What made the middle class begin to disappear?
I recall, decades ago, when unemployment was real low, businesses had no problems providing benefits, kids had no problem finding summer jobs during school breaks, homelessness was less than ¼ what it is today and over 80% of those were homeless by choice.
We called them 'Hobo's'. Medical bills were not outrageously high, lawyers did not sue the crap out of everyone for everything and many actually refused to take stupid cases. There were no food stamp programs that I knew of. Gas was roughly $0.25 a gallon and $1,999.00 got you a brand new economy car.
Heck, car insurance wasn't even mandatory! Insurance brokers used to beg for your business. Banks treated you like actual folks and bent over backwards to NOT charge you assorted fees. Chicken and pork were cheap meats. There were no beef shortages and you didn't have to take out a loan to buy a steak. Grocery stores cut off the 'hidden' fat pad on the bottom of packaged roasts before packaging them.
We had multimillionaires - not one ever dreamed anyone could actually become a billionaire and not in their wildest dreams did they ever expect billionaires to become the New Millionaires.
Then came the 80's and things changed. Yuppies appeared, with a greedy, get rich philosophy that involved doing so at all costs. You invested in companies that showed a high profit in a short time, ignoring those, which had for generations shown a good profit over decades. So, this forced a change in overall business principals - providing you wanted to stay in business.
That meant dumping older employes who had served you well for years, forcing them to take reduced retirement benefited, hiring on younger, less experienced employees who would do their job for less pay. Condensing your physical base meant laying off hundreds of folks and closing outlying offices and plants to generate a greater yearly profit.
Businesses also started shutting down local plants and opening up new ones in foreign lands where the workers were happy to make about 50% less in pay, you didn't have those pesky safety laws to contend with and many places gave you huge tax breaks just to get your business.
Then the Yuppies discovered hiring lawyers worked just as well as going up to someone and punching them in the face - only safer. You could sue someone for almost anything - because even if you didn't win, you could bankrupt them trying to defend themselves and win in a different way.
Lawyers became excellent at confusing issues and stretching the truth, applying delaying tactics and even major businesses found it cheaper to settle, even if in the right, than fight a lawsuit which would cost them a hideous amount of legal costs, far greater than any winnings.
Many shops, which used a rule of thumb for pricing goods, switched from a basic 25% over cost to 75% and later, to 100%. Making a profit by selling in volume took too long - especially when the technology arose allowing the average moron to start investing without a trained, seasoned broker.
Yuppies didn't want to work 25 years like their Dad's to make their millions or spend 14 hour days at their desks. They wanted their money before 35 while they were still young enough to have fun with it.
Which kind of explains why during the Great Gas Crisis, gas guzzling SUVs popped up and auto makers turned away from the push to make high mpg 'economy cars'. Then came the 8 or 10 mpg Civilian Hummer. BMWs became the Volkswagon of the newly well off.
To keep the new money in their circle, up popped 'high end' stores where a cuppa java would cost $5.00 instead of $0.50. Leather sandals would start at $50.00 instead of $10.00. Cotton shirts and clothing, previously for the working class, became too costly for them as synthetic blends appeared, but the Yuppie reveled in the artfully 'distressed' 'working man's' cotton clothing, artesionally spun to appear rough, with 'back to nature dull hues' and baggy appearances.
Then the ever present, tough, cheap yet durable 'sneaker' morphed into a designer shoe, going up from $10 to $200 and prompting kids from various levels of society to kill each other for them, especially if sponsored by a sports star.
Work shoes went from those nice, smooth leather things at maybe $50 to those ugly, clumpy forms with punched designs all over them starting at roughly $200 and made with 'prime leather'.
Wearing anything else at work was just not done! Especially if you were an executive.
Then, a portion of the enterprising folks found they could double the prices for their goods, mainly just because they could. However, lawsuits had begun to push medical costs up to outrageous levels and assorted companies discovered that people would pay nearly anything to get life saving medications and putting a dent in a new car no longer cost $200 to pop and fix, but $2000 to replace the fender.
Plus, technology made the shade tree mechanic no longer able to tune up a car for $30 bucks, but $300.
Eventually, your average worker found his adequate pay of years ago put him in the poor house. Since health costs had soared, businesses started dropping health benefits as their costs soared also. The 39 hour work week came in to cut out more benefits, like over time, company retirement programs and vacations.
Folks cut back on their spending, which caused businesses to cut back on their employees because if their yearly profit picture dropped a bit, yuppies dumped the stock and if they raised product prices in most areas, folks bought even less.
Banks started charging for everything except walking in their doors. Credit card companies flooded the mail with easily approved credit cards to increase the spending of the average folks - created a card dependent nation and tripled the interest rates.
Through all of the BS, the average consumer/worker, even with minimum wage increases, winds up basically 'running in place'. Everything goes up to compensate the businesses for the greater outlay in cash to pay employees, in order to keep the value of the stock the current Yuppies buy.
I might not have explained it real concisely, but I lived through it all and, in my lengthy employment history, watched it all happen.
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