First published at the Business Standard and posted here with Dr. Lal’s kind permission.
America’s upper and working classes have grown very far apart…
My first and lasting impression of America, echoed by numerous observers from the hierarchical societies of Europe and Asia, was the absence of class despite great inequalities of income and wealth. But today many see a class society emerging in America. An important book by Charles Murray, Coming Apart, delineates the causes of this changed cultural landscape.
To control for race and ethnicity, he examines the social trends for the non-Latino white population of prime-age adults between ages 30 and 49 (to control for changes in ages of marriage or retirement). He divides this population into two groups: a broad new upper class (who have at least a bachelor’s degree and are in professional or creative jobs), who he labels Belmont, and a new lower class (who have no more than a high-school diploma and are in blue-collar or low-skill service and white-collar jobs), who he labels Fishtown. About 20 per cent of the US white population aged 30-49 is in Belmont, and 30 per cent in Fishtown.
Since the 1960s, striking differences have emerged in the cultural norms of these groups relating to marriage, single parenthood, industriousness, crime and religiosity. In 1960 marriage was the norm in both groups – with 94 per cent married in Belmont and 84 per cent in Fishtown. There was a similar decline in these percentages in the 1970s, but in the 1980s a great divergence emerged. Marriages stabilised in Belmont – with 83 per cent in Belmont married, but a mere 48 per cent in Fishtown. A similar divergence emerged in non-marital births. In Belmont they rose marginally from one per cent in 1970 to six per cent in 2008, but in Fishtown they exploded from six per cent to 44 per cent. All the available evidence shows that, controlling for income and education of parents, children of unmarried women fare worse than children in divorced families, and far worse than those in families that remain intact.
These trends have little to do with the labour market, and the purported disappearance of a wage sufficient to raise a family. In 1960 the mean annual earnings of males in Fishtown were $33,302 (in 2010 dollars). In 2010 they were $36,966 (using the identical definitions of working-class occupations).
The famed US work ethic, which required every able-bodied male to be available for work, has been eroded in Fishtown, with the percentage out of the labour force steadily rising from three per cent in 1968 to 12 per cent in 2008, irrespective of the trade cycle; whereas, in Belmont, only three per cent are out of the labour force. Fishtown’s trend is due to the perverse incentives created by a growing welfare state (see Charles Murray’s book Losing Ground).
The violent crime rate, which rose nationally from the mid-1960s through the 1980s, remained flat in Belmont, but more than sextupled in Fishtown. Despite the fall in the national rate since the mid-1990s, it is still 4.7 times the rate in 1960.
Religiosity, which Alexis de Tocqueville saw as a defining feature of American culture, has also declined in both groups, but much more in Fishtown – the numbers of irreligious rose from 29 per cent in 1970 to 40 per cent in 2006-10 in Belmont, and from 38 per cent to 59 per cent in Fishtown.
This divergence in cultural norms between the two groups is mirrored in their different lifestyles and is accentuated by assortative mating, with children of the elite intermarrying. With the importance today of brains rather than brawn in determining incomes, the upper middle class is perpetuating itself, with many third generations being brought up with the values and tastes, and higher incomes in professional jobs, of their grandparents. Mr Murray argues that there is little that public policy can now do to reverse these trends, and that the only way to restore the famed "American way of life" is for the upper classes not to condone the behaviour of the underclass but hold it to the same standards and values they apply to their own.
The second measure Mr Murray commends is ending the spatial segregation with the elite residing in wealthy areas, which, for their postcodes, he calls "super-ZIPs". Though also present in the 1960s, they were not uniformly wealthy. The median family income in 14 super-ZIPs in 1960 was only $84,000 (in 2012 dollars), and only 26 per cent of their inhabitants had college degrees. By 2000 their median family income had doubled to $163,000 and 67 per cent had college degrees. Mr Murray recommends that members of the elite should relocate and participate in the unique American way of life, where, as noted by Alexis de Tocqueville , "the more opulent citizens take great care not to stand aloof from the people. On the contrary, they constantly keep on easy terms with the lower classes: they listen to them, they speak to them every day".
In another important, more optimistic book, The Next Hundred Million: America in 2050, Joel Kotkin recognises the residential polarisation that has occurred. But he argues that a new model of urbanisation pioneered by the sprawl of Los Angeles is replacing the old urbanisation model of a city epitomised by the previously aspirational cities of New York and Chicago, with their concentration of cultural activities in a downtown centre where the upper middle classes lived, surrounded by areas of the middle and working classes, which provided the requisite services.
But these old cities have now become "luxury cities", as dubbed by New York Mayor Michael Bloomberg. The well-educated, wealthy and nomadic denizens of these super cities buy critical amenities – such as child care and open space – in the private market. But, with their high cost of living, they no longer provide the upward mobility and a home for the middle class, which has moved further out to the periphery.
In Manhattan, the elite group is supplemented by a constantly rotating, nomadic population of younger, often highly educated people who come to the city for school or for the early part of their careers, later moving – along with many of the aspiring new immigrants – to the growing number of sprawling cities in the Sun Belt and the Rust Belt. These are multipolar: a disbursed collection of suburban villages with more than one job centre, and a multiplicity of occupations, linked by the car and the growth of the internet, which allows people to work increasingly from home. They provide what the American Dream has been about: "a good job, a decent school, proximity to relatives, a safe neighbourhood", and the features of suburbia – trees and open spaces, a "low-key shopping street, a place for a spacious apartment, a townhome, or even a single-family residence." They are likely to maintain the American civic culture, in an emerging multiracial and multiethnic environment that will allow a continuing pursuit of the American Dream.
ABOUT Deepak Lal: James S. Coleman Professor Emeritus of International Development Studies at the University of California at Los Angeles, professor emeritus of political economy at University College London, and a senior fellow at the Cato Institute. He was a member of the Indian Foreign Service (1963-66) and has served as a consultant to the Indian Planning Commission, the World Bank, the Organization for Economic Cooperation and Development, various UN agencies, South Korea, and Sri Lanka. From 1984 to 1987 he was research administrator at the World Bank. Lal is the author of a number of books, including The Poverty of Development Economics; The Hindu Equilibrium; Against Dirigisme; The Political Economy of Poverty, Equity and Growth; Unintended Consequences: The Impact of Factor Endowments, Culture, and Politics on Long-Run Economic Performance; and Reviving the Invisible Hand: The Case for Classical Liberalism in the 21st Century.