The 1890s saw the height of the Victorian era, and the Gilded Age, as it was called, saw the rise of this country’s first generation of super-rich industrialists. The Carnegies, Rockefellers, Vanderbilts, and other barons of business of that era amassed vast, almost obscene quantities of wealth. The United States had never seen anything quite like it before. The gaudy excesses of the accumulation of such wealth was embodied in lavish mansions in New York, Chicago, Newport, and other centers of industry and playgrounds of the rich.
Cleveland’s proclamation was in some ways an effort to appease the masses, to give credit to workers for being a part of the rise of the industrial age in this country, even if they weren’t sharing in much of the fruits of their labor. But, the appeasement didn’t really work, and the country was rife with labor unrest through much of the 1890s and into the 20th century. By the beginning of World War I, the country had seen the rise of labor unions and reformers begin to take on dismantling the system that rewarded the wealthy at the expense of the working class.
There’s more than a bit of irony that as we prepare to celebrate Labor Day now, 120 years later, many of the same problems that plagued workers then have manifested themselves again in the United States.
Some of those problems have boiled over, as manifested by the Occupy movement, which gained world-wide notoriety by its actions, but also focused attention on the widening gap between the ultra rich in this country and everyone else.
There has also been continuing reports in the national media about that gap. Reports in various media have chronicled the huge disparity on income not just between the top 1% of wealth accumulators in this country, but of the incredible amounts of money earned by the top 0.1% compared to the rest of the 99.9%
The rise of the middle class is, in many ways, what built this country. With a strong middle class, people had disposable income for the first time, and they spent that income on cars, houses, vacations, and leisure items. That feeling of security and income stability is what allowed this country to grow so rapidly after World War II, and created what for many became “The American Dream.”
If the rise of the middle class is what built modern American, then its demise may be what tears it apart.
Some rich people recognize the disparity. Warren Buffet and Bill Gates both received a lot of notoriety for taking the “Giving Pledge” and promising to leave half their fortunes to charitable causes. Those are noble vows, help raise awareness among their peers that fortunes are not necessarily meant to be hoarded.
But there are broader, systemic problems that need to be addressed. The current economic system has become rigged over the past three decades to allow for accumulation of wealth at the top. What began as the promise of “trickle-down” economics hasn’t really worked out well for the working men and women of this country. Of course, it’s been wildly successful for the upper 1% and created a disparity in income unseen in this country for more than a century.
Many economists and entrepreneurs realize the value of having a robust, successful middle class. The warnings are now coming not just from the 99%, but from the top tier as well.
We don’t necessarily want to encourage a Robin Hood mentality and take from the rich to give to the poor. We’ll leave that to government. But, we do encourage businesses, and especially the large banks and brokerage firms that control so much of the capital in this country, to step away from the trough for a while, and free up some of the billions they have stashed away. What’s needed more than anything in this country right now is access to capital. Not just for the big guys, or even the middle sized businesses. We’re talking about for the individual and the micro-business. Those are the things that truly built this country, and one of the big things holding back the economy today. We’re not talking about the cheap, easy, risky credit doled out to consumers in the heyday of the mid 2000s. No, we mean easier access to mortgages at low interest, affordable rates for student loans, and businesses that invest not just in technology but in people.
We not economists, but we do know that Main Street hasn’t enjoyed the same boom that Wall Street has during the past few years. Until that happens, this economic gap in this country will continue to widen. Unless that gap begins to close, Labor Day may become a quaint tradition, but will have little meaning left to those left on the bottom of the divide.