Tom Tomorrow

Struggling with the inexplicable


I approached Paul Krugman's essay in the Sunday Times Magazine, "The End of the Middle Class," with some eagerness, and on one level it did not disappoint, providing an abundance of statistics and analysis to underscore the obvious--yet perversely disputed--reality of increasing income inequality in current-day America.


Krugman's basic thesis is that the decades from the thirties to the seventies, roughly, comprised a sort of economic golden age during which income levels in this country achieved some degree of parity. But see if you can spot the unacknowledged 900 pound gorilla in the middle of Krugman's analysis:


Some -- by no means all -- economists trying to understand growing inequality have begun to take seriously a hypothesis that would have been considered irredeemably fuzzy-minded not long ago. This view stresses the role of social norms in setting limits to inequality. According to this view, the New Deal had a more profound impact on American society than even its most ardent admirers have suggested: it imposed norms of relative equality in pay that persisted for more than 30 years, creating the broadly middle-class society we came to take for granted. But those norms began to unravel in the 1970's and have done so at an accelerating pace.


Hmmm…so the gap between the rich and the poor decreased during the middle of the last century…how can we explain this puzzling phenomenon? Is it the work of this mysterious deus ex machina to which Krugman refers, these vague "social norms" which somehow helped to set things straight during the span of time from the thirties to the seventies…?


…or, um, does it have anything to do with the fact that this time period coincides exactly with the rise and fall of organized labor?


It's a strange blind spot in an otherwise perceptive article, that the single most obvious factor responsible for an increased middle class standard of living is never even mentioned.

posted by Tom Tomorrow at 3:42 PM link