There was a time, not so long ago, when cars supposedly personified the American character. Our aggression, our style, our rugged independence. In the last 30 years, the automobile has faded slightly in the American imagination, but today the car industry does, in fact, explain the American economy. [...]
To begin this story, let's appreciate the big picture. The car economy, a small but mighty sliver of American industry, has been on a roll. Since 2009, car production has nearly doubled, accounting for between 15 and 20 percent of our whole recovery. [...]
Plutocracy in the car market isn't unique, but rather illustrative. There is “no such animal as the U.S. consumer,” three Citigroup analysts concluded in the heart of the real estate boom in 2005. Instead, we have the rich and the rest. As Don Peck wrote in his summer 2011 cover story for The Atlantic, for many industries, "the rest" just don't matter:
All the action in the American economy was at the top: the richest 1 percent of households earned as much each year as the bottom 60 percent put together; they possessed as much wealth as the bottom 90 percent; and with each passing year, a greater share of the nation’s treasure was flowing through their hands and into their pockets. It was this segment of the population, almost exclusively, that held the key to future growth and future returns. |
The last two years have done nothing to make those Citigroup economists look anything less than prophetic. Middle-income jobs (like, say, auto-parts workers) made up 60 percent of jobs lost in the recession, but lower-wage occupations have accounted for about 60 percent of jobs gained the recovery. The auto recovery, like the U.S. recovery, is built on a fragile assumption: The rich can be rich enough for the rest of us.
The amazing car comeback has not translated into equally amazing jobs. Auto manufacturing employment is up since 2009, but whereas the motor industry has accounted for 15 to 20 percent of economic growth, it's accounted for just 2 to 3 percent of job growth. [...]
The modern auto recovery is, over all, a sensational story. We need growth, and we're getting more of it from cars than perhaps another other industry.
But unpacking this story reveals a more frightening picture of American industry and productivity. In the mid-20th century, a strange and wonderful blip of good fortune for the American middle class, unions concentrated in the manufacturing sector helped millions of American families achieve healthy and rising wages, thanks to collective bargaining and a burgeoning industry that wasn't yet automated or globalized. But that story is over.
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