The shrinking size of the middle class and the growing gulf between the rich and the poor have received plenty of attention, but we’ve paid too little notice to the historical background.
The United States has commonly been viewed as a classless society, but certainly not because of the absence of differences in the wealth or economic condition of its citizens. With the rapid industrialization of the country following the Civil War, these differences became much more significant. With the dawn of the 20th century, President Theodore Roosevelt, among others, realized that without some federal governmental regulation, socialism lurked in the country’s future.
Although the first President Roosevelt riled those who opposed change, Franklin Delano Roosevelt, who instituted a New Deal to cope with the Depression of the 1930s, was accused of destroying the capitalistic order. More than any other New Deal legislation, the Social Security Act of 1935 – with its old-age pensions, aid to dependents and unemployment insurance – carved out a new and necessary role for the federal government.
In his second inaugural address in 1937, FDR noted that a third of the nation was still “ill-housed, ill-clad, ill-nourished,” adding that it was the federal government’s responsibility to respond to such needs. The coming of war did not completely submerge the reform spirit. For instance, FDR in January 1942 called for a new economic bill of rights, including the “the right to fair pay … the right to adequate food, clothing, shelter and medical care … the right to education … and the right to equality before the law.”
To push such an agenda through Congress was impossible, but surprisingly some provisions working toward those ends became law in the GI Bill of 1944. The fascinating story of its passage with its strange assortment of supporters is well-told by Michael J. Bennett in “When Dreams Came True: The GI Bill and the Making of Modern America.” Transforming American society by swelling the middle class, the bill made that life, in large part created by the educational and housing benefits of the legislation, the new norm for Americans. The government had provided a boost, but it had also made an investment that would pay handsome dividends.
The GI Bill’s enormous impact is easily demonstrated. American participation in the war produced about 16 million veterans. Indirect benefits would extend to their spouses and children, thus multiplying the Americans affected by the law. Veterans with no hope of a college education before the war were provided with that option for social mobility. Not only was the cost of education provided but so were allowances for housing and dependents. Veterans took full advantage of this opportunity: almost 73 percent of the males enrolled in colleges and universities at the beginning of the 1946 school year were veterans.
With government paying for the education of veterans, businesses found the talent and skills needed to fill the jobs of the postwar economy. Businesses provided employment, but the government had equipped individuals with the education needed to fill these employment needs.
In addition to the GI Bill’s educational opportunities contributing
to the growth of the middle class, the very definition of middle class was changed by the law’s housing provisions. Home ownership was on its way to becoming the new middle class norm, changing both “where and how Americans lived.” Home building flourished, and new suburbs quickly bordered cities. These suburbs provided not only housing but a way of life that spawned businesses to furnish the homes and feed the growing population.
This middle class, as molded by the GI Bill, is now disappearing. It was given its character in a time of special circumstances that are absent in the current political environment. Politicians, while paying lip service to the declining middle class, summon up horrors of unbalanced budgets and increased taxes against a backdrop of age-old fears of an all-powerful federal government.
When President Obama suggested that the federal government pay for students to attend community colleges, the suggestion was met either by derision or by a claim of insufficient funds. The derision is the result of historical ignorance, and the absence of funds excuse is the result of shortsightedness and skewed priorities.
As for the growing gulf between the rich and the poor, it is destined to widen. The middle class, as we have known it for the past few generations, may well be no more than a historical anomaly.
John E. Semonche is a professor of history emeritus at the University of North Carolina at Chapel Hill.