Debunking the Myth of the Middle Class

CHRISTIANE AMANPOUR: Now, as tens of millions of Americans remain jobless, President Trump continues to claim that the economy has been the strongest ever on his watch. Well, our next guest disagrees. Jim Tankersley is an economics reporter who’s now written a book called “The Riches of This Land,” which tells the story of what happened to America’s middle class. Here he is talking to our Michel Martin about that and about why he thinks restricting immigration to boost wages is a myth.

MICHEL MARTIN: Thanks, Christiane. Jim Tankersley, welcome. Thank you for joining us.

JIM TANKERSLEY, AUTHOR, “THE RICHES OF THIS LAND”: Thank you so much for having me.

MARTIN: I want to talk about the book, obviously, because it’s a decade in the making. It ties together some of these really powerful trends in the economy that I think everybody has seen, but didn’t necessarily understand. And one of the fascinating arguments that you make in the book is that the president could have achieved the kind of remarkable economic growth, broad-based economic growth that he brags about. You say he actually didn’t, but he could have. Explain that, please.

TANKERSLEY: Well, I think we should start there with what the president promised and what he actually delivered. The president promised that he was going to have the economy growing at 4, 5, even 6 percent a year. He promised he was going to pay off the entire national debt in eight years. He promised he was going to bring millions of jobs back from China and Mexico. None of those things have happened. What the president did instead was preside over for three years the tail end of an economic expansion that he kept going with fiscal and monetary stimulus, and which produced very similar results to the second terms of George W. Bush or Barack Obama in terms of economic growth and employment growth. It just so happens that President Trump started in a much better position than either of those presidents had started. So, he did fine for three years, but he did not deliver the unprecedented performance that he said he would. The argument in the book, though, is that the president wasn’t really focused on what we know from American history is the secret formula to creating broad-based prosperity that lifts millions of people in the middle class. And that formula, which was played out in the aftermath of World War II and all the way through the 1970s, is that, if you seek to empower workers who have been shut out of opportunity in the American labor force, particularly women of all races and men of color and immigrants, if you seek to empower them, and break down the barriers of discrimination and structural barriers that hold them back in the economy, that unleashes them to work more, to produce more, to be more productive. And that creates the sort of sustainable growth with low unemployment that lifts millions of people in the middle class. The president wasn’t focused on that formula. A lot of his policies had gone in the other direction that. And so I think he’s missed an opportunity to repeat that success.

MARTIN: Your book makes some extremely powerful arguments. And you state them in no uncertain terms. I’ll just read from the very beginning. You say: “My reporting uncovered lies that have poisoned our national economic debate for decades, long before this latest recession, but which left us weak and vulnerable when the recession hit.” You say, in fact, that the real story of the middle class is not the story of elite white men doing elite white man things, but it’s the reality of the sort of remarkable expansion of the American middle class lies with groups, certain groups, women, people of color, black people in particular, and immigrants. So, talk about it. So, first, I want to ask to say, what is the lie that you say has been peddled all these years? And then, of course, I’m going to ask you to turn around and tell me, what’s the truth?

TANKERSLEY: Well, the great lie of the American economy — and, really, you can trace it all the way back to the founding of the republic and before — is the idea that, if you are a certain type of working-class American, your prosperity is most threatened by a different type of working-class American who doesn’t look like you. And, specifically, it’s a lie sold to white men, white working-class men, being told that women and men of color and immigrants are a threat. They’re stealing your job. They’re stealing your prosperity. They are making things worse for you. And we have seen it over decades, over centuries. And it is always elite white men, the people who run the country, which, in the founding of the country, that was a group largely just sort of white male landholders. Now that group sort of shorthands to elite white college graduate men. But they have used this idea of pitting groups of workers against each other to keep workers down and essentially keep the elites at the top of the economy. But the truth is the opposite. The truth is that, when distressed workers, workers who have been held back for a really long time, are allowed to get ahead, everyone benefits, including other working-class Americans. And so the way to say that in very blunt terms about today’s economy is, it would be better for struggling white male workers in Ohio or Michigan or Wisconsin, it would be better for them if we had more opportunity for immigrants, more opportunity for women, more opportunity for black Americans, because they would create themselves growth and job opportunities that would lift up those men who have been — rightly feel like they have been left behind in this economy.

MARTIN: You start with a fascinating story that I’m embarrassed to admit I never heard before about the tobacco workers in Winston-Salem, North Carolina, in 1943. These were women who worked at the R.J. Reynolds company. And just as briefly as you can, tell me what happened.

TANKERSLEY: It’s an amazing story. And I found it in oral histories that have been compiled by a researcher named Robert Korstad and his associates in North Carolina.And it’s amazing. So, it’s, we’re in the middle of the war. And black women essentially make the R.J. Reynolds tobacco factory run. And they have a very hard job of feeding tobacco — pull things out of boxes and feed it into a big machine. And they have very low pay and no breaks, other than to go to the bathroom and a little bit for lunch during the day. They don’t even get paid time off to have — like on the day they are due to give birth. And they are — there are many cases that the workers describe of women getting very sick and going to their supervisors and asking to go to the nurse or go home or whatever and being told, no, get back to work. And if you don’t get back to work, we will fire you. They point to the door and basically say, you will be out the door. So, on this sort of extraordinary day, these women are planning a labor action, and because of a woman’s experience of being told to go back to work, this single mom who is trying to provide for her family. And so the instigator of this all, Theodosia Simpson, gets her friends together. And they stop. They just — the machines are supposed to come back on after lunch, but they refuse to turn them on. And then, very quickly, all of the machines are shut down. And, pretty soon, the entire plant is offline. And now the management has to deal with these workers, who end up joining a union and bargaining for better wages and better benefits, which lift up not just those black women, but all of the workers at the plant, including white men.

MARTIN: Here’s the point that you make. The point that you make is, the black woman at this plant were the lowest paid, has some of the dirtiest jobs, the least desirable jobs. But when they put their lives on the line to organize, everybody’s benefits improved, the white men, the white women. Everybody who worked there achieved the benefit from this behavior, from this action on their part. OK, give us an example of why you say that the president — not just this administration, but let’s just focus on this administration, because they have had the wheel for three years — could have unleashed this boom that has not occurred. Are there certain things that he could have done that would have helped set these things to rights?

TANKERSLEY: The president talked, for example, at times about trying to do something about the child care crisis in our country, something that has been absolutely exacerbated by this pandemic. I think it is one of the most important areas of policy for unleashing women’s participation in the labor force. If we had more abundant, less expensive child care in this country, whether through government subsidies or deregulation or a combination of both, we would be able to solve in large part the issues that hold working mothers back in the work force. And we know from economic research that those losses are large. We have really talented women who essentially have to leave the work force to deal with the broken child care system in this country, not because they want to, but because they are forced to by economic circumstance. If he had made that an early on focus on policy, first off, there probably would have been a lot of bipartisan support for it. It’s an issue that pulls very well. But, second off, it would have freed up those workers to do much better. And I think the other area where — we have talked a little bit about this, but immigration policy is certainly an area where the president believes something that the economic research strongly disagrees with, which is that restricting immigration, the president believes, will boost everyone’s wages. The opposite it sure looks like is true in all the research that we have. And if he had made a concerted effort to let in a lot more particularly highly skilled entrepreneurial immigrants in the last three years, we’d have more companies being formed, all sorts of really positive developments for innovation and entrepreneurship that I think would have dramatically helped the economy.

MARTIN: The reality of it is that immigration in the last decade has included people from both groups. It’s included a lot of people who are not highly skilled, who are not highly educated, and as well as people who are highly skilled who come in through of a different pathway, OK? OK. But so the argument is that, if you bring in a lot of labor competition, why wouldn’t that suppress wages for the people who are already here, particularly people who are similarly situated, your less well-educated American citizens or your less well-educated immigrants of longer tenure? You’re saying that that’s not true?

TANKERSLEY: Well, I mean, look, I’m going to be certain about what the research says. There are some wage effects for a short term on particular groups, native- born Americans who didn’t finish high school, for example, small group, but a group that appears to be in competition with recent lower-skilled immigrants for jobs and sort of — and previous waves of immigrants also seem to have a little bit of a wage impact. But those are not large. But this is — I think the whole fallacy of the immigration debate is the idea that American workers are competing for a finite number of jobs. And that’s just not true. There’s not some set number of jobs in the United States. When immigrants come in, we see, they don’t just take jobs. They also spend money. They also start businesses. They are drivers of economic growth. And sort of think of it intuitively. If we just got rid of half the people in America right now and sent them to Canada, we don’t think the economy would go much better for all the workers who are left. So, it is — the idea that restricting the supply of immigrants is necessarily going to boost wages for the people who are here rests on the idea that there’s this finite pool of jobs, which just isn’t true. And it ignores those positive spillover effects, again, both in terms of demand and actually spending money, but also in terms of entrepreneurship, that immigrants of all skill levels bring to the United States.

MARTIN: The other argument that you make in the book — and it’s actually a very depressing one — you argue that failure to take racial discrimination seriously, even to this day, has had a devastating impact on the economic mobility of African-Americans. In fact, you cite one study conducted by a person who actually worked in the Trump administration that said that the economic mobility for black people is actually no better than it was in 1876, which is a really disturbing thing to contemplate. But how is that possible? Because, again, I know that maybe it sounds like a ridiculous question, but people say — it’s the classic, what about Oprah?

TANKERSLEY: Right.

MARTIN: What about Beyonce? So, tell me why that is. Why — how could that be true?

TANKERSLEY: Well, when we talk about economic mobility, we’re not talking about, what’s the nice way to put this, outstanding outliers. We are talking about averages. And so the question that this researcher Marianne Wanamaker at the University of Tennessee and a co-author were examining was, what is the likelihood that a black man — and they always study men because it’s easier in genealogical things over time to do that — that a black man can rise above the economic station, basically, of his father, born into a particular circumstance, and how does that compare with the mobility that white men experience over time? And what they find is that the economic mobility prospects for a typical black man have not changed since Reconstruction, which is just, like you said, wildly depressing. And there’s a lot wrapped up in that. And one thing that Marianne told me in an interview is that, even if they just had one — if we had one generation in America where black men experienced the same sort of odds of economic mobility that white men experience, that would have, like, completely narrowed the gap. That would have dramatically changed the picture. But it’s just not been the case. With every generation, there have been setbacks and this lack of progress. And so it remains sort of depressingly true today that it is very difficult for a young black man born into poverty, for example, to get ahead of where he was born, compared to how easy it is for a white man born into the same situation.

MARTIN: And why is that? Is that — what’s the primary driver of that?

TANKERSLEY: The research doesn’t exactly tease out all those factors. But I think we can say very safely that three things that really hold young black men and women back in America, and particularly men for these three things, in America today remain education, incarceration and discrimination. So, they’re typically not educated in schools that are of the same quality that white students experience. They face a much higher chance of being incarcerated for a long time. And that is a multidecade problem now in the United States, going back to the war on drugs in the 1980s. And then, when they do — even when they do get out, I mean, even for black men who go all the way through college and get a college degree, for — compared to a comparably educated white man, they still earn way less. And the same is true of black women compared to white women. It is just — so, there exists discrimination factors in the job market that transcend even those first two parts, all of which make it harder. And so the median black family’s wealth is like one-tenth of the median white family’s wealth right now.

MARTIN: Well, what about — where have the Democrats been in all of this? It’s not like they haven’t had any role in governance over the last decade, while these trends were taking hold that you have described. I mean, what’s been their role in this?

TANKERSLEY: Well, I mean, the Democrats — to be clear, my default position in the book is that no political party has effectively followed the strategy over the last several decades. In 2016, Hillary Clinton did try to run on a version of something related to this idea, her Stronger Together idea, trying to make the case that America was better off with people working together. But it wasn’t a very focused pitch, having covered it at the time. And she didn’t, I would say, articulate it in the way that she would have needed to, to really get through to people. But in terms of governance, I mean, for example, there have been policy errors under Democratic administrations that have accelerated some of these trends. The way in which the Clinton administration at the very end of Bill Clinton’s term entered into permanent normal trade relations with China was directly responsible for a couple of millions — a couple of million American jobs lost. And there’s an argument that a much more targeted, better approach to that, that would have compensated and helped the workers displaced by that move would have been dramatically better. But he didn’t do that. Barack Obama’s housing policy, and particularly for how to deal with borrowers who got stuck underwater on their mortgages coming out of 2008, they were very, very reluctant to intervene and help people out. And I think that really set back both the overall economic recovery and set back black families and Hispanic families and others who were who were left underwater. And they defend those policies to this day, but I was critical of them at the time, and I think that the research has shown that they were particularly bad for the types of trends we’re talking about. So, it’s not like Democrats are blameless here. But, certainly, President Obama tried to make addressing racial inequities part of at least his rhetorical appeal to the country. But what we see, after now 20 years of both Republican and Democratic presidents in the 21st century, is that there are still huge problems with racial and gender discrimination in the country. And I would argue that maybe it’s not a president’s job to solve all those, but that you do need presidential leadership to help.

MARTIN: Jim Tankersley, thank you so much for talking with us.

TANKERSLEY: Thank you.