The vanishing middle class prejudice and power in a dual economy

The Vanishing Middle Class Prejudice and Power in a Dual Economy Peter Temin The MIT Press Cambridge, Massachusetts London, England © 2017 Massachusetts Institute of Technology All rights reserved No part of this book may be reproduced in any form by any electronic or mechanical means (including photocopying, recording, or information storage and retrieval) without permission in writing from the publisher This book was set in Sabon LT Std by Toppan Best-set Premedia Limited Printed and bound in the United States of America Library of Congress Cataloging-in-Publication Data Names: Temin, Peter, author Title: The vanishing middle class : prejudice and power in a dual economy / Peter Temin Description: Cambridge, MA : MIT Press, 2017 | Includes bibliographical references and index Identifiers: LCCN 2016035191 | ISBN 9780262036160 (hardcover : alk paper) eISBN 9780262339971 Subjects: LCSH: Income distribution United States | Middle class United States Economic conditions | Minorities-United States Economic conditions | Equality United States | United States Economic conditions 2009- | United States Economic policy 2009Classification: LCC HC110.I5 T455 2017 | DDC 339.2/208900973 dc23 LC record available at https://lccn.loc.gov/2016035191 ePub Version 1.0 For Charlotte My wife, companion, and muse for fifty years Table of Contents Title page Copyright page Dedication Introduction I An American Dual Economy 1 A Dual Economy 2 The FTE Sector 3 The Low-Wage Sector 4 Transition II Politics in a Dual Economy 5 Race and Gender 6 The Investment Theory of Politics 7 Preferences of the Very Rich 8 Concepts of Government III Government in a Dual Economy 9 Mass Incarceration 10 Public Education 11 American Cities 12 Personal and National Debts IV Comparisons and Conclusions 13 Comparisons 14 Conclusions Appendix: Models of Inequality References Index List of Tables Table U.S population and its parts List of Illustrations Figure Percent of aggregate U.S household income Note: The assignment to income tiers is based on size-adjusted household incomes in the year prior to the survey year Shares may not add up to 100 percent due to rounding Source: Pew Research Center 2015 Figure Productivity and average real earnings Source: Bickerton and Gourevitch 2011, using data from the US Bureau of Labor Statistics Figure Top percent income share in the United States Source: http://www.wid.world/ Figure Change in occupational employment shares in low-, middle-, and high-wage occupations in the United States, 1993–2010 Source: Autor and Dorn 2013 Figure Money and congressional elections, 2012 Source: Ferguson, Jorgensen, and Chen 2013 Figure Change in occupational employment shares in low-, middle- and high-wage occupations in 16 EU countries, 1993–2010 Source: Goos, Manning, and Salomons 2014 Figure Global income growth from 1988 to 2008 Source: Milanović 2016 (explanatory boxes added) Introduction Growing income inequality is threatening the American middle class, and the middle class is vanishing before our eyes There are fewer people in the middle of the American income distribution, and the country is dividing into rich and poor Our income distribution has changed from looking like a one-humped camel to looking like a twohumped camel with a low part in between We are still one country, but the stretch of incomes is fraying the unity of the nation The middle class was critical to the success of the United States in the twentieth century It provided the manpower that enabled the nation to turn the corner to victory in two world wars in the first half of the century, and it was the backbone of American economic dominance of the world in the second half But now the average worker has trouble finding a job, and the earnings of median-income workers have not risen for forty years (The median income is the middle income, where as many people earn more as earn less; it was about $60,000 in 2014 for a family of three.) If America is to remain strong in the twenty-first century, something has to be done.1 This problem is complicated by the influence of American history Slavery was an integral part of the United States at its beginning, and it took a protracted and bloody Civil War to eliminate it Too many African Americans still are not fully integrated into the mainstream of American society While progress has been made, our neighborhoods and schools remain largely segregated by race, and African Americans as a whole are poorer than white Americans The combination of inequality and racial segregation is problematic for the health of our democracy For example, it should be the right of any citizen to vote in a democracy Slaves of course did not vote, and attempts continue to this day to keep African Americans from voting, including a number of high-profile cases of alleged illegal obstruction that have gone to the courts In addition, black people are far more likely than white people to be arrested and sent to prison in the American War on Drugs Poor whites also have suffered in various ways, but they have remained mostly quiescent and invisible in political debates and decisions Traditionally, poor white Americans have not voted much, due to the restrictions used to discourage black voting like requiring picture IDs, and widespread beliefs that political parties are all the same and politicians not care about them Their frustration and despair at being left out of recent economic growth has resulted in an array of stresses and self-destructive behaviors that have raised the death rates for middle-aged white Americans Anger at their circumstances is being channeled into politics in 2016 This anger is likely to affect American politics for a long time These developments were revealed dramatically in a recent study by the Pew Research Center The change is shown in figure 1, where total national income is divided into three groups: the middle class with upper and lower groups The middle class, defined as households earning from two-thirds to double the median American household income, went from earning over three-fifths of total national income in 1970 to earning only just over two-fifths in 2014 The lines in figure were horizontal before 1970, but they are continuing their movements after 2014 Figure shows that the income share lost by the middle class went to people earning more than double the median income In short, the rich got richer, the poor did not disappear, and the middle class shrank sharply We know from the work of Thomas Piketty in Capital in the Twenty-First Century that inequality has been increasing since 1970.2 Now we see that the income distribution is hollowing out We are on our way to become a nation of the rich and the poor with only a few people in the middle Figure Percent of aggregate U.S household income Note: The assignment to income tiers is based on size-adjusted household incomes in the year prior to the survey year Shares may not add up to 100 percent due to rounding Source: Pew Research Center 2015 This book provides a way to think about this growing disparity of incomes between rich and poor I argue that American history and politics have a lot to with how our increasing inequality has been distributed While our rapidly changing technology, prominently in finance and electronics, is an important part of this story, it is far from the whole tale Our troubled racial history of slavery and its aftermath also plays an important part in how this growing divide is seen English settlers began coming to North America in the seventeenth century They started in Plymouth, Massachusetts, and Jamestown, Virginia, and spread along the Atlantic seaboard They found abundant and fertile land to farm, but there were not enough settlers and labor to farm as much land as they wanted The resident Native Americans resisted working for the English occupiers and were decimated by European diseases The settlers encouraged other people to come farm their land, and European and African population movements were attracted in very unequal ways Europeans were encouraged to come by themselves or as indentured servants who became independent farmers, while Africans were brought against their will by slave traders Europeans gained great prosperity first from agriculture and then from industry, while Africans were condemned to slavery Cotton was the key to economic growth in the early nineteenth century—grown by African slaves in the South and manufactured into cloth by Europeans in the North Slavery was abolished by the Civil War that remains unresolved in the minds of many white Southerners European immigration was restricted after the First World War, and six million African Americans moved north during what was called the Great Migration as a result In recent years, immigration from Mexico and other nearby Latin American countries has increased rapidly, and Latinos also are concentrated in the lower group shown in figure Public discussion of the working poor focuses on African Americans, but it sometimes refers to them simply as “them,” including Latinos as well African Americans also have become the focus of policy debates at both state and federal levels Politicians who oppose government welfare expenses used to identify the recipients as black; however, since the Civil Rights Movement of the 1960s, politicians use code words instead While nearly half of black Americans are included the “poorer” group in figure 1, most poor people in fact are not black There are not enough African Americans for them to be the majority Poor whites also are affected by the withdrawal of social services, but they have been largely invisible in policy discussions As Bob Dylan said in a song at Martin Luther King’s 1963 March on Washington, “The poor white remains / On the caboose of the train / But it ain’t him to blame / He’s only a pawn in their game.”3 Race and class are distinct, but they have interacted in complex ways from the U.S slavery era that ended in 1865; to Ronald Reagan announcing his 1980 presidential campaign in Philadelphia in Mississippi, where three civil rights workers had been murdered in 1964; to Donald Trump’s equally indirect claim to “Make America Great Again” in his 2016 presidential campaign—where “great” is a euphemism for “white.” The Civil Rights Movement changed the language of racism without reducing its scope As incomes become more and more unequal, racism becomes a tool for the rich to arouse poor whites to feel superior to blacks and distract them from their economic plight Figure is both simple and complex It is simple because it summarizes a great deal of empirical research in a memorable way It is complex because it is the result of economics, history, politics, and technology To weave these varied strands into a coherent intellectual fabric, I use an economic model A model is a simple version of a complex reality that reveals interactions between the strongest forces It also facilitates the introduction of other forces into the model to make a more comprehensive representation of a complex reality I employ an economic model that was created over sixty years ago—and continues to be taught in economics classes today—to integrate the various strands of this narrative into a coherent story This model continues to provide insights into the process of economic development even though it is clear enough to be understood by those who are not students of economics Economists identify this model by its creator, W Arthur Lewis; it is known as the Lewis model More descriptively, it also is known as the original model of a dual economy A dual economy exists when there are two separate economic sectors within one country, divided by different levels of development, technology, and patterns of demand This definition reflects the use of the Lewis model in the field of economic development, and I adapt it in this book to describe current conditions in the United States, the richest large country in the world This is less paradoxical than it sounds because the political policies that grow out of our dual economy have made the United States appear more and more like a developing country Anyone who stirs out of his or her house knows about the problems of deteriorating roads and bridges in our country And if you are not rich enough to send your children to private schools or to live in an expensive suburb known for having good public schools, you may know also about the current crisis in education Education was the key to American prosperity in the twentieth century It is not too much to claim that we lived through an “American Century” because we had a long tradition of education that was the envy of the world Claudia Goldin and Lawrence Katz made that point in The Race between Education and Technology.4 Education is doubly important in the story told here First, education is the key path for people to move from the poorer sector of the dual economy to the richer And second, anyone interested in the continued economic success of the United States in the twenty-first century must want to fix our schools to preserve the prosperity of the country and its growth over time While this seems compelling to most people, the politics that emerge from our dual economy prevent us from acting sensibly to reconstruct our ailing educational system As we will see, we now have two systems of education, one for each sector of the dual economy Schools for the richer sector vary in quality, and the best of them are well within the American historical experience By contrast, schools for the poorer sector are failing Attempts to fix these schools have been known primarily for their spectacular failures The legacy of slavery hangs over attempts to provide every child with an education It was illegal to educate black people under slavery, and politicians today neglect education of the poor by implicitly invoking this racist history Urban pockets of poverty are deprived of good education by coded messages that invoke race to justify neglect or worse toward them African Americans are condemned for violent actions, but they are largely the results—not the causes—of educational failure Local school-district control was the key to good education during American expansion, but it has become a barrier to good education in recent decades.5 Even when black students get a good education, they often have trouble finding jobs that will move them up in the economy Factory jobs have been disappearing for a generation; that is the main driver of the declining line in figure The implication is that an educated black graduate in today’s American economy has to make a leap to get into the higher-income group—a leap that is doubly hard It typically requires even more Russakoff, Dale, 123 Russell Sage Foundation, xvii Russia, 58, 93 Rust Belt, 20 Salaries, 8, 24–25, 45, 116, 118, 121 Savings, 7, 12, 17, 105–106, 161–163 Savings and Loan Associations (S&Ls), 17 Scaife, Richard Mellon, 17 Scalia, Antonin, 96 Schorr, Lisbeth, 115 Seawright, Jason, 78–79 Second Reconstruction, 159 Securities and Exchange Commission, 93 Segregation African Americans and, ix, 27, 34, 53, 80, 117–121, 131, 153–154, 171n16 Brown v Board of Education and, 116, 119, 171n16 cities and, 131 housing, 153, 171n16 Jim Crow policies and, 27, 49, 51–53, 58, 65–66, 104, 107, 154 legally enforced, 53 low-wage sector and, 27, 34 Milliken v Bradley and, 116–117, 129, 142 Nixon and, 27 public education and, 117–121, 154 very rich and, 80 World War II era and, 171n16 Service workers, 29–30 Seventeenth Amendment, 63 Shaw v Reno, 67 Shelby County v Holder, 65, 89, 142, 159, 180n11 Slavery, xi–xii, 159 abolitionists and, 51, 54, 58 cities and, 133 Civil War and, ix, 15, 17–18, 51, 65, 88, 94, 107, 180n13 concepts of government and, 88, 94 conservatives and, 56 cross-country comparison and, 148 equal protection clause and, 58, 67, 102 expansion of, 50–51 FTE (finance, technology, and electronics) sector and, 17, 22 indentured servants and, 50 Investment Theory of Politics and, 64 Irish Americans and, 54 legacy of, xiii, 133 Lincoln and, 51 lower human status and, 51 low-wage sector and, 27 public education and, 133 voting rights and, ix white rage and, 51 Snyder, Rick, xv, 36 Social capital bridging vs bonding, 171n31 cities and, 131–133 dual economy and, 12 inequality models and, 165–166 low-wage sector and, 39, 153 mass incarceration and, 103, 107, 156 public education and, 117, 124, 126–128, 156 Putnam on, 11–12, 39, 165 transition and, 42 Social Security, 33, 45, 52 debt and, 141 government loan for, 174n15 phasing out of, 93 reform for, 69–70 standard of living and, 90–91 Trust Fund of, 69 Solow, Robert M., 162–165, 181n3 Soros, George, 85 South concepts of government and, 88, 91, 94 FTE (finance, technology, and electronics) sector and, 15, 17, 20, 22 Great Migration and, 20 (see also Great Migration) Investment Theory of Politics and, 62–67 Jim Crow policies and, 27, 49, 51–53, 58, 65–66, 104, 107, 154 low-wage sector and, 27–29, 34–35, 142, 170n1 oligarchy of, 88 public education and, 119, 125 race and, 50–59 Reconstruction and, 27, 51, 65, 67 slavery and, 94 (see also Slavery) very rich and, 80–81 voting rights and, 142, 170n1 Southern Strategy, 15, 27, 35, 81, 117, 142 Soviet Union, 22 Spain, 149 Stagflation, 16, 20–21 Stanford University, 57 State Department of Education, 121 State legislatures, 19, 62–63, 95 STEM (science, technology, engineering, and mathematics) Student loans, 43–45, 137, 140, 172n14 Subcontractors, 30–31, 57 Suffrage, 58, 64, 67 Switzerland, 149 Syrian refugees, 148 Tariffs, 21, 32–33 Taxes capital gains and, 24 cities and, 129–130, 134–136 concepts of government and, 89–92, 95 cuts in, 15, 19, 22, 71, 79 debt and, 158, 172n14 dual economy and, 10, 12 Earned Income Tax Credit and, 79 FTE (finance, technology, and electronics) sector and, 15, 17–18, 22–24, 155 government benefits and, 10 incentives and, 10 increase of, 17, 79, 91–92, 103, 141, 155, 174n15 inequality models and, 161–162 Investment Theory of Politics and, 62, 65 Kennedy and, 15 Lewis model and, 153 liberals and, 174n15 loopholes and, 24, 81–82 low-wage sector and, 31, 36 mass incarceration and, 101, 103, 105 one-percenters and, 22–23 Panama Papers and, 82 poll, 58, 65 property, 43, 103, 130 public education and, 46, 117–119, 124, 172n14 Reagan and, 22 reform and, 17, 22 S&L crisis and, 17 sales, 103 Social Security and, 33, 45, 52, 69–70, 79, 90, 93, 141, 174n15 tariffs and, 21, 32–33 very rich and, 79–82 Technology See also FTE (finance, technology, and electronics) sector bomb robots and, 102 driverless cars and, 31 low-wage sector and, 28–30, 32 Luddites and, 155 mass transit and, 179n18 Tenure, 31, 52, 65 Tepper, David, 82 Terrorism, 83, 95, 143 Texas, 57–58, 80–81, 84, 102 Theory of Justice, A (Rawls), 92 Toyota, 34 Transition African Americans and, 41–42 capital and, 42–45 college and, 41–46 financial crisis of 2008 and, 45 FTE (finance, technology, and electronics) sector and, 11, 41–46, 154 human capital and, 44 industry and, 41, 43 inequality and, 46 Lewis model and, 44 low-wage sector and, 11, 41–46 mortgages and, 44–45 social capital and, 42 student loans and, 43–45 very rich and, 148, 151 wages and, 41–46 Troubled Asset Relief Program (TARP), 139, 179n4 Truman, Harry S., 81 Trump, Donald, xii, 66, 81–82, 92, 154, 174n11 Trump University, 66 Tuition costs, 43, 46, 105, 150 Tunnels, 134–135 Tutoring, 121, 178n18 Twitter, 38 Uber, 31 Ukraine, 58 Unemployment cities and, 132 debt and, 141 FTE (finance, technology, and electronics) sector and, 16, 21 Investment Theory of Politics and low-wage sector and, 34, 37, 157 mass incarceration and, 104, 113 participation rates and, 141, 179n2 race and, 52–53 very rich and, 78–79 Union City, 123–127 Unions African Americans and, 20–21 autoworkers and, 33–34 FTE (finance, technology, and electronics) sector and, 18–22, 28–29, 32–34, 64, 80–81, 116, 120 Heritage Foundation and, 18 individual freedom and, 17–19 Investment Theory of Politics and low-wage sector and, 28–29, 32–34 public education and, 116, 120 Reagan and, 22 very rich and, 80–81 United States Institute for Peace, 18 Universities debt and, 139–140 FTE (finance, technology, and electronics) sector and, 43–46 inadequate resources of, 116 need for refinancing, 157 race and, 52 student loans and, 43–45, 137, 140, 172n14 teacher salaries and, 170n31 transition and, 42–46 tuition costs and, 43, 46, 105 undue hardship and, 44 women and, 57 University of Manchester, University of Phoenix, 43 U.S Chamber of Commerce, 17, 27, 95 U.S Constitution abortion and, 57–58 Affordable Care Act and, 141–142 Articles of Confederation and, 62 autocracy and, 96 balanced budget and, 169n20 bankruptcy and, 81 choosing senators and, 62–63 citizenship and, 15, 22, 159 compromises in, 62–64, 88 democratic framers of, 88 Fifteenth Amendment and, 15, 56 Fourteenth Amendment and, 51, 58 ignoring of, 97 individual rights and, 81 Investment Theory of Politics and, 62–65 Jim Crow laws and, 65 labor and, 20 mass incarceration and, 108 Nineteenth Amendment and, 56, 58, 67 public education and, 124 Seventeenth Amendment and, 63 slavery and, 94 Voting Rights Act and, 65, 89 U.S Department of Justice, 102–103 U.S House of Representatives, 19, 62–64, 66, 80, 94, 96 U.S Postal Service, 134 U.S Senate concepts of government and, 96–97 Finance Committee and, 81 Investment Theory of Politics and, 62–66, 72, 74 labor law and, 19 mass incarceration and, 107 public education and, 123 race and, 52–53, 59 state legislature election of, 62–63 very rich and, 80–84 U.S Supreme Court abortion and, 57–58, 72 Affordable Care Act and, 141–142 Brown v Board of Education and, 116, 119, 171n16 Bush v Gore and, 89, 95 Citizens United and, 84–85, 95, 158–159 equal protection clause and, 58, 67, 102 mass incarceration and, 107–108 Milliken v Bradley and, 116–117, 129, 142 Powell and, 17–22, 27, 77, 83, 111, 116–117, 169n6, 170n2 Rehnquist and, 27, 95, 116, 142 Roberts and, 142 Roe v Wade and, 58 Scalia and, 96 Shaw v Reno and, 67 Shelby County v Holder and, 65, 89, 142, 159, 180n11 U.S v Yonkers and, 131 vacancy on, 96–97 War on Drugs and, 17 U.S v Yonkers, 131 Very rich Affordable Care Act and, 91–92 African Americans and, 77–78, 82 capital and, 161–162 capital gains and, 24 CEO earnings and, 24 competition and, 85 conservatives and, 80–85 democracy and, 81, 85 Democrats and, 80–81, 84 financial crisis of 2008 and, 80 Forbes 400 and, 77, 82–83, 85, 92 FTE (finance, technology, and electronics) sector and, 77–81 hedge funds and, 23–24 housing for, 131 income distribution and, 77, 79–80, 84 industry and, 80, 82, 84–85 infrastructure and, 79 Investment Theory of Politics and, 77–80, 84–85, 158–159 Koch brothers and, 17–19, 83–85, 92, 97, 110–111, 158–159, 169n12, 175n17 labor and, 80–81 Lewis model and, 82 low-wage sector and, 79–81, 84, 158 mass incarceration and, 109 national product and, 3–4 one-percenters and, 3, 9–12, 22–24, 77–85, 92, 96, 155, 170n28 plutocrats and, 3, 79, 87–88, 94–96, 131, 139 political contributions by, 79–80 preferences of, 77–85 production and, 80–81, 84 Republicans and, 80, 95–97 segregation and, 80 South and, 80–81 taxes and, 24, 79–82 transition and, 148, 151 unemployment and, 78–79 unions and, 80–81 wages and, 79–81, 84 World War II era and, 80–81 Vietnam War, 15–16 Volcker, Paul, 16, 20 Voting, xv choice of Tuesday for, 66 concepts of government and, 88–89, 94–96 Fifteenth Amendment and, 15, 56, 58 information for, 67–75 Investment Theory of Politics and, 61–75 literacy tests and, 65–66 low-wage sector and, 40, 170n1 mass incarceration and, 103–104, 112–113 Median Voter Theorem and, xv, 61–62, 66–68, 71–74 picture ID requirements and, x, 65–66 poll taxes and, 58, 65 popular vote and, 62, 96 prisoners and, 66 public education and, 115 race and, 51, 56–59, 58, 170n1 restriction of, ix–x, 65–66, 142–143, 159, 180n11 Seventeenth Amendment and, 63 Shaw v Reno and, 67 Shelby County v Holder and, 65, 89, 142, 159 slavery and, ix (see also Slavery) timing of elections and, 67–68 turnout rates and, 63–65 women and, 56, 58, 64–65, 67, 94 Voting Rights Act, 15, 58, 65, 67, 89, 94, 142, 159 Wages concepts of government and, 89–92 dual economy and, 3–13 FTE (finance, technology, and electronics) sector and, 16, 20–23, 25, 41–46 growth and, 3–4 Investment Theory of Politics and, 62, 65–70, 72, 75 low-wage sector and, 3, 27–41, 41–46 (see also Low-wage sector) race and, 49, 55, 60 real, 3–4, 21, 32–33 transition and, 41–46 very rich and, 79–81, 84 Walker, Scott, xv Wall Street, 24, 93 Walmart, 122 Walton family, 121 Warmth of Other Suns, The (Wilkerson), 20 War on Drugs, x, xv–xvi, 15, 27, 37–38, 53, 55, 104, 106, 110, 132 War on Poverty, 17, 27, 126, 168n2 Warren, Elizabeth, 53 Washington Consensus, 21 Water systems, 35–36, 129–130 Welfare Queens, 38, 171n27 Welfare state, 21, 80, 101, 104 Whistle blowers, 84 White flight, 34, 38, 117, 125, 179n7 White rage, 51, 101, 104 White supremacist organizations, 169n9 Wilkerson, Isabel, 20 Wilson, William J., 34–35, 39, 132 Witchcraft, 50 Within Our Reach (Schorr), 115, 124 Women, 12, 156 abortion and, 57–58, 72 bodily integrity and, 56–58 civic identity of, 56 college and, 57, 116 concepts of government and, 94 coverture and, 56 employment and, 59–60 English family law and, 56 equal protection clause and, 58, 67, 102 Fifteenth Amendment and, 15, 56 health care and, 56 inequality and, 12 Investment Theory of Politics and, 61, 64–65, 67 jury duty and, 59 mass incarceration and, 103, 106, 157 occupations available to, 59–60, 116 pregnancy and, 58 production and, 59 property rights of, 56–57 public education and, 115–116, 118, 120 rape and, 56–57, 108–109 suffrage and, 58, 64, 67 universities and, 57 voting rights and, 56, 58, 64–65, 67, 94 Worcester Polytechnic Institute, 57 Workers’ compensation, 4, 90–91 World War I era, ix, xi concepts of government and, 94 FTE (finance, technology, and electronics) sector and, 20–21 inequality and, 162 Investment Theory of Politics and low-wage sector and, 27 municipal water systems and, 129 production and, 20 public education and, 133 voting restrictions and, 67 World War II era, ix baby boomers and, 69, 104, 128 Bretton Woods and, 15 concepts of government and, 88, 92 conservative business movement and, 80–81 FTE (finance, technology, and electronics) sector and, 15, 21 GI Bill and, 34, 43, 52, 65 Investment Theory of Politics and, 69 low-wage sector and, 34 postwar prosperity and, 54, 88, 92, 162–164 production and, 3, 80–81 segregation and, 171n16 very rich and, 80–81 Zuckerberg, Mark, 122 Zucman, Gabriel, 82 ... Virginia, and spread along the Atlantic seaboard They found abundant and fertile land to farm, but there were not enough settlers and labor to farm as much land as they wanted The resident Native... I An American Dual Economy 1 A Dual Economy The American middle class is vanishing, as can be seen vividly in figure The middle class s share of total income fell 30 percent in forty-four years... economies, and several of them grew rapidly in the 1960s and 1970s as they expanded to bring almost the whole population into the capitalist sector Japan, Korea, and Malaysia are known for these “growth