During the 1980’s, the income of the middle class reached its low point registering only a seventeen percent share in the total income of Americans. The lower class received almost sixteen percent while the upper class held a high share of sixty seven percent in the income pie. Among the factors that economists consider to have contributed to this societal change are the baby boom bulge in the work force and the public policies that were imposed prior to the 1980’s.
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The economic policies in the 1960’s and early 1970’s sponsored a downward redistribution of wealth, thus the rich became richer, the poor became poorer and the middle class, according to Ehrenreich, lost ground. This decline of the middle class, as a part of America’s social system, has increased the gap between the rich and the poor and created great inequality as there is no longer a middle ground that could provide the balance in the economy. Aside from these, the image of America as a generally middle class nation started to decline.
To address this problem, the government imposed several changes that would in a way uplift the middle class and help the poor. The system also proposed for lesser spending in the upper class. President Ronald Reagan introduced an upward redistribution of wealth that somehow ignited the two-tier society then prevalent. He introduced two major economic policies, the reduction of taxes for the better off and the reduced spending of the poor with the belief that these policies would bridge the gap of inequality among the Americans.
However, it was observed that the cause of having a two-tier society was not mere economical. More than problems in the economic system, the factor that contributed to the rise of this kind of policy is a social factor. It was cited in the reading that the American practices of marriage and divorce are among the social factors that affected the two-tier society even before the 1980’s.
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When a couple decides to divorce, the children remain in the custody of the wife, thus, there is greater pressure posed on her income as compared to her husband who gains more because the pressure to support the children and the family has already ceased. Marriage is also a contributing factor. Due to the change of marrying pattern, marriage is less likely to offer a chance to the women for an upward mobility. The men would prefer to marry someone who is of the same stature as to them.
Aside from these, the number of higher paying jobs has also decreased. Most of the jobs that were offered during the 70’s gave near poverty level wages. The 80’s and the 90’s created a period of explosive dynamism, however, this did not lead to an equitable distribution of benefits as this was experienced only by the upper class. The rich became richer and the poor became only became poorer because there were less higher paying jobs offered and if there are, the women also competed to avail themselves of it.
Aside from this, the taxation system also had a great effect as it reduced the tax of the rich but placed the burden on the poor who are already having difficulty meeting their daily sustainance. The minimum wage offered was also so low that the poor can hardly cope up with the pace of the upper class. Moreover, there was also a growing resistance from industries and a hostile National Labor Relations Board that the laborers were left helpless. All of these factors led to the non realization of equitable distribution of benefits and the enhancement of capitalism.