6 ms·

Globalization did not hollow out the American middle class

65 points by alihm 1y ago

mensetmanusman 1y ago
Globalization played a role but so did bad policy. When the Obama administration didn’t respond to China dumping below-cost solar on the US, I know many technologists who lost their job and career in the US because they couldn’t compete with companies that didn’t have to follow environmental protection rules. Americans are addicted to artificially low prices that put the burden of costs on future generations who have to clean up a huge mess.
- robotcapital 1y ago
  The article's point isn't that globalization (or policy) didn't play a role, it's that the premise of middle class downfall is false to begin with. See the section under the header "The American middle class was never hollowed out".
  - FuriouslyAdrift 1y ago
    The middle class of the 1980s/1990s are the poor of today... the middle class of today are different people (and probably would have been upper class professionals in the past)
    - dullcrisp 1y ago
      Well we’re all different people, which is why they’re looking at median incomes. Unless the problem is that these are different people?
      - FuriouslyAdrift 1y ago
        Those people who used to be middle class didn't just die off. There still here, a large demographic of the United States, and still very very angry. Our current political situation should make that obvious.
- smt88 1y ago
  What exact job title was lost in the US because of Chinese solar manufacturing and mining? By your logic, Tesla (equally dependent on Chinese pollution and mining) wouldn't employ any technologists.
  - daniel_reetz 1y ago
    I've purchased equipment from scrapped solar factories in the Bay Area. Tons of people lost jobs and not just technologists.
    - smt88 1y ago
      And I've purchased solar from people who only had jobs because of cheap Chinese panels. Someone in the US still has to market, sell, install, finance, and maintain the panels. Your anecdote isn't interesting by itself, and I was asking specifically about the silly claim made about technologists.
- mystified5016 1y ago
  You act as if it's an active, deliberate choice to only buy the cheapest possible thing. The hollowing out of the middle class means most Americans are forcibly dependent on the cheapest possible goods because they don't have disposable income. It's a vicious cycle and the average consumer is not at fault. Most people would like to buy domestically, but domestic goods are either simply not available or not affordable.
  - seec 1y ago
    I strongly disagree. I have experienced many very well-off people (middle class+) who consistently choose cheap crap because they refuse to think about their choices in any other ways than maximisation of their benefits (at a surface level). Poor people are not necessarily the ones to make those choices. In fact, sometimes you find out that they are actually poorer than they would be if they would optimise their choices for their own financial benefits. If you look at who's buying expensive local food at your farmer's market it's unlikely to be dominated by rich people. If you go to some discount supermarket, you will most likely find a lot more well-off people, proportionally. Lidl is a supermarket chain that has terrible consequences, from treating their own employees badly to putting extreme pressure on the suppliers and its whole reason for existing is cheaper prices. Their biggest customer demographic is rich boomer.
- owebmaster 1y ago
  > When the Obama administration didn’t respond to China dumping below-cost solar on the US What should other countries do against VC tech dumping?
  - mensetmanusman 1y ago
    Whatever they want, it’s their country.
- jordanb 1y ago
  Globalization was a policy! There was always this doublespeak that came to trade deals where they say "globalization is inevitable and uncontrollable and therefore we must make these trade deals to facilitate and guide it to be good." Of course if it's an inevitable force of nature then it does not need to be facilitated by nor can it be controlled by trade deals. There's no enabling legislation for gravity.
blueflow 1y ago
This article is standing out because it is about American politics and yet didn't make me want to throw up. Whatever this author is doing different is worth copying.
CurtHagenlocher 1y ago
The first comment asks the important question: Why, "despite all of this prosperity, do so many Americans still feel angry, disillusioned and frankly, even cheated"? One thing which can't be captured by these numbers (no matter how accurate) is when people end up settling for something perceived to be of lower value. So for instance, it might be that my income has gone up faster than the cost of the things I'm buying, but I'd rather buy a house (out of reach) than buy rent.
- idle_zealot 1y ago
  > One thing which can't be captured by these numbers (no matter how accurate) is when people end up settling for something perceived to be of lower value This is always going to happen so long as wealth inequality isn't addressed.
micromacrofoot 1y ago
and re-industrialization won't save it we can't possibly compete with (much) cheaper overseas labor, tariffs will do nothing but exclude the US from this cheap labor while other countries continue to benefit from it eventually more of it will be automated anyway, and areas that saw booms from cheap labor will face similar class crises there's also this idea that maybe our standard of living needs to regress some ("2 dolls instead of 30"), but you're insane if you believe that this can happen without significant strife and political upheavals... we're already at a point where many young americans feel as though they'll never be able to buy a house the only "clean" path I can see out of this is some form of universal basic income, which likely has many problems to figure out, but at least doesn't treat humans like fuel for operating machinery
- hparadiz 1y ago
  I recently was looking at a 4 speaker switch on monoprice. It was $20 two months ago. Now it's $40. It occurred to me that the parts in this speaker switch amounted to be $2 of raw parts. The simplest of plastic pieces with basic copper wires and metal screws. Yet they were shipping it here and forcing American consumers to pay $20 in taxes instead of possibly claiming an almost $36 profit margin by paying $2 of taxes on raw parts and assembling it here. Now I know it hasn't been long enough but these are the types of opportunities that are now available in the economy. If an assembling plant is there then that creates opportunities downstream to in-source even the raw parts too. Anyway that's just been where my mind goes about these things recently. I generally support free markets.
  - watwut 1y ago
    > Yet they were shipping it here and forcing American consumers to pay $20 in taxes instead of possibly claiming an almost $36 profit margin by paying $2 of taxes on raw parts and assembling it here You assume that salary of people involved in putting the speaker together (or more likely robotic automatization) would amount to 2$ per speaker?
    - hparadiz 1y ago
msandford 1y ago
I find this kind of article hilarious. "Numbers go up! You're not allowed to feel poor or think that there's a problem! Our number is bigger so you must be rich!" I saw this 10-20 years ago when economists were telling people that inflation is low despite their feelings about inflation. "Our math is correct and you ignorant folks should be grateful for how this economy is managed." Just because you can produce equations like physicists doesn't mean it's the same field. Ground truth in economics is just as much people as it is anything else.
- gotohelldang 1y ago
  [flagged]
- ceejayoz 1y ago
  Do you consider it impossible for propaganda to impact public perception?
- wat10000 1y ago
  That goes both ways, though. Just because you feel a certain way doesn't mean that's how it is. A lot of people's perceptions of economic performance are more connected to their opinion of the President than to any actual facts. How people feel matters, of course, but that doesn't mean that the numbers are wrong if they don't match. People's feelings about inflation are not ground truth about inflation, just ground truth about feelings.
  - wormlord 1y ago
    [flagged]
    - wat10000 1y ago
      And the conservative "intelligentsia" point at people and say "it's the graphs which are wrong" to the point of rejecting basic medicine and sabotaging the economy because people feel aggrieved. I'm not happy with either one but at least the liberal one is connected to reality in some fashion.
MaxPock 1y ago
Globalization made America very very rich just that the wealth was not shared with the Americans
- FuriouslyAdrift 1y ago
  The finance sector and those that primarily hold capital got rich... everyone else, not so much. Basically, we mortgaged our future for cash today.
  - moribvndvs 1y ago
    The _real_ American dream. Not building something sustainable, but something more akin to a smash and grab.
ReptileMan 1y ago
Cheap labor is a drug. And the west one way or another got hooked on it. But it should be the opposite - labor should be relatively expensive or we will never innovate or automate things.
FuriouslyAdrift 1y ago
From someone who lived through the first wave of disruptions (agriculture going to Mexico and auto manufacturing getting disrupted by Japan/moving to Canada/Mexico) in the 1980s/1990s (earlier agreements with Canada then NAFTA), then the second disruption (textiles, light industrial, then everything going to China) in the 2000s (China most favored nation status and WTO) in a heavy industrial/ag state (Indiana) and seeing everyone they knew get wiped out over those 15-20 years... I can say the sentiment comes from the people who USED to be middle class that are no longer. The people who are middle class today are rarely the same people.
fooblaster 1y ago
I wish the author would have done the due diligence of questioning why his data might not have the full story. - Looking at income without looking at working hours can mask the fact that working more hours looks like income growth at the expense of quality of life. - where is this money going? Housing spending apparently has not grown, but are these same workers building equity or renting? - what amount of income is spent on healthcare vs 50 years ago? - Other quality of life factors? What are low income workers actually getting with their increased wages? - Is the way with which we characterize inflation giving an incomplete picture of the experience of all income classes (the rich and the poor don't buy the same things, and prices don't shift evenly)
- gruez 1y ago
  >- Looking at income without looking at working hours can mask the fact that working more hours looks like income growth at the expense of quality of life. hours worked has gone down in the US in the past few decades, not up.
yesfitz 1y ago
What bothers me about using GDP and Wages as a denominator or a measure of progress is that it ignores the impact of things becoming more expensive (except for inflation adjustments). In fact, if we paid more for everything except imports, GDP would grow and it would look like we weren't importing as much. If we paid less for imports over the years, and then used them to generate a lot more money (e.g. a computer), it would look like imports were of shrinking importance. With wages, the OECD definition of "Disposable Household Income"[2] is all income minus taxes, mandatory contributions, and interest on loans. So what isn't excluded? Rent. Childcare. Healthcare. Things that have dramatically increased in price (and also increased GDP). We can measure everything in dollars, but that doesn't mean that the goods and services represented by those dollars are fungible. 1: Table 3 of https://www.bea.gov/sites/default/files/2025-03/gdp4q24-3rd.pdf https://www.bea.gov/sites/default/files/2025-03/gdp4q24-3rd.... 2: https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income https://en.wikipedia.org/wiki/Disposable_household_and_per_c...
spacemadness 1y ago
“This is an increase of 50% since the early 70s. I wish it had been more, of course, and it has its ups and downs, but 50% is nothing to sneeze at.” TLDR Inflation does not exist.
daft_pink 1y ago
I think the reality is that nimble adaptive companies won by quickly moving production and identifying suppliers in China (ie Amazon/Costco/Walmart/Target). These are the same companies that are going to quickly identify suppliers and redirect operations to other countries that don’t have massive tarriffs. The same way large American companies adapted to globalization and the pandemic, you’re going to see a quick rapid adaptation where American goods are made in other countries faster than anyone thought possible.
drivingmenuts 1y ago
> it will be time to turn once again to the task of reindustrialization Won’t happen. 1) We don’t think like that as a nation and probably never will again. 2) in order for us to reindustrialize, we would have to have significant purchasers from outside our own economy, which means someone else would be the first world nation and we’d be the third-world nation. The people with money and power in this country are incapable of considering this or are so supremely afraid of this, the will precipitate action to prevent it; namely war. Which is great for reindustrialization, provided anyone with brains, tools and resources survives on an irradiated planet.
dave1999x 1y ago
Aren't factory workers, by definition, working class? Being a member of a union is a hallmark of the working class.

65 points by alihm 1y ago

Globalization played a role but so did bad policy. When the Obama administration didn’t respond to China dumping below-cost solar on the US, I know many technologists who lost their job and career in the US because they couldn’t compete with companies that didn’t have to follow environmental protection rules. Americans are addicted to artificially low prices that put the burden of costs on future generations who have to clean up a huge mess.

robotcapital 1y ago
The article's point isn't that globalization (or policy) didn't play a role, it's that the premise of middle class downfall is false to begin with. See the section under the header "The American middle class was never hollowed out".
- FuriouslyAdrift 1y ago
  The middle class of the 1980s/1990s are the poor of today... the middle class of today are different people (and probably would have been upper class professionals in the past)
  - dullcrisp 1y ago
    Well we’re all different people, which is why they’re looking at median incomes. Unless the problem is that these are different people?
    - FuriouslyAdrift 1y ago
      Those people who used to be middle class didn't just die off. There still here, a large demographic of the United States, and still very very angry. Our current political situation should make that obvious.
smt88 1y ago
What exact job title was lost in the US because of Chinese solar manufacturing and mining? By your logic, Tesla (equally dependent on Chinese pollution and mining) wouldn't employ any technologists.
- daniel_reetz 1y ago
  I've purchased equipment from scrapped solar factories in the Bay Area. Tons of people lost jobs and not just technologists.
  - smt88 1y ago
    And I've purchased solar from people who only had jobs because of cheap Chinese panels. Someone in the US still has to market, sell, install, finance, and maintain the panels. Your anecdote isn't interesting by itself, and I was asking specifically about the silly claim made about technologists.
mystified5016 1y ago
You act as if it's an active, deliberate choice to only buy the cheapest possible thing. The hollowing out of the middle class means most Americans are forcibly dependent on the cheapest possible goods because they don't have disposable income. It's a vicious cycle and the average consumer is not at fault. Most people would like to buy domestically, but domestic goods are either simply not available or not affordable.
- seec 1y ago
  I strongly disagree. I have experienced many very well-off people (middle class+) who consistently choose cheap crap because they refuse to think about their choices in any other ways than maximisation of their benefits (at a surface level). Poor people are not necessarily the ones to make those choices. In fact, sometimes you find out that they are actually poorer than they would be if they would optimise their choices for their own financial benefits. If you look at who's buying expensive local food at your farmer's market it's unlikely to be dominated by rich people. If you go to some discount supermarket, you will most likely find a lot more well-off people, proportionally. Lidl is a supermarket chain that has terrible consequences, from treating their own employees badly to putting extreme pressure on the suppliers and its whole reason for existing is cheaper prices. Their biggest customer demographic is rich boomer.
owebmaster 1y ago
> When the Obama administration didn’t respond to China dumping below-cost solar on the US What should other countries do against VC tech dumping?
- mensetmanusman 1y ago
  Whatever they want, it’s their country.
jordanb 1y ago
Globalization was a policy! There was always this doublespeak that came to trade deals where they say "globalization is inevitable and uncontrollable and therefore we must make these trade deals to facilitate and guide it to be good." Of course if it's an inevitable force of nature then it does not need to be facilitated by nor can it be controlled by trade deals. There's no enabling legislation for gravity.

blueflow 1y ago

This article is standing out because it is about American politics and yet didn't make me want to throw up. Whatever this author is doing different is worth copying.

CurtHagenlocher 1y ago

The first comment asks the important question: Why, "despite all of this prosperity, do so many Americans still feel angry, disillusioned and frankly, even cheated"? One thing which can't be captured by these numbers (no matter how accurate) is when people end up settling for something perceived to be of lower value. So for instance, it might be that my income has gone up faster than the cost of the things I'm buying, but I'd rather buy a house (out of reach) than buy rent.

idle_zealot 1y ago
> One thing which can't be captured by these numbers (no matter how accurate) is when people end up settling for something perceived to be of lower value This is always going to happen so long as wealth inequality isn't addressed.

micromacrofoot 1y ago

and re-industrialization won't save it we can't possibly compete with (much) cheaper overseas labor, tariffs will do nothing but exclude the US from this cheap labor while other countries continue to benefit from it eventually more of it will be automated anyway, and areas that saw booms from cheap labor will face similar class crises there's also this idea that maybe our standard of living needs to regress some ("2 dolls instead of 30"), but you're insane if you believe that this can happen without significant strife and political upheavals... we're already at a point where many young americans feel as though they'll never be able to buy a house the only "clean" path I can see out of this is some form of universal basic income, which likely has many problems to figure out, but at least doesn't treat humans like fuel for operating machinery

hparadiz 1y ago
I recently was looking at a 4 speaker switch on monoprice. It was $20 two months ago. Now it's $40. It occurred to me that the parts in this speaker switch amounted to be $2 of raw parts. The simplest of plastic pieces with basic copper wires and metal screws. Yet they were shipping it here and forcing American consumers to pay $20 in taxes instead of possibly claiming an almost $36 profit margin by paying $2 of taxes on raw parts and assembling it here. Now I know it hasn't been long enough but these are the types of opportunities that are now available in the economy. If an assembling plant is there then that creates opportunities downstream to in-source even the raw parts too. Anyway that's just been where my mind goes about these things recently. I generally support free markets.
- watwut 1y ago
  > Yet they were shipping it here and forcing American consumers to pay $20 in taxes instead of possibly claiming an almost $36 profit margin by paying $2 of taxes on raw parts and assembling it here You assume that salary of people involved in putting the speaker together (or more likely robotic automatization) would amount to 2$ per speaker?
  - hparadiz 1y ago

msandford 1y ago

I find this kind of article hilarious. "Numbers go up! You're not allowed to feel poor or think that there's a problem! Our number is bigger so you must be rich!" I saw this 10-20 years ago when economists were telling people that inflation is low despite their feelings about inflation. "Our math is correct and you ignorant folks should be grateful for how this economy is managed." Just because you can produce equations like physicists doesn't mean it's the same field. Ground truth in economics is just as much people as it is anything else.

gotohelldang 1y ago
[flagged]
ceejayoz 1y ago
Do you consider it impossible for propaganda to impact public perception?
wat10000 1y ago
That goes both ways, though. Just because you feel a certain way doesn't mean that's how it is. A lot of people's perceptions of economic performance are more connected to their opinion of the President than to any actual facts. How people feel matters, of course, but that doesn't mean that the numbers are wrong if they don't match. People's feelings about inflation are not ground truth about inflation, just ground truth about feelings.
- wormlord 1y ago
  [flagged]
  - wat10000 1y ago
    And the conservative "intelligentsia" point at people and say "it's the graphs which are wrong" to the point of rejecting basic medicine and sabotaging the economy because people feel aggrieved. I'm not happy with either one but at least the liberal one is connected to reality in some fashion.

MaxPock 1y ago

Globalization made America very very rich just that the wealth was not shared with the Americans

FuriouslyAdrift 1y ago
The finance sector and those that primarily hold capital got rich... everyone else, not so much. Basically, we mortgaged our future for cash today.
- moribvndvs 1y ago
  The _real_ American dream. Not building something sustainable, but something more akin to a smash and grab.

ReptileMan 1y ago

Cheap labor is a drug. And the west one way or another got hooked on it. But it should be the opposite - labor should be relatively expensive or we will never innovate or automate things.

FuriouslyAdrift 1y ago

From someone who lived through the first wave of disruptions (agriculture going to Mexico and auto manufacturing getting disrupted by Japan/moving to Canada/Mexico) in the 1980s/1990s (earlier agreements with Canada then NAFTA), then the second disruption (textiles, light industrial, then everything going to China) in the 2000s (China most favored nation status and WTO) in a heavy industrial/ag state (Indiana) and seeing everyone they knew get wiped out over those 15-20 years... I can say the sentiment comes from the people who USED to be middle class that are no longer. The people who are middle class today are rarely the same people.

fooblaster 1y ago

I wish the author would have done the due diligence of questioning why his data might not have the full story. - Looking at income without looking at working hours can mask the fact that working more hours looks like income growth at the expense of quality of life. - where is this money going? Housing spending apparently has not grown, but are these same workers building equity or renting? - what amount of income is spent on healthcare vs 50 years ago? - Other quality of life factors? What are low income workers actually getting with their increased wages? - Is the way with which we characterize inflation giving an incomplete picture of the experience of all income classes (the rich and the poor don't buy the same things, and prices don't shift evenly)

gruez 1y ago
>- Looking at income without looking at working hours can mask the fact that working more hours looks like income growth at the expense of quality of life. hours worked has gone down in the US in the past few decades, not up.

yesfitz 1y ago

What bothers me about using GDP and Wages as a denominator or a measure of progress is that it ignores the impact of things becoming more expensive (except for inflation adjustments). In fact, if we paid more for everything except imports, GDP would grow and it would look like we weren't importing as much. If we paid less for imports over the years, and then used them to generate a lot more money (e.g. a computer), it would look like imports were of shrinking importance. With wages, the OECD definition of "Disposable Household Income"[2] is all income minus taxes, mandatory contributions, and interest on loans. So what isn't excluded? Rent. Childcare. Healthcare. Things that have dramatically increased in price (and also increased GDP). We can measure everything in dollars, but that doesn't mean that the goods and services represented by those dollars are fungible. 1: Table 3 of https://www.bea.gov/sites/default/files/2025-03/gdp4q24-3rd.pdf https://www.bea.gov/sites/default/files/2025-03/gdp4q24-3rd.... 2: https://en.wikipedia.org/wiki/Disposable_household_and_per_capita_income https://en.wikipedia.org/wiki/Disposable_household_and_per_c...

spacemadness 1y ago

“This is an increase of 50% since the early 70s. I wish it had been more, of course, and it has its ups and downs, but 50% is nothing to sneeze at.” TLDR Inflation does not exist.

daft_pink 1y ago

I think the reality is that nimble adaptive companies won by quickly moving production and identifying suppliers in China (ie Amazon/Costco/Walmart/Target). These are the same companies that are going to quickly identify suppliers and redirect operations to other countries that don’t have massive tarriffs. The same way large American companies adapted to globalization and the pandemic, you’re going to see a quick rapid adaptation where American goods are made in other countries faster than anyone thought possible.

drivingmenuts 1y ago

> it will be time to turn once again to the task of reindustrialization Won’t happen. 1) We don’t think like that as a nation and probably never will again. 2) in order for us to reindustrialize, we would have to have significant purchasers from outside our own economy, which means someone else would be the first world nation and we’d be the third-world nation. The people with money and power in this country are incapable of considering this or are so supremely afraid of this, the will precipitate action to prevent it; namely war. Which is great for reindustrialization, provided anyone with brains, tools and resources survives on an irradiated planet.

dave1999x 1y ago

Aren't factory workers, by definition, working class? Being a member of a union is a hallmark of the working class.