An author should be pleased to see his thesis bolstered by events. Yet since writing The Coming of Neo-Feudalism in 2020, I have not found any joy in the continued growth of the West’s class divides, as wealth becomes increasingly concentrated in ever fewer hands. The good news is that the working and middle classes are not yet out for the count, and are showing welcome signs of pushback against both state and corporate power.
Overall, though, the trends remain sobering. Despite a concerted media attempt, particularly in the United States, to spin things in favour of the status quo, inflation continues to outpace incomes, even more so in Europe, Canada, Australia and Britain. Household debt in the US is higher than at any time since 2008, a problem particularly marked among Millennials.
In the US, the ratio between savings and credit-card debt is at its worst in 12 years. Nearly two-thirds of Americans feel their economic prospects have diminished over the past two years. Housing purchases are suffering huge declines as costs have reached the highest levels since 2007, and that’s before the onset of what many predict could be a serious recession. Overall, in the six months from June, American households lost a remarkable $2.3 trillion in value, according to Redfin.
Some of this can be traced to the pandemic. Industries like hospitality were hit especially hard, as were all manner of small businesses. As late as April 2022, more than two years after the pandemic began, two-thirds of American small businesses were still struggling. By December 2022, four in 10 still could not pay their rent, with hundreds of thousands closing down in the first year of lockdown. Schoolchildren , particularly from the poor and working class, have suffered both from lost learning and social isolation.
The pandemic and its aftermath also expanded an already evident class divide. With ever fewer middle-class neighbourhoods, Americans have become increasingly economically segregated. But two classes have benefited. One was the government clerisy, a class of professional bureaucrats who gained and exercised a level of power unprecedented in peacetime. This power will not willingly be surrendered, with many viewing lockdowns as a test run for addressing climate change.
Read the rest of this piece at Spiked.
Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.
Photo: Dennis via Flickr under CC 2.0 License.
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household debt
That pinch will worsen as pandemic subsidies finally recede.