MIT Economist: The U.S. Has Regressed To A Third World Country

Credit: EW

The middle class is shrinking, and the ultra-rich are suppressing wages for the lower-class majority.

According to a leading economist at the Massachusetts of Technology, the political and economic systems in the United States are moving backwards, not forward, The Independent reports.

Peter Temin warned that the infrastructure in the world's largest economy more closely resembles those found in Venezuela and Thailand than the ones parts of developed Europe. In his new book, "The Vanishing Middle Class," Temin writes that the American middle class is steadily and surely disappearing.

One one hand, he says, 20 percent of Americans are educated, enjoy stable and well-paying jobs, and have supportive social networks. But on the other hand, the majority have low-wage jobs, and possibilities are extremely limited and anxiety over debt and job security looms around every corner.

Temin used a model created by Nobel Prize laureate Arthur Lewis to show how unequal the United States actually is. When applied to the world's biggest "superpower," he said that "the Lewis model actually works."

The majority low-wage sector has little impact on public policy, while the high-income sector suppressed wages to minimize costs, he found. Social control was enforced to stop subsistence workers from threatening the system, and social mobility was abysmal.

He continued that the starkly different realities existing in the same country also had a "racist" undertone.

“The desire to preserve the inferior status of blacks has motivated policies against all members of the low-wage sector," he wrote.

“We have a structure that predetermines winners and losers. We are not getting the benefits of all the people who could contribute to the growth of the economy, to advances in medicine or science which could improve the quality of life for everyone—including some of the rich people.”

Read the full story here.

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