Does Obama’s Plan for the Middle Class Fall Short?

Like every State of the Union address since he took office, the bulk of President Obama's speech last week was devoted to the economic quagmire. This speech was different because it emphasized bolstering the American middle class as a whole, not just job creation—but the President's plan, as laid out in his speech, isn't likely to accomplish this goal.

“A growing economy that creates good, middle-class jobs—that must be the North Star that guides our efforts,” Obama said.

The president listed some strategies: Public-private partnerships to educate young workers in a way that corporations want; investments in science and technology research; still more public-private partnerships to improve infrastructure (a model invented by an Australian bank for private gain); greater tax breaks for companies that offer Americans jobs; and raising the minimum wage by 2015. 

Notably absent was any mention of labor unions—whose organizing helped create the middle class by insisting that workers get a bigger chunk of corporate profits—and any indication that big business, even when bribed, might not have the best interests of Americans at heart.

Government-business collusion may create some jobs, but there's little incentive for these new jobs to be the good, middle-class jobs of the president's hopes. Those kinds of jobs used to be good because organizations of workers fought and defeated corporate power to get them. Once, young blue-collar workers without a college degree could earn a decent living with benefits; today, even college graduates are likely to be stuck in low-paying, non-unionized retail or service jobs that don't require a degree.

Chained to crumbling manufacturing industries, strangled by obstructionist legislation, and bloated from decades of clinging to institutionalized power, unions have lost much of their strength. With this weakness has come a decline in real wages across most of America—even before the global economic crisis hit—at the same time as rapid deindustrialization has left swathes of factory towns to rust.

Many deindustrialized cities have already attempted to jump-start local economies with their own versions of Obama's proposals. Rust-belt Pennsylvania attracted big-box retailers with tax-free Keystone Opportunity Zones, called "the number one economic development strategy in the nation." But these service jobs offered none of the hard-won benefits of the old mining careers, sucked money out of local economies and city budgets, and have proven impossible to hold accountable or even evaluate for effectiveness.

As for the proposed minimum wage increase, the Center for Economic and Policy Research crunched the numbers and found that one parent working with a $9/hour full-time job still left a four-person family below the poverty line.

What Obama missed in his address is that 121 percent of income gains in the last three years have gone to the top 1 percent not by unhappy accident, but by design. As Industrial Workers of the World founder and radical unionist “Big Bill” Haywood used to say, “If one man has a dollar he didn't work for, some other man worked for a dollar he didn't get.” In the post-union, mass-unemployment era, big corporations—mandated by law to maximize profit—have no reason to pay workers more than a pittance, or to hire more workers when they can squeeze their employees dry.

Income inequality is just a symptom of the true crisis: An inequality of power. As long as Obama's plan involves giving corporations a tailor-made workforce and government subsidies, with no attempts at economic democracy or breaking the corporate stranglehold in Washington, it will fail at rebuilding the middle class. But it will succeed in allowing corporate interests to reshape our educational system, profit from our decaying infrastructure, and take advantage of tax-free zones to add to their bottom lines.

Shay O'Reilly is a reporter with Campus Progress. Follow him on Twitter @shaygabriel.

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