continuously reducing the resources allocated for the wages of the working class (Piketty 326-7).

In other words, a constant and widening wealth disparity limits the chances of the middle class to sustain their standard of living and remain politically relevant. Organized labor has historically served a crucial function in making sure that middle-class workers obtain a bigger portion of the economy’s wealth. Unions haggle cooperatively for bigger compensations and benefit packages for affiliated workers. However, unions also boost wages for non-affiliated workers (Greenberg et al. 287-8).

In fact, unions considerably increase wages for non-union workers besides their own members by persuading non-union companies to increase compensations so as to prevent unionization, by petitioning for public laws that increase wages, and by advocating for fair pay policies (Cohen 93). Simply put, increased unionization pushes up the portion of economic wealth being channeled to the working class instead of to the highest payees or business returns. Nevertheless, the number of Americans with union membership has dropped gradually, declining by 44% from 1983 to 2012. At present, a mere 7% of employees at the private sector are union members (Traub and McGhee para 66).

One cause of union weakening is the heightening resistance of companies to unionization and the undermining of policies designed to safeguard the workers’ right to organize. Presently, the institution intended to protect the workers’ rights to form unions does not work anymore. Sluggish and incompetent implementation of labor rights enables companies to habitually infringe the law, hounding and intimidating workers who try to form unions (Temin 20). This waning power to organize further reduces the political influence of the American middle class.

There are findings revealing that the American middle class is besieged and that upward mobility is evasive for numerous U.S. citizens. In the meantime, more and more findings are also disclosing that the American political structure is progressively governed by the interests of the rich and powerful, and solid, two-party majorities of the American public think the system is moving against the average electorate. Nevertheless, what is inadequately grasped is the interaction between these two issues and how a widening wealth and income gap leads to reduced opportunities for American middle and lower classes (Greenberg et al. 324).

Such bending of political affairs towards the wealthy and powerful elite has weakened economic mobility for the middle class all together. While the interests and wellbeing of the privileged few have heightened its impact on public policymaking, with increasingly bigger amounts of monetary resources influencing elections and the course of policymaking, the American political system has sapped its capability to respond to those pursuing better lives and upper mobility. This is partly due to the fact that elitist interests are intensely centered on issues not shared by the American middle class and generally prohibited laws that would facilitate upward mobility among the middle and lower class, like increasing the minimum wage (Piketty 390).

In other words, such disparities in policy inclination by the different social classes result in irregularities in American policymaking specifically because the wealthy are excessively represented among the electorate, campaign contributors, media authorities, lobbyist, and other groups with enormous political power. American middle-class and working citizens are more vulnerable to the marginalizing and oppressive impact of the voter registration’s unnecessarily bureaucratic character, a process which results in roughly 50 million qualified Americans not able to register as voters (Traub and McGhee para 72).

The middle class is even less expected to become donors for political electioneers. Such imbalanced political influence deforms how elected legislators represent the concrete policy opinions of American citizens, given the large numbers of average Americans supporting laws that would build new opportunities for the middle class. For instance, in spite of the major function a solid minimum wage serves in the improvement of upward mobility, American legislators have permitted the wage to drop progressively over the recent decades (Traub and McGhee para 72-74; Fergus 164).

Such political inequality worsens the dilemma of elected lawmakers being obliged to cater to the interests of the affluent campaign donors. What Should Be Done to Improve the Condition of the Middle Class? (335) Creating a stronger American middle class demands several major policies.

First is to employ tax laws to reinforce and enlarge the middle class. Quite frequently, the tax laws of a country strengthen the affluent instead of helping American citizens struggling to become a part of the middle class. A tax structure that is more liberal could lessen inequality and heighten economic mobility. For instance, the Child Tax Credit and the Earned Income Tax Credit, which bring advantages to the working class, must be strengthened (Cohen 26-28).

Therefore, in order to curb the allocation of massive wealth to the already rich and powerful and help the middle and lower classes achieve upward mobility, the current tax system must be rid of its loopholes.

Second is to boost workers’ influence in the workplace. For the past four decades, an increasing portion of national wealth has been channeled to corporate profits while the share being channeled to workers’ wage has declined. This change has considerably sped up in the past decade.

In order to counteract the pattern, workers have to gain greater power and influence in the workplace (Samuel 153). Middle- and low-income workers must be strengthened by increasing the minimum wage and making sure that employee safeguards and guarantees are effectively enforced and applied to all. Simultaneously, undermined labor policies must be reformed so that American workers can enjoy their right to form unions and bargain for wage and benefit packages that will give them the opportunity to belong to the middle class.

In order to attain and maintain these reforms, the U.S. government should also restrict the impact of money on the political system. One effective means of reducing the lopsided influence of the rich on the policymaking process is to build a procedure for financially supporting election campaigns that is compatible with the notion of equal voting influence. There must be restrictions on the sum that affluent people can donate and invest in elections and other political activities. Huge corporations and wealthy individuals have no natural right to overpower the influence of the middle and lower classes.

After reforming constitutional laws, states and Congress must strictly control spending and contributions to make sure that everyone has an equal opportunity to influence political outcomes.

Conclusions

The economic and political fortunes of the American middle class appear to be declining because of two definite causes: their economic status is becoming more and more unstable and insecure, and their political influence is continuously being drowned out by the capability of the wealthy to contribute to political activities, like elections. Work is becoming riskier for the middle class.

Their income has become more unstable. Having insufficient budget is an especially major issue for the middle class today because it can threaten their access to employment prospects, education, and healthcare.

The difficult economic periods of the past decades have aggravated the long accruing difficulties confronting the middle class in the U.S. It is more difficult to find a good job in the midst of increased rates of unemployment. The new jobs that are available in the U.S. pay low wages and have reduced benefits. The set of public policy decisions contributed to this prevailing situation for the middle class, such as tax laws that unduly brought gains to the rich, allowing the minimum wage to remain stationary, permitting the disproportionate financial contribution of the wealthy to political activities, and so on.

Therefore, major public policy reforms are required to achieve interconnected objectives: to make sure that all American citizens have an opportunity to become part of the middle class and to guarantee better stability for this dwindling socioeconomic group.

Works Cited

  1. Cohen, Joseph Nathan. Financial Crisis in American Households: The Basic Expenses that Bankrupt the Middle Class. ABC-CLIO, 2017.
  2. Comen, Evan. “Economic Disparity: 10 States Where the Middle Class is Being Left Behind.” USA Today, https://www.usatoday.com/story/money/economy/2018/03/01/economic-disparity-10-states-where-middle-class-being-left-behind/378376002/. Accessed 12 July 2018.
  3. Fergus, Devin. Land of the Fee: Hidden Costs and the Decline of the American Middle Class. Oxford University Press, 2018.
  4. Fottrell, Quentin. “America’s Middle Class Has Lost Nearly 30% of Wealth.” Market Watch, https://www.marketwatch.com/story/americas-middle-class-has-lost-nearly-30-of-wealth-2015-12-09. Accessed 12 July 2018.
  5. Greenberg, Edward, Benjamin Page, David Doherty, Scott Minkoff, and Josh Ryan. The Struggle for Democracy. Pearson, 2018.
  6. Pew Research Center. “The Lost Decade of the Middle Class.” Social and Demographic Trends, 2012, pp. 1-133.
  7. Picketty, Thomas. Capital in the Twenty-First Century. Harvard University Press, 2017.
  8. Traub, Amy and Heather McGhee. “State of the American Dream: Economic Policy and the Future of the Middle Class.” Demos, http://www.demos.org/publication/state-american-dream-economic-policy-and-future-middle-class. Accessed 12 July 2018.
  9. Samuel, Lawrence. The American Middle Class: A Cultural History. Routledge, 2013.
  10. Sitaraman, Ganesh. The Crisis of the Middle-Class Constitution: Why Economic Inequality Threatens our Republic. Knopf Doubleday Publishing Group, 2017.
  11. Temin, Peter. The Vanishing Middle Class: Prejudice and Power in a Dual Economy. MIT Press, 2017.
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