Free Essay: To What Extent Have the Flattening Wages Been Responsible for the Dwindling Middle Class?

A country made of a large working economy class is very stable. A widened middle social class is a good reflection of economic growth, political stability and social development (Pressman 181). When a nation has numerous people in the middle class, the gap between the haves and the have-nots reduces as people work hard to raise those in dire poverty. In another situation, the middle social class leads to a healthy democracy in the nation with lack of social unrests due to the war between the poor and the rich on taxes and other economic policies that oppress one group. However, over the last three and a half decades, the development of the middle class has continuously been hindered from growth due to the introduction of the flat wages policy, part of the American capitalism. The low wage policy, just as capitalistic idealism, it tends to punish the losers and be beneficial on winners rather than being a policy that pays people based on the skills and the experience they have at jobs. The flat wages include the pay per hour in which only hardworking individuals will get better wages while those perceived lazy, despite their skill or seniority will get lower pay. The initiation of flattening of wages by corporate organizations, firms, and industries has highly hindered the growth of a low economic class of employees, and it's upon the citizens of the nation to rise and fight this policy through the power of an electoral system. The dismissal of the salary growth is a self-centered policy by the wealth, and policy makers to prevent the rise of new enlightened middle-class individuals, thus reducing chances of equity and equality making the nation a man eat man society.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

The new pay policy has hugely influenced the low economic class employees paid hourly. For those in the middle economic class, for example, the college graduates have encountered a slow salary increment which even takes ten years to get a low percentage increase on their monthly salary. Despite the little increment on the wages of the college graduates, policies initiation with policymakers which increase the percentage of deductions these workers encounter (Bivens 103). Thus, the average net amount of salary the hardworking youths obtain is ever barely enough for their economic growth. Those employees in the low economy class without permanent jobs are highly affected hourly pay. Imagine a person who lacks a medical cover and social security scheme subjected to this tormenting idealism, how could such a person develop in its economic life? In the end, the few rich people end up exploiting the effort of the poor for huge profits impacting to slow economic growth rates.

The flattening of wages has somehow aided in the lack of achievement of full employment of workers as firms, companies, and other macroeconomic institutions tend to hire employees, both skilled and unskilled on a contract basis. The stakeholders in the economy have sparked this with fear that low unemployment rates can enhance inflation, though it has established more destructive effects on people's economic, social, and political environment than expected. The encountered epochs of wage inequity have been a fruitful period for the wealth as the wage growth of low social class has slugged more than that of the middle, while the wages of the middle class have slugged more than the profits harvested by wealth. As denoted by Mishel, the Great Recession period of 2009 that established a glaring policy that led to a high unemployment rate in which the nation and state governments cut their expenditure (33). At the periods, few infrastructural developments were made; thus those in temporary jobs lost employment resulting in economic growth stagnation. Those employed, lacked a voice to air salary increment as the number of unemployed was high. This implies that employers felt it ease to hire and refute an employee without an offer of salary increase.

Under the flat wage policy, employers are usually non-unionized. The fall of union density has high impacted to the vices the workers in the low and middle economy class endure for lack of collective bargaining power to fight for salary increment, pensions, and compensations. Research has proved that the rise in the wage inequity among the social classes has highly promoted the erosion of workers union which not only reduces the bargaining power but also hinders their potentialities to set standard wage rise compared to those in unions (Mishel 38). Moreover, at this period of flat wages with hourly pay of semi-permanent employees, corporate have registered historic profits due to vast strengths of corporate owners and managers in exploiting the hard work of the poor for self-gain. To ensure the economic growth as a nation, it is upon the populous member of the society in the middle and low social class to rise and restore the culture of workers unions. The rights of workers must rejuvenate through boycotts, strikes, and other strategies to increase collective bargaining power to voice for better pay and improved working condition. In summary, the employers union would fight increased salary that world boost the living standards of the poor who would rise to middle economic as a reflection of economic growth.

Some changes in the labor market policies and business behaviors have led to the stagnant wage growth for the past years. A well-documented change includes the initiation of the minimum wage expected in case of inflation-adjustments. The labor policy could end in an increase in the salary gap between the low and the middle social class that impacts to more social disparity, resulting in a low distribution of the middle economic class. The hourly pay has seen the vital erosion rights of workers such as pay per hour for overtime pay premiums for extra hours daily. There has also been a wage theft for immigrants, and other undocumented workers from their masters. Also, the flat wages has brought more changes that demean the poor, such as terming a worker as self-employed when he/ she is supposed to be under the payroll's subjection, a habit that pulverizes the pay and other protection. In a case one is self-employed it lacks protections such as workers compensation, a paid sick leave, and weak individual bargaining power. In the circumstance, the flat wagging must be revisited to ensure that low and middle social class workers enjoy equal rights as the rich, thus, improving their economic status.

The initiation of the flat wage is likely to be a project of the top income earners in the nation especially CEO's and those in finance. Reportedly, top earners in the nation are the stakeholders in the economy with an existing political power to make policies for superlative compensations and high earnings without the consideration of the State's economic growth (Alvaredo 6). The annual pay increment without a reflection in the market economy usually has to come at the expense of the less fortunate in the society, who has to work more and earn little. The wage stagnation as a factor for dwindling of the middle class is being driven by financial deregulation as a mechanism to balance the economy of the nation. In the end, to stop the wage inequalities in the state, citizens should fight against rogue regulations in finance in whatever media platform they can to reduce the gap between the rich and the poor to have a nation with a large economic class with social, political and economic stability.

In conclusion, employees must realize their rights and find the most viable means to fight for it. Employees, who are citizens of this bestowed nation, have the power to change the rising social disparity through the power of votes. They have to vote for the best policymakers, who have the power and will as well as interest of protecting suffering citizen at hand rather than their self-interests. A balance of financial power between the high social class and the lower is what will drive to an extent middle social class; a trend that lacks in the running flat wage period.

Works Cited

Alvaredo, Facundo, et al. "The Top 1 Percent in International and Historical Perspective." The Journal of Economic Perspectives, vol. 27, no. 3, 2013, pp. 3-20. JSTOR, JSTOR, www.jstor.org/stable/41955542

Bivens, Josh. "Using Standard Models To Benchmark The Costs Of Globalization For American Workers Without A College Degree." Economic Policy Institute.N.p., 2013. Web. 16 Oct. 2018.

Mishel, Lawrence. "Causes Of Wage Stagnation." Economic Policy Institute.N.p., 2015. Web. 16 Oct. 2018.

Pressman, Steven. "The Decline of the Middle Class: An International Perspective." Journal of Economic Issues, vol. 41, no. 1, 2007, pp. 181-200. JSTOR, JSTOR, www.jstor.org/stable/25511161.