And the newest third-world country is….America! That’s right. America looks a lot more like a third-world nation than the wealthiest country in the world. As CJ Werleman points out over at Alternet, while America is the wealthiest nation in the world, and has the most billionaires in the world, not a single U.S. city ranks among the world’s most livable cities.
Meanwhile, despite our nation’s vast wealth, 14.5% of U.S. households were “food insecure” as of 2010, and as of 2011, 1.5 million American household were struggling with “extreme poverty.” If you want even more proof that America is in the steady decline to third-world status, take a look at the American middle-class today.
For over 30 years, under both Democratic and Republican leaders, we’ve been hooked on Reaganomics policies that have helped the wealthy elite and those at the top, but screwed over everyone else. Reaganomics has gutted the middle-class, and destroyed the strong and vibrant economy that we once had.
The income gap in America has widened exponentially since Reagan took office and implemented the so-called “Reagan Tax Cuts.” Between 1947 and 1980, income gains were shared fairly equally between the wealthiest Americans and everyone else. But then Reagan came to Washington and everything changed.
The wealthy elite began to take home more of our nation’s income gains, while income gains for everyone else began to stay relatively stagnant. In 1980, the top 1 percent of Americans controlled 10% of annual U.S. income. As of 2007, the top 1 percent controlled 23.5% of annual U.S. income; the highest it’s been since the Great Depression. Between 1979 and 2012, the percentage increase in salary growth for the median American worker was just 5%, while growth for millionaire and billionaire executives was off the charts. As result, the share of the nation’s income going to the middle-class has been in a near nosedive for the past three decades.
Similarly, since the Great Recession, nearly all of our nation’s economic growth has been eaten up by the wealthy elite. Incomes for the top 5 percent of American households were up just over 5% between 2010 and 2012, while those households at the bottom of the income bracket had losses in income during the same time. And, 95% of income gains during the first three years of the Great Recession recovery were taken in by the top 1 percent.
Meanwhile, as you might expect from these numbers, the American middle-class is no longer the richest in the world. An analysis done recently by The New York Times found that our neighbor to the north, Canada, actually has the wealthiest middle-class in the world, dethroning America after decades at the top of the list. And, estimates suggest that the Chinese middle-class is now larger than the entire population of the U.S.
Whether conservatives in Washington like it or not, the key to having a strong economy and a strong nation is having a strong middle class. It’s not just a coincidence that during a time when the American middle-class is the smallest it’s ever been our economy is also in the gutter. That’s because middle-class consumption is the demand engine that drives an economy.
Fortunately, while America might look more like a third-world nation today than a global power, there’s plenty of time to turn things around. And that starts by saying enough is enough to 33 years of failed Reaganomics, and putting in place the economic policies that will allow the middle-class to grow and thrive. From our trade policies to our tax policies to our labor policies and to the way that we handle big business and banksters, we need to roll back the Reagan Revolution.
Only then will we have a strong economy and a strong and developed nation.