From the 1950-70’s the American economy boomed and lifted millions of people into the middle class because we tore down the barriers that kept many women and people of color out of the U.S. economy, according to a new book by The New York Times reporter Jim Tankersley. He argues that the expansion of the economy to include the skills and knowledge of Black people, women, and immigrants not only helped create the strongest middle class in history, it catapulted the U.S. to become the preeminent world power and economic envy of the world. This inclusive economy also subsequently expanded opportunities for white Americans. The growth was halted in the 1980’s as new federal and corporate policies began to erode the middle class. In the words of Jim, this was the beginning of an American economy that “over the past few decades has left behind huge swaths of people.”
HPS recently had the opportunity to sit down (virtually) with Jim Tankersley, author of the new book, The Riches Of This Land, and tax and economics reporter for The New York Times. Jim has spent more than a decade covering politics and economics in Washington, and is an expert on the economics of the middle class.
During our conversation, which has been published as an episode of HPS Insights, Jim discussed his new book, detailing how the American economy flourished during the 1950-70’s, creating the strongest middle class in history because we removed discriminatory barriers that kept many people of color and women out of the U.S. economy. The growth was halted in the 1980’s due to new government and corporate policies and has since led to a steady decline in the American middle class.
Unfortunately, the economic fallout of the COVID-19 pandemic is only adding to the decline. As Jim told us on the podcast, those in the middle class were just barely starting to reach a full recovery from the damage suffered during the 2001 recession and 2008 financial crisis when the pandemic hit. The pandemic has caused — and will continue to cause — another period of devastating economic hardship, specifically amongst minority communities. As we begin to turn our eyes to recovery, Jim thinks it is critical that the economy is rebuilt with a focus on inclusive growth that will create not only a resurgent economy, but an empowered middle class.
In addition to the moral imperative, there is also an economic motivation for inclusive growth. As Jim noted, “The economy does best when everyone gets ahead. It is not a zero-sum game.” By empowering people to fully make use of their talents — unencumbered by discrimination — economic growth can be unlocked as individuals achieve their true potential. This starts with reassessing corporate hiring practices and instituting aggressive anti-discrimination efforts. Jim talked about the need to affirmatively ensure hiring pipelines are not exclusionary while simultaneously supporting employees once they have a foot in the door. He noted that many companies made big efforts in the 1960s as part of the Civil Rights Movement to diversify who they hired and it paid dividends.
Alongside anti-discrimination efforts, empowering women in the workplace, massively improving the access and quality of education, and reducing unnecessary regulations will be crucial to unlocking the next wave of economic growth. Specifically, taking a supply-and-demand approach to child care and quality could yield better results for working mothers, and eliminating anti-competitive occupational licensing requirements could make certain jobs more accessible to those who are qualified.
As Jim noted, these policies are not ideologically driven, and no matter where you come from on the political spectrum, there is an appealing route to solving these issues. As we look to the future, it is only through reexamining how the economy can be more inclusive that we can truly deliver socially just outcomes and economic growth for all.