We have seen real inflation adjusted after tax Middle Class incomes stagnate and go down since 1970....
Come on now. Make whatever plea you want, but do it without twisting the facts.
Middle class income essentially has remained flat, not decreased. That's stangnancy, not decline. Far from ideal, no question, but also not as bad as you're depicting it.
The marginal tax rates were notably higher in 1970 than they are and have been over the past decade.
- 1970
- $25K AGI - Married filing jointly --> 25% marginal rate
- $25K AGI - Single --> 50% marginal rate
- $50K AGI - Married filing jointly --> 50% marginal rate
- $50K AGI - Single --> 62% marginal rate
- 2013
- $50K AGI - Married filing jointly (MFJ) & Single (S) --> 15% (it's 15% from ~$18K up to $72.5K for MFJ, and for ~$9K up to $38.25 for S filers)
So how is it that anything can be considered a decline after taxes when the chunk of income taxes take, when adjusting for inflation wages have been flat and tax rates have decreased by anywhere from 10% to ~50%?
The most likely culprit, if there's going to be one, is that prices have risen faster than have wages, and indeed, one can check the CPI and see the purchasing power of the dollar has fallen.
The thing to be aware of, however, is that for as much as goods prices have outpaced labor prices (wages), things would be worse were we not to have policies in place that keep goods prices lower than they would be absent those very same policies. What I'm speaking of here is free trade, the very purpose of which is to keep goods prices low, and that is in fact what it does.
Now free trade increases competition among workers, thus doing what competition does...in the case of wages it increases the pressure for workers to either work more (harder, or longer or smarter, etc.) or exit the labor market segment in which they are unsatisfied with their wage and enter a different segment of the labor market, or join the ranks of the capitalists and buy labor instead of selling it, or apply a combination of those actions.
Some folks might respond, "Well, if one has a job doing X, and their wages hold steady in a climate of increasing prices, how are they supposed to have the means to make any of those changes?" I cannot deny that doing so is difficult, very difficult perhaps; however, I will ask in return, "Why was one part of that wage class to begin with?"
What am I getting at by asking that? Several things.
- First, individuals in some classes find themselves in those classes/positions due to forces above and beyond their individual ability to control. For example, women, who even now must as a class endure the "glass ceiling" and wages that are only ~79% of men's wages. No individual woman is going to be able to overcome that for the good of women in general, even if that given woman overcomes it for herself.
- Second, I have never come by a high performer from college or high school (3.5 GPA or higher) who doesn't "make it" to the extent that they are able to enjoy a comfortably middle class lifestyle.
- Third, having over the past decade helped my mentorees get admitted to the nation's top colleges and universities -- none of which are even close to what one might call "affordable," save for one who got admitted to a military academy -- I've discovered that high achieving kids who are abjectly poor nonetheless can get funded to go to first rate schools, and as long as they maintain their high performance, they're going to have awesome careers.
The set of observations from those experiences have led me to see that poverty isn't the problem, and that in turn suggests to me that if one doesn't come from pure poverty (U.S. style) and can perform highly enough to realize the American Dream, one has no business complaining if one didn't begin one's adult life on a very solid foundation of demonstrated skills and abilities that command higher prices in the labor market.
- Last, wage, labor and general economic trends are no secret. How much did it take in the 1970s to see calculators, quartz watches, etc. and not realize those things portended ever increasing automation of tasks and that one should plan one's career around the inevitability the coming of the Digital Age or the Age of Robots? Sure, some quantity of folks might not have noticed the clues, but a whole class of people not noticing? That's really asking for more willing suspension of disbelief than I have to give. I'm willing to be sympathetic to the circumstance of being behind the curve as go wages, but I'm not willing to have that emotion for why one finds themselves in that position as an adult when the "writing was on the wall" throughout their teen and young adult years.
It's
low wage workers who have seen their inflation adjusted after tax wages fall since 1979. (Sorry, I can't copy and paste the chart...also this source's figures for low wage and middle income workers only date to 1979. I realize you said since 1970.)
If you want to make the case that something be done to avert a generation's finding itself behind the curve, by all means do so. If you want to make the case from an ethical or moral standpoint, fine. Indeed, I'll likely "buy" the ethical argument so long as it's well developed for my ethical standards are somewhat high, so where there's truly an injustice, I'll rail against it 'till the cows come home. But trying to do so by presenting half truths or twisted facts just doesn't cut it, and that's entirely why I've responded as I have above.