To Stay Right in the Middle
Without question, the growth of “diversity” has been the trend for a long time in the U.S. The question was never really whether the population was diverse, but was and remains one of how that demographic diversity has been used and positioned, politically, economically as well as geographically.
A report entitled, “An Equity Profile of the Kansas City Region” begins with a rationale typical of social imperatives with an underlying economic agenda. Its preamble begins:
“…communities of color are driving the region’s population growth, making their economic inclusion essential to the region’s success. While the region demonstrates overall economic strength and resilience, wide racial gaps in income, health, and opportunity – coupled with declining wages, a shrinking middle class, and rising inequality – place its economic future at risk.”
That opening paragraph is a “mash up” of stats not necessarily correlated or even interdependent, but often grouped together in ways that make for interesting Diversity & Inclusion discussions, and for D&I initiatives with predictable outcomes.
Based on that preamble, Kansas City Region’s economy is doing just fine “overall.” But the economic pattern from a cultural perspective seems to be similar to the economic pattern around the nation. The concise preamble covers a lot of ground. Within the context of Diversity, Inclusion and Equity, let’s kick around the roles of Diversiphiles and Diversiphobes in this discussion of the economic aspects and realities of:
a) “net” overall economic strength,
b) demographic shifts,
c) economic trends,
d) impact on the middle economic class, and
e) the net economic future.
First, the middle class is in decline. No doubt about it. The “shrinking middle class, and rising inequality” isn’t merely about our economic future. It is also the ghost of economics past, its roots, and what’s called a “deep structure” that will not go away with culture change. In fact, that deep structure has proven completely immune to culture change.
Business owners and professionals were once the primary equivalent of ‘middle class’ up until the Great Depression, although that strata was small enough to have evaded being named as an economic “class” until after WWII. America’s was the world’s first “middle class,” born out of post-WWII government policies for ex-military. The middle class was fairly exclusive when it was created. Minorities weren’t to be in it much at all until the latter half of that century, and only then in small numbers. So, increase of color in the American demographic may in time change the color of the middle class somewhat, to whatever extent it may still exist. But middle class color is only indirectly related to the economic viability of, or to the proportion of a middle class overall. Let’s play with the math in the discussion of Diversiphiles and Diversiphobes in the economy.
Though economic theoreticians would argue the possibility of infinite GDP expansion, the global reality has been that any nation’s GDP is pretty much a finite number, or at least a rigid number in the short term, give or take two or three points. Of course, any nation’s GDP is determined by more than just the decisions made within its own borders. How much flexibility is there in the U.S. GDP?
The expansion of the U.S. GDP has averaged 3.2% annually since 1947. Not surprisingly, since 2008 it has averaged only a 1.03% annual increase. Coupled with an annual population growth rate of slightly less than 1%, that’s flat enough to call it finite, i.e., flat, for the purposes of this discussion.
In any finite system, near zero growth, in order to increase any new group’s participation in GDP, another group’s contribution will have to decrease. Without the ability to expand GDP at a rate that matches a given cultural demographic’s growth and entry, efforts to increase participation quickly devolve to a cultural struggle. One can easily see how the Diversiphile vs. Diversiphobe construct plays into who participates in the growth and who doesn’t, or who hasn’t.
Enter the Kansas City region, with overall economic strength, but finite or flat economic growth, and new cultural minorities lining up to get into the middle, and you’ve got the perfect storm for pie-chart socio-cultural metrics, tactical programs and economic strategies that can lead to only one thing…conflict.
But by the same token, the overall “net” economic strength of a nation (or a region) is a higher level issue than the size of the gap between one group or another. The GDP measurement is a “gross-net” measure. Gross refers to the total and Net refers to the part(s) of the total that really matters. It’s not merely about who produces, although that matters to some. It’s only about how industry groupings (sectors) produce and contribute in their totality.
It’s the difference between knowing and understanding what game is being played on what field as opposed to worrying about who is playing individually or who isn’t, and their singular stats.
When we confound those two issues, we get a witticism like that of James Bovard’s, Civil Libertarian, who quipped, “Democracy must be something more than two wolves and a sheep voting on what to have for dinner.” (1994) Bovard’s quip was clear on the political vs. social vs. economic issues involving the consumers vs. the consumed.
The reality is that capitalism isn’t the same thing as democracy. Democracy is about equal participation, which is fine, because participation is free…sort of. Capitalism has always been about increasing “the gap” between participants…and maximizing the gap is THE game as far as capitalists are concerned. Even socialism isn’t about eliminating the gap…it’s more about narrowing it just enough to keep social order, and mitigating the effects of the gap while sustaining it. Communism or communalism, on the other hand, is more about suppressing the gap, equalization. That turned out to be no fun at all, a real buzz killer in the last century.
The initial design of the American “middle class” was more like socialism. Capitalism, in love with the “gap,” bears neither inherent design nor desire for a middle anything. Which is why the middle class had to be created by government fiat. It wouldn’t have happened otherwise.
So, do the math. If the government created the middle class through policy, then government policy also must be its source of sustainability, growth, or plan for its repeal If the government is a democracy, i.e., majority rule, then who would you guess is going to end up being in the middle class, if it survives at all?
We’ll talk about class shrinkage in a minute. But here’s the trend of middle class demographic change (shift) over the last twenty years, with the “who plays” highlighted by a diversity backdrop.
America’s Middle Class
1991-2011 — %Change
The 5% delta in Hispanic middle class juxtaposed with the 10% decline in “white” middle class seems eye-popping. Though the U.S. population growth over the same period was slightly less than 1% per year on average, the Wall Street Journal of March 25, 2011 reported, “The Census Bureau—in its first nationwide demographic tally from the 2010 headcount—said…the U.S. Hispanic population surged 43%, rising to 50.5 million in 2010 from 35.3 million in 2000. Latinos now constitute 16% of the nation’s total population of 308.7 million.”
The question of ‘who gets to play the game’ gets even more interesting The Wall Street Journal points out that of the “16.3% of people who identified as Hispanic or Latino of any race, 63.7% identified as white; 12.2% identified as black; 4.7% as Asian; and 0.7% as American Indians or Alaska Natives.”
The middle class demographic is going to remain an overwhelmingly white majority for a while yet, despite dropping from 80% to 70% of the middle class total composition over that same period. “White” was bolstered a smidgen by Hispanic whites. Still, what we see in the numbers is the percentage of non-Hispanic middle class whites eroding as the percentage of middle class minorities is increasing, while the total middle class is shrinking. Just remember – “middle class” doesn’t mean “white.” It means dollars, no matter who has them.
The social imperatives, a.k.a., the economic push and pull of social engineering, means that for every action, there will be an equal and opposite reaction. Within the social domain of diversity, we are looking at economic competition between two very different national imperatives, and they may actually be anything but social.
Diversiphiles are creating and operating programs to culturally diversify the familial ranks of the middle class while Diversiphobes want to culturally defend and solidify the household numbers (families) they have brought into the middle class already – lock it in just as it is, no need to increase it — to sustain and secure their families’ financial futures in the face of economic erosion all around them. Have the middle class Diversiphobes then become racists or bigots because of that?
No, not necessarily, if you can subscribe at all to the idea of the economic driver rather than the ethnic driver as the basis for simply holding on to what they have, and keeping their class an economically undiluted “middle.” The side affect of working to hold their own is a rejection of forced entry by minorities, not because they are minorities, but because the middle class members simply don’t want their earnings or their culture diluted. They’re posting a “No Vacancy” sign on the road to the economic middle.
The Kansas City Region equity profile did indeed show a decline in the share of households within the middle class in the region over the past four decades. It doesn’t appear those household numbers declined because they were moving on up, becoming super wealthy. The Kansas City Middles are in economic decline as a class.
Diversiphiles may be promoting their national agenda in Kansas City, but it’s most assuredly not going to be the only national agenda. Just one of the visible ones. The “Underground Derailroad” imperative is pushing the other way.
From the Diversiphobe’s point of view, existing middle class families feel a moral obligation to hold their ground as the entire middle class shrinks even as the U.S. GDP continues to expand, increasing the wealth gap between the middle and the top. Objectively, from a CultureNeutral® view, that might be the case for any middle class member, no matter the race with which they identify. Diversity includes economic class, each having their distinctive cultural markings that transcend race. With ethnic diversities correlating to age, ethnicity and gender as well, the implications of a shrinking middle class is a complex socioeconomic cultural conflict, difficult to deconstruct.
In any case, there are those who see the existence of a sustainable middle class as an inalienable right, not just in Kansas City. On the other side of the economic teeter-totter, there are those “pragmatists” who see the middle class as little more than a social side affect of WWII with little hope for or reason to turn it into a permanent fixture in the American class system.
For now, you may have ask, if you were a member of that endangered middle class, watching the unfolding social initiatives designed to bolster new demographic participation in your own shrinking economic class that barely had room for you and your family, what would you do? Here’s the dilemma, expressed as a word problem:
– The U.S. population is demographically shifting at a far greater rate than it is increasing.
– The U.S. GDP is growing at a faster rate than the U.S. population.
– Income growth has stalled for all Americans.
– The U.S. middle class wealth is declining faster than everyone else’s.
– Middle class median net worth plummeted 40% to near 1983 levels between 2008 and 2010.
– It is statistically improbable one can move from the bottom economic rung to the top.
– The gap between rich and poor is increasing.
What are the middle class alternatives for positive action?
The math is simple. It shows that the rich are getting richer, and the poor are getting darker. So, if you were a member of the middle class of any race, would you want to hold on to your middle class status? Or would you want your family to be among the first to descend into poverty, even as others are being helped into the slot you are at risk of losing through well-funded social programs? What would you do?
The available options would be to seek ways to accomplish one of several things. The top three might be:
1. Derail any socioeconomic imperative that erodes your share of the middle, or
2. Seek ways to expand the GDP aimed at accommodating new demographics, or,
3. Support government programmatic mitigation of the economic affects of the wealth gap to keep the lower class happy enough to leave the middle class alone.
Now, you already know that the middle class appealing to the extremely wealthy for help is folly. They aren’t going to help you, and you probably wouldn’t either, if you were one of them — right?
But you don’t want to become part of what is referred to as ‘disconnected demographics,’ the end result of the social and cultural reality of the political and economic system in which we live and operate, do you. Remember the book/min-series called. “Roots?” This is an economic system founded on slave labor and wealthy owners. Only one of those two are gone, and the economic stratification of the other one remaining has become a set of socio-cultural demographics competing among themselves, each for their piece of a finite/limited economic pie. It is a dynamic of economically-driven cultural tectonics. Pure and simple, it is economic conflict translated into the form and appearance of multicultural initiatives.
I know. You knew that already. So, back to capitalism.
Capitalistic competition favors the expansion of the gap, as well as GDP expansion, and the two aren’t mutually exclusive. That gap is right where the artificially created and now wilting middle class lays. It has collectively realized that it is lashed to the economic rails in the middle of a cold, dark economic night. To the one rail, their feet are tied with the value of their dollar, which is tightening right along with everyone else’s. On the other rail, their hands are bound by their diminishing ability to grow their wealth, severely limited by their own diminishing means. They were never all that wealthy, really. With the rich obligated to keep getting richer, and the poor obligated to get richer if they can, the middle truly is a class bedeviled and besieged. Desperately struggling not to become poor, frustratingly incapable of becoming rich quickly enough, the middle class is hearing the approaching train whistle of recession, feeling the rumble of unemployment and seeing the oncoming headlight of withering government policies.
There’s a good chance that the 70% white middle class might not see “diversity and inclusion” as their primary problem right now. There is no strength in numbers when you don’t have enough to feed them all.
One thing is certain. “The data show unequivocally that fear is a far more dominant force than euphoria,” according to Justin Fox, Executive Editor, New York, of the Harvard Business Review Group. Diversiphiles have been engaged in euphoric celebration of diversity for almost a half century as of this date…and it still takes strategic social programs heavily funded by the wealthy foundations intent on pushing diversity over the fence into the middle class. On the other side, it is fear of loss that is pushing back, defending the economic middle class fence line from encroachment by the determined but poorly equipped legions of the poverty ridden.
Diversity issues aside, is the middle class doomed? Or, as it has miraculously done, will it somehow continue to hold its own? Can it be untied from the rails, find help and safety and growth from the Fed? Will Diversiphiles be its saving grace by means of the enchanting magic of Diversity and Inclusion? Or will diversity get into the middle class just before the lights go out? Will the middle class turn to the dark side, becoming Diversiphobes by default as they try to protect their assets and defend their class turf?
And the biggest question of all for the Corporate Diversity folk in Kansas City: The family-sustaining job ranks in Kansas City are obviously untouched by the Corporate Diversity initiatives that have no doubt been for years touting the Celebration of Diversity and Value for Differences in their companies. What happened?
You’ll find no answers to those questions here today. But history may give some hope. After all, from the standpoint of economic class, where were minorities a half century ago, and how well were they doing? But, look how far they’ve come today!
Well, okay. Maybe that’s not such an encouraging example. In any case, what we can offer right now are a few recommended readings below the line that may help you determine how the struggle between Diversiphiles® and Diversiphobes will play out in the fate of the American middle class.
Or, you can enjoy the discussion of Neutrality and Sustainable Commerce, a helpful hint about how to differentiate economic conflict from cultural conflict in your company, your community, or even your country. Enjoy!
Copyright © 2013 Robert D. Jones – All Rights Reserved
Borrowed From the InclusiveWorks® Blog
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Recommended Readings and References
Equity Profile of the Kansas City Region
GDP Data Source: http://www.tradingeconomics.com/united-states/gdp –
Trading Economics: US GDP Growth
GDP Data Source: http://www.tradingeconomics.com/united-states/gdp –
Trading Economics: US GDP Growth
Population Source: http://www.multpl.com/us-population-growth-rate/table/by-year
Trading Economics: GDP Growth by Year
U.S. Population Growth: http://www.indexmundi.com/g/g.aspx?c=us&v=24
U.S. Population Growth 2014: https://www.cia.gov/library/publications/the-world-factbook/fields/2002.html
U.S. Population Growth Trend: http://www.multpl.com/us-population-growth-rate/table/by-year
Where Middle Class Jobs are Vanishing the Fastest