Obama Makes Gains Among Workers Hurt By Bush Economics

Posted July 23, 2008 at 4:50pm

A new book designed to show Republicans how to win the working-class vote actually makes a strong case that Sen. Barack Obama (D-Ill.) will carry it.

[IMGCAP(1)]Much-discussed and deservedly praised, “Grand New Party” by Ross Douthat and Reihan Salam paints a grim picture of working-class prospects, both economically and socially, under prevailing circumstances.

Instead of being a society where anybody can “make it,” Douthat and Salam describe the United States as increasingly becoming an “inherited meritocracy” where the wealthy and well-educated get more so and those without education and skills get left behind and face a life of stress and insecurity.

They don’t say so directly, but I would: What Obama is offering — and eloquently — is hope for a better deal, while Republicans are offering more of the same. And, to the extent that Sen. John McCain (R-Ariz.) does offer new proposals, they tend to be small-bore or hard to grasp.

It may be true, as Douthat and Salam contend, that what Democrats propose amounts to a “European-style welfare state” that’s economically unsustainable, but McCain hasn’t been able to make that case, either.

The white working class is the classic “swing” constituency — Richard Nixon’s “silent majority,” Ronald Reagan’s “Reagan Democrats,” the group that gave victories to Bill Clinton and George W. Bush and has been dubbed “Sam’s Club voters” by Minnesota Gov. Tim Pawlenty.

Bush won white non-college-educated voters by 6 points in 2000 — losing the popular vote in the process — but won that group by 12 in 2004. Right now, according to a new Pew poll, McCain leads by just 6 — suggesting that Obama’s primary problems with white workers may be over.

In 2004, Republican Congressional candidates carried 51 percent of white workers’ votes. In 2006, it was 43 percent. And the economy has worsened since then. By Election Day, Obama could near a majority.

One fundamental fact cited by Douthat and Salam is this: “Over the last 25 years, most of America’s economic gains have been concentrated in the hands of those with four-year college degrees — and, over the past five years, in the hands of the top one percent, even the top 0.1 percent, of the income distribution.”

Moreover, in past economic cycles, when productivity increased, worker wages did too. But, no longer. “Since 2001,” they write, “real hourly pay for nonsupervisory workers has increased by a mere 3 percent, despite an 18 percent increase in economy-wide productivity.”

And probably more politically important than the economic realities are the insecurities that workers face — rising health insurance costs (and the chance of losing coverage), loss of pensions and loss of employment and income.

The authors cite data showing that the typical American family had a 7 percent chance of experiencing a 50 percent drop in income in a given year. That’s more than doubled, and the number of households filing for bankruptcy multiplied seven-fold from 1980 to 2005. The housing crisis has cratered home values, which many families borrowed upon.

“Wage pressures make two incomes a necessity for more and more couples,” the authors write, “but children are more likely to become discipline problems when both parents work long hours, and the stress caused by a heavy workload has also been found to exacerbate the rate of divorce.”

As the authors note, the sexual revolution that began in the 1960s has had a far more detrimental effect on the working class than the upper class. The out-of-wedlock birthrate among white workers is 25 percent, the same as it was among African-Americans in 1975, when future Sen. Daniel Patrick Moynihan (D-N.Y.) pronounced it a “crisis.” The divorce rate among non-college-educated workers is above 50 percent. For Ivy League graduates, it’s 10 percent.

One good thing that McCain did was to relieve former Sen. Phil Gramm (R-Texas) of his role as a top economic adviser. As the authors note, GOP pollster and Roll Call contributing writer David Winston found in 2007 surveys that workers resented being told that they didn’t appreciate how great the Bush economy was. Being told they’re “whiners” is the ultimate insult.

Digging himself out of that hole, what does McCain offer? If it looks to most workers as more Bush-style “trickle down” economics, they can hardly be blamed. The problem is, the fruits of tax-cutting have not been trickling down.

McCain offers “reformed unemployment insurance and worker retraining programs,” but he has yet to cast his economic program into anything that can be called an optimistic vision that workers can grasp on to.

The subtitle of their book is “How Republicans Can Win the Working Class and Save the American Dream,” and Douthat and Salam, editors at Atlantic Monthly, propose a bevy of ideas.

For instance, they recommend increasing the tax credit for children from $1,000 to $5,000, tuition credits for stay-at-home parents, a savings-encouraging progressive consumption tax — taxing the difference between earnings and savings — and a progressive payroll tax.

If this strikes you as redistributionist, it obviously is — a shadow version of the Obama agenda, which openly calls for increasing taxes for those making more than $250,000 a year and cutting taxes for the middle class. Obama also is offering huge new investments in education, college opportunities for everyone who qualifies, infrastructure and energy programs to increase domestic employment, and help for labor unions and universal health insurance.

Douthat and Salam say that this agenda will lead to a “Europeanized United States” with “higher taxes, vastly expanded public-sector employment, infantilized upper- middle-class men and women who live with their parents until their late thirties because their jobs don’t pay enough to buy a home, illegitimacy rising toward 50 percent, plunging birthrates as rearing children grows ever more expensive, and an ever-larger stream of immigrants imported to fill the breach.”

Maybe so. But my guess is that — unless McCain can make a better case for Republican economics than he has — working-class voters will opt for more government help than they’ve had.

As Obama says, Bush’s economic policies “have failed to create well-paying jobs or insure our workers, or help Americans afford the sky-rocketing cost of college — policies that have lowered the real income of the average American family, widened the gap between Wall Street and Main Street, and left our children with a mountain of debt.” The working class, like everybody else, wants a change.