Middle Class in Post World War II America (Free Essay Sample)

Understanding the market mechanism is the first step in ending the vicious loop. The idea of a "free market" independent of government has served as a convenient cover for those who do not want the market's mechanism fully disclosed. They take use of mythology because it hides their strength (Reich 85). "A fuller understanding of what has happened to the middle class requires an examination of changes in the organization of the market” (Reich 118). After World War II, productivity increased, and workers' compensation followed behind. Inflation-adjusted median household income ceased increasing in the early 1980s. In the 1970s, the social contract between employer and employee began to break down, and it has now completely disintegrated. The corporate system's concept has evolved over time, as has the way the market has been reorganized. Furthermore, the middle class in the United States has gotten poorer.

To begin, we must evaluate the fundamental shift in corporate property rights, as well as the reorganization of the market. “If the corporation system is to survive- that the “control” of the great corporations should develop into a purely neutral technocracy, balancing a variety of claims by various groups in the community and assigning each a portion of the income stream on the basis of public policy rather than private cupidity. Rather than personal selfishness, balancing a range of community demands and allocating a percentage of the financial flow to each group depending on their requirements grows into a completely neutral bureaucracy of public policy. To establish fair norms, the government modified the way Wall Street was built by not taxing the middle class since the middle class grew tremendously from world war II. Because the huge firms were still making money, this made the middle class poorer in order to keep the stock market going up by not taxing them. According to the book The Modern Corporation and Private Property, America's megacorporations were not even answerable to their own stockholders yet nonetheless ran their businesses. By the end of World War II, the "management job" had gained widespread acceptance. In the 1950’s Pulp and Zellerbach stated to Times magazine “the majority of Americans supported private enterprise, not as a god given right but as the best practical means of conducting business in a free society… they regard business management as stewardship, and they expect it to operate the economy as a public trust for the benefit of all people” (Pulp and Zellerbach 120) but many businesses have decided to abandon this way of thinking. Many large corporations had expedited their collapse by the end of the decade, as their attitudes toward organized labor had hardened. Fear of communism and socialism has forced businesses to seek out more positive dynamics, resulting in a demanding and demanding corporate culture in the world of business. 

Moving forward In 1974, insurance companies were authorized to invest their assets in the stock market, creating a vast pool of rivals for Wall Street. “All this made it possible for corporate raiders to get the capital and the regulatory approvals necessary to mount unfriendly takeovers. During the whole of 1970’s there had been only 13 hostile takeovers of companies valued at $1 billion or more. Congress gave savings and loan banks the bedrocks of local home mortgage markets permission to invest their deposits in a wide range of financial products” (Reich 121). This relates to the belief that the wealthy become wealthier while the middle class becomes poorer due to a lack of long-term investment opportunities. As a result, since they become the owners of the stocks, shareholders are now the sole lawful proprietors of a firm. Reich continues by stating “since all nations' markets reflect political decisions about how they should be organized, as a practical matter “free trade” agreements entail complex negotiations about how different market systems are to be integrated” (Reich 124). This shows how CEOs were compelled to enhance shareholder profitability because of fear of being targeted, despite the fact that no raids were conducted. 

Consequently, high levels of unemployment have contributed to the willingness of workers to settle for lower wages. “During the Clinton administration the rate of unemployment became so low that hourly workers gained enough bargaining power to get higher wages, the first and only period of sustained wage growth among hourly workers since the late 1970’s” (Reich 124).However, Wall Street requires lower salaries in order to produce greater influence and bigger profits for shareholders, lowering the middle class's status. The middle class continues to decline, which favors Wall Street in the short term but not in the long run. The entire concept of "free market" and "free trade" mainly favors those who are already affluent, such as people who own large firms and hire employees who only increase their salary by a small amount to keep their income expanding as inflation rises. Lower wages need to be prominent in order for large corporations because when the market tanks so do the benefits for the employers. Because minimum wage creates a barrier for firms and investors concerned about the immediate future, employment is outsourced to lower-wage markets. Corporations including Walmart and big fast food chains have tried to abolish union regulations, alleging that permitting a union workplace puts companies at danger of losing money or revenue.  “The labor of humans is not a commodity or article of commerce,” a quote from the antitrust laws of 1914 attempts to ban unions (Reich 128). People are upset by these beliefs, particularly in light of the low income received by minimum wage workers. But, given how much money these major firms make, not having a union workforce isn't a big concern to the authority they wield, thus any lawsuits or unlawful activities are dismissed as a waste of time.

All in all the middle class has quickly turned into the poor working class after world war II. The shareholders of a firm are now considered as the sole legal owners of a corporation, government controls have been relaxed, employment has been outsourced to lower pay markets, and unions have become a danger to large corporations. As Reich stated, "a fuller understanding of what has happened to the middle class requires an examination of changes in the organization of the market” (Reich 118). If the government's organization and laws remain unchanged, the poor will only become poorer, while the affluent will gain richer.