Free B005HFI0X2 EBOK by Michael Lind

the middle class and the poor, who would have spent the money on goods and services generated in the productive economy.
    The maldistribution of income is a global problem, not just an American one. While debt-led growth replaced wage-led growth in the United States in the 1990s and 2000s, on the other side of the Pacific investment-led growth replaced wage-led growth in China and other East Asian mercantilist nations. If every country tries to minimize wage costs, then global aggregate demand will be artificially suppressed, to the detriment of most of the world’s people.
    THE NEXT AMERICAN MIDDLE CLASS
    In a Fourth Republic of the United States that emerges from the wreckage of the Great Recession and its aftermath, a new American System should be complemented by a strategy for building the next American middle class.
    The middle class in America, outside of the South, has always been in part a creation of economic engineering by means of laws and public policies. The first American middle class consisted of white yeoman farmers, who benefited from land reforms like fee-simple land sales and the abolition of primogeniture and entail, the banning of slavery from the northern states and territories, the Homestead Act that allowed farm families to purchase farms with their labor, and infrastructure projects sponsored by local, state, and federal governments that connected farmers with national and global markets.
    The second American middle class was based on white male factory workers. Among the measures that sought to ensure married men would earn a breadwinner’s wage so they could support a homemaker wife and children were wages-and-hours regulations, government support for labor unions, and policies to create tighter labor markets by limiting immigration and removing convicts, children, and women from the labor force.
    The third middle class was based in the service sector after World War II. Its members were office workers, a group that increasingly included women. Access to this new, suburban, service-sector middle class was enlarged first by compulsory public high schools and then by expansion of public colleges and universities and financial aid for higher education, including the G.I. Bill, student loans, and Pell Grants.
    The fact that middle classes are made in part by enlightened public policy is illustrated by the contrast between the South and the rest of the nation. While independent yeoman farmers formed a majority in the North in the first half of the nineteenth century, in the South poor white farmers were squeezed between a tiny oligarchy of rich planters and the slaves they exploited. In northern factories, despite employer resistance, unions made gains, particularly during the New Deal and World War II. But the one-party South used law and intimidation to prevent unions from taking root in a region whose elites viewed themselves as employers or brokers of poor black, white, and Latino workers deprived of bargaining power. As a result, in the twenty-first century, many southern states have levels of inequality, poverty, and illiteracy similar to those of developing countries.
    SERVICE-SECTOR FORDISM
    The combination of automation and offshoring has destroyed many routine clerical and lower-level managerial jobs. With the disappearance of middle-skill jobs, the American job market has become polarized between highly paid managerial and professional jobs and poorly paid jobs in the service sector. Most of the job growth in the early 2000s has occurred in three areas: health, education, and government. According to the Bureau of Labor Statistics, health care accounts for seven out of the twenty fastest-growing occupations, more than any other category. Home health aides and personal and home-care aides are found both among the fastest-growing job categories and among the occupations with the largest overall job openings in the years ahead.
    What is driving this growth? The US health-care industry is plagued