ABSTRACT

Approximately one hundred million Americans, one-third of the U.S. population, are poor or nearly poor.1 Trend lines today point to a gap in take-home income and living income that is both deepening and being experienced by more Americans. Growing poverty in the United States runs counter to the 150-year trend of continually rising real wages for [white] workers between 1820 and 1970 (Wolff, 2012). As a result, about six successive generations could count on rising incomes and upward social mobility, both intra-generationally and inter-generationally. The growing individual prosperity was linked with economic nationalism (Patterson, 2013). Nineteenth-century America was a land of nearly sequestered agriculturally based communities. By the mid-twentieth century it transformed into an organically linked and complex industrial economy. This phenomenon provided a source of wealth production for robber-barons and upward mobility for individual workers and their families. That model of economic nationalism-which, to paraphrase General Motors’ Roger Smith, exemplified the concept “what’s good for American industry is automatically good for American workers”—is over (Mizruchi, 2013; Robinson, 2004). Mizruchi, who writes from the perspective of traditional business literature, and Robinson, from the critical transnational capitalist school, arrive at much the same conclusion about how “American corporations” are no longer able to serve the interests of American labor and civil society. Rising inequality and the attendant rise in poverty in America are the partial result of the transformation from economic nationalism to economic transnationalism. The U.S. state that managed to simultaneously serve the interests of capital and labor up to the 1970s has lost that capacity as the U.S. state is now being absorbed into a more complex institutional structure that increasingly serves the needs of transnational capital, often at the expense of labor (Robinson, 2004). During the lifetime of Rudolf Hilferding (2006)—the late 1870s to early 1940s author of the classic Finance Capital-national capitalism required state assistance to dominate international markets, whereas today’s transnational capitalism requires the state to dominate national economic interests. The transformation between these two eras of capitalism is contributing to growing levels of inequality and poverty. We, the authors of this chapter, will leave it to others to delve deeper into the analysis of the data concerning inequality and poverty in America. Our research shows that some scholars

have discussed, and others, no doubt, will continue to discuss, the dissection of data on historical trends as well as the dissection of data on how various social groups (based, for example, on factors such as racial/ethnic, gender, geographic, age, and origin of birth) are faring in this age of growing socioeconomic inequality. Similarly, some scholars have documented, through micro-level studies, the ways in which inequality is played out in the lives of individuals, families, communities, and specific social groups. Coverage of those areas of inequality and poverty in America is comprehensively presented in other chapters of this handbook and also in other scholarly publications. What we have attempted to do in this chapter is to distill the universe of factors contributing to this unprecedented and sustained rise in social inequality and poverty as well as to the termination of broad upward social mobility in America; thus, our goal is to better understand causes of these trends and recommend plausible solutions. The factors covered in this chapter are: financialization and transnationalization of the economy (Robinson and Harris, 2000; Tomaskovic-Devey and Lin, 2011), automation of production (Brynjolfsson and McAfee, 2011; Ford, 2009), deindustrialization of America (Wilson, 1996), deunionization of the workforce (Western and Rosenfeld, 2011), democratization of global higher education (Brown et al., 2011), and racialization of people of color (Martinot, 2010).