There's a lot of talk these days about defending the middle class. Politicians of all stripes claim they are the champions of the middle class.. But everyone knows that the middle class is disappearing -- because the post World War II social contract has been broken. Tom Walkom writes in today's Toronto Star that:
More to the point, depression and war led to the unstated social compact of the Cold War: Government would allow unions to organize; corporate employers would let workers keep more of what they produced; unions would oppose Communism and maintain social peace.
The reasons for labour’s decline from the 1970s on are well known. Manufacturing has moved to low-wage countries. Non-manufacturing industries are harder to organize.
Neo-Conservatism has destroyed North America's manufacturing base and left workers with low paying service jobs. Politicians claim that they are creating jobs. Unfortunately, those jobs don't pay a living wage. And so, on this Labour Day, there will be little to celebrate. Now the politicians are taking on their own workers, insisting that austerity is the way to prosperity:
Governments haven’t yet figured out how to outsource their own employees to China so they are taking on unions by fiat — as Toronto city council did with its garbage workers and McGuinty is doing with teachers.
As unions disappear, so do well-paying, secure jobs. When labour is strong, even non union shops pay well — just to prevent themselves from being organized. When labour is weak, that pressure evaporates. As unions disappear, so does the middle class.
And when the middle class collapses, economies collapse. The folks in the middle simply do not have the money to buy the goods and services which business produces. And, until what is left of the middle class -- and those in the lower class -- rise in anger, the downward spiral will continue.