Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

The Main Street manifesto

Nouriel Roubini 30th June 2020

The historic protests which have swept America were long overdue, not just as a response to racism and police violence but also as a revolt against entrenched plutocracy.

protests
Nouriel Roubini

The mass protests following the killing of George Floyd by a Minneapolis police officer are about systemic racism and police brutality in the United States, but also so much more. Those who have taken to the streets in more than 100 American cities are channelling a broader critique of the president, Donald Trump, and what he represents. A vast underclass of increasingly indebted, socially immobile Americans—African-Americans, Latinos and, increasingly, whites—is revolting against a system that has failed it.

This phenomenon is not limited to the US, of course. In 2019 alone, massive demonstrations rocked Bolivia, Chile, Colombia, France, Hong Kong, India, Iran, Iraq, Lebanon, Malaysia and Pakistan, among other countries. Though these episodes each had different triggers, they all reflected resentment over economic malaise, corruption, and a lack of economic opportunities.

The same factors help to explain populist and authoritarian leaders’ growing electoral support in recent years. After the 2008 financial crisis, many firms sought to boost profits by cutting costs, starting with labour. Instead of hiring workers in formal employment contracts with good wages and benefits, companies adopted a model based on part-time, hourly, gig, freelance and contract work, creating what the economist Guy Standing calls a ‘precariat’. Within this group, he explains, ‘internal divisions have led to the villainization of migrants and other vulnerable groups, and some are susceptible to the dangers of political extremism’.

Alienated, insecure

The precariat is the contemporary version of Karl Marx’s proletariat: a new class of alienated, insecure workers who are ripe for radicalisation and mobilisation against the plutocracy (or what Marx called the bourgeoisie). This class is growing once again, now that highly leveraged corporations are responding to the Covid-19 crisis as they did after 2008: taking bailouts and hitting their earnings targets by slashing labour costs.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

One segment of the precariat comprises younger, less-educated white religious conservatives in small towns and semi-rural areas who voted for Trump in 2016. They hoped that he would actually do something about the economic ‘carnage’ that he described in his inaugural address. But while Trump ran as a populist, he has governed like a plutocrat, cutting taxes for the rich, bashing workers and unions, undermining the Affordable Care Act (‘Obamacare’), and otherwise favouring policies that hurt many of the people who voted for him.

Before Covid-19 or even Trump arrived on the scene, some 80,000 Americans were dying every year of drug overdoses, and many more were falling victim to suicide, depression, alcoholism, obesity and other lifestyle-related diseases. As the economists Anne Case and Angus Deaton show in their book Deaths of Despair and the Future of Capitalism, these pathologies have increasingly afflicted desperate, lower skilled, un- or under-employed whites—a cohort in which midlife mortality has been rising.

But the American precariat also comprises urban, college-educated secular progressives who in recent years have mobilised behind leftist politicians like the senators Bernie Sanders of Vermont and Elizabeth Warren of Massachusetts. It is this group that has taken to the streets to demand not just racial justice but also economic opportunity (indeed, the two issues are closely intertwined).

Rising inequality

This should not come as a surprise, considering that income and wealth inequality has been rising for decades, owing to many factors, including globalisation, trade, migration, automation, the weakening of organised labour, the rise of winner-take-all markets, and racial discrimination. A racially and socially segregated educational system fosters the myth of meritocracy while consolidating the position of elites, whose children consistently gain access to the top academic institutions and then go on to take the best jobs (usually marrying one another along the way, thereby reproducing the conditions from which they themselves benefited).

These trends, meanwhile, have created political feedback loops through lobbying, campaign finance and other forms of influence, further entrenching a tax and regulatory regime that benefits the wealthy. It is no wonder that, as Warren Buffett famously quipped, his secretary’s marginal tax rate is higher than his.

Or, as a satirical headline in The Onion recently put it: ‘Protesters Criticized for Looting Businesses Without Forming Private Equity Firm First’. Plutocrats like Trump and his cronies have been looting the US for decades, using high-tech financial tools, tax- and bankruptcy-law loopholes and other methods to extract wealth and income from the middle and working classes. Under these circumstances, the outrage that Fox News commentators have been voicing over a few cases of looting in New York and other cities represents the height of moral hypocrisy.

Deeper despair

It is no secret that what is good for Wall Street is bad for Main Street, which is why major stock-market indices have reached new highs as the middle class has been hollowed out and fallen into deeper despair. With the wealthiest 10 per cent owning 84 per cent of all stocks, and with the bottom 75 per cent owning none at all, a rising stock market does absolutely nothing for the wealth of two-thirds of Americans.

As the economist Thomas Philippon shows in The Great Reversal, the concentration of oligopolistic power in the hands of major US corporations is further exacerbating inequality and leaving ordinary citizens marginalised. A few lucky unicorns (start-ups valued at $1 billion or more) run by a few lucky 20-somethings will not change the fact that most young Americans increasingly live precarious lives performing dead-end gig work.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

To be sure, the American Dream was always more aspiration than reality. Economic, social and intergenerational mobility have always fallen short of what the myth of the self-made man or woman would lead one to expect. But with social mobility now declining as inequality rises, today’s young people are right to be angry.

The new proletariat—the precariat—is now revolting. To paraphrase Marx and Friedrich Engels in The Communist Manifesto: ‘Let the Plutocrat classes tremble at a Precariat revolution. The Precarians have nothing to lose but their chains. They have a world to win. Precarious workers of all countries, unite!’

Republication forbidden—copyright Project Syndicate 2020, ‘The Main Street manifesto‘

Nouriel Roubini

Nouriel Roubini, professor of economics at New York University's Stern School of Business and chair of Roubini Macro Associates, was senior economist for international affairs in the White House’s Council of Economic Advisers during the Clinton administration. He has worked for the International Monetary Fund, the US Federal Reserve and the World Bank.

You are here: Home / Politics / The Main Street manifesto

Most Popular Posts

Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse
income inequality,inequality,Gini,1 per cent,elephant chart,elephant Global income inequality: time to revise the elephantBranko Milanovic

Most Recent Posts

transition,deindustrialisation,degradation,environment Europe’s industry and the ecological transitionCharlotte Bez and Lorenzo Feltrin
central and eastern Europe,unions,recognition Social dialogue in central and eastern EuropeMartin Myant
women soldiers,Ukraine Ukraine war: attitudes changing to women soldiersJennifer Mathers and Anna Kvit
military secrets,World Trade Organization,WTO,NATO,intellectual-property rights Military secrets and the World Trade OrganizationUgo Pagano
energy transition,Europe,wind and solar Europe’s energy transition starts to speed upDave Jones

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

ETUI advertisement

Social policy in the European Union: state of play 2022

Since 2000, the annual Bilan social volume has been analysing the state of play of social policy in the European Union during the preceding year, the better to forecast developments in the new one. Co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), the new edition is no exception. In the context of multiple crises, the authors find that social policies gained in ambition in 2022. At the same time, the new EU economic framework, expected for 2023, should be made compatible with achieving the EU’s social and ‘green’ objectives. Finally, they raise the question whether the EU Social Imbalances Procedure and Open Strategic Autonomy paradigm could provide windows of opportunity to sustain the EU’s social ambition in the long run.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

Discover the new FEPS Progressive Yearbook and what 2023 has in store for us!

The Progressive Yearbook focuses on transversal European issues that have left a mark on 2022, delivering insightful future-oriented analysis for the new year. It counts on renowned authors' contributions, including academics, politicians and analysts. This fourth edition is published in a time of war and, therefore, it mostly looks at the conflict itself, the actors involved and the implications for Europe.


DOWNLOAD HERE

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube