Incoming US president, Joe Biden. Photo / AP
For more than 30 years, The Simpsons has been the epitome of the average American family, "upper lower middle class" as Homer once described it.
He managed to provide his cartoon family of five a comfortable life with his low-skilled job at the Springfield nuclear power plant, despite only having a general educational diploma after failing to graduate at high school.
But fans looking back on The Simpsons three decades later have pointed out that the clan may not have enjoyed the same comforts today.
Since their peak during the "Golden Age" from the Fifties to the Seventies, the middle class have been squeezed by global economic and technological trends.
To many, Donald Trump's presidency was a symptom of that malaise, as populist sentiment bubbled up across the developed world. Joe Biden, who will be inaugurated on Wednesday, has promised voters to "rebuild" the squeezed middle. But can he return America's workers to the glory days?
Biden has made tackling the middle class crisis a key pledge ever since taking his first steps towards the White House. On launching his campaign in the crucial swing state of Pennsylvania in 2019, he argued that America needed an economy "that rewards work, not just wealth" to address its widening income gaps.
He said: "This country wasn't built by Wall Street bankers and CEOs and hedge fund managers. It was built by you. It was built by the great American middle class."
Biden is walking a tightrope to push through Congress a suite of policies targeting the problem, however. He has proposed a package of infrastructure investment, a tax hike on those earning more than US$400,000 ($560,316), a doubling of the federal minimum wage, and stronger union powers to close the country's gaps and help pay catch up. Biden plans to introduce tax incentives to keep manufacturing jobs that were once a boon to the middle class.
In addition, more immediate economic aid and direct payments for workers are on the way, with another stimulus package worth US$1.9 trillion being drawn up.
"The change in political leadership will be beneficial for the middle class household but less so for big business and corporate earnings," says Mathieu Savary, analyst at BCA Research.
"Labour will take up a larger share of national income as opposed to capital, a big shift away from the trend of the past 40 years." The former vice president's economic plans are looking more plausible after the Democrats' win in the Georgia election run-off gave them a razor-thin majority in the Senate.
However, many remain sceptical that Biden can revive the middle class and contain populist forces unleashed by Trump.
The thin margins in Congress mean Biden's plans are likely to be watered down by the more moderate wing of his party, particularly in the Senate.
"I think there will be some cosmetic changes," says Branko Milanovic, former lead economist for the World Bank's research department and an expert on income inequality. He argues a bigger shake-up of the tax system would be needed to reverse the decades-long squeeze but is sceptical the Democrats will deliver.
"We can do it but the question is actually is there political support. The part of the Democratic Party which is now in power is the same party that didn't want to do that four years ago with Obama."
Experts warn that failing to address the issue could mean Trumpism returns, with a healthy middle class seen as key for a healthy country.
An OECD report in 2019 concluded that a strong middle class is "crucial for any successful economy and cohesive society", sustaining consumption, protecting welfare through taxes, and driving much of the investment in education, health and housing.
A prosperous middle class also means lower crime, better governance and political stability, it found.
Income inequality in the US has become the highest in the G7. After the Second World War, an economic boom helped living standards in America soar and a powerful middle class was born. The Golden Age was ushered in by leaps in productivity and high growth, as huge numbers entered the middle class and real incomes jumped.
But since the Seventies, middle incomes have stagnated and on some measures retreated, with wages failing to keep pace with productivity.
"The middle class has been decreasing, we are having what David Autor called a dumbbell economy," says Peter Temin, MIT economist and author of The Vanishing Middle Class.
"People are either very rich or very poor and the pandemic has accentuated that."
The middle class share of total income fell from 62 per cent in 1970 to 43 per cent in 2018, with wages rising just 6 per cent since 2000, according to Pew Research. Their median family wealth has actually shrunk since the start of the century, falling from US$144,600 to US$115,200 in 2016.
Meanwhile, upper-income families have become dominant, rising to hold 79 per cent of total wealth and just under half of income.
"What that shrinkage indicates is that you have polarisation," explains Milanovic. "In the US, out of five people who were squeezed out of that middle class, two got richer so they went up, and three got poorer and they went down."
People have three explanations for that. One is globalisation, the second is technological change and the third is policy changes. They are mutually interdependent. Globalisation took place because technological change enabled it."
Temin adds: "The opening of trade has decreased the demand for relatively unskilled labour and the tax rate on very rich people has gone down."
Many academics believe the middle class crisis in the US is behind the populist forces that put Trump in the White House, with angry workers attracted by his promises to upend globalisation. Francis Fukuyama, the political scientist famous for his End of History theory following the Cold War, believes those pressures are unlikely to reverse soon despite Biden's victory.
"Ever since Trump was elected, there have been two alternative theories about why people voted for him. One was an economic theory about the middle class that as a result of globalisation, a lot of people who thought they were middle class faced job loss, outsourcing, decline in social status and the like, and that is the fundamental driver of the vote for Trump," he says.
He argues this is intertwined with the other theory based on "cultural resentment towards elites".
Fukuyama warns the economic pressures that stoked populism in the US are "not going to go away any time soon because it has become pretty deeply embedded".
He adds: "[Alexis de] Tocqueville said the French Revolution wasn't caused by poor people. It was caused by middle class people whose expectations had been raised and then disappointed by the old regime, and that's what led to the intense resentment. I think that's the case with a lot of people in the United States and in Europe."
- Telegraph Media Group
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