Destroying the middle class

Today you hear a lot about how the separation between the rich and poor in America is widening and that the middle class is being wiped out.  For the left, the problem is the rich, out of their own greed, are preventing the poor from moving up.  To me however the problem is not caused by the rich, but instead by government regulation. 

In the past, America had  a very vibrant and health middle class.   Our structure was one of a series of "steps" ranging from  poor, lower-middle, middle, upper-middle, and rich.  Each step was within "reach" of the previous step allowing people to move up (and in some cases down) with little difficulty.  A poor person could work a simple factor job and work their way up to more skilled position and enter the middle class.  A lower-middle-income person could open up a small business out of their car or garage.  After some time they can work their business up to a level of opening up a shop.  They could hire extra help and work their business up to where they could afford to expand to multiple locations and within time if they desired take company to a more national level and enter the rich class of America.  Success stories like that of Dave Thomas the founder of "Wendy's" restaurants, who started with literally nothing and became a millionaire by working his way up through the restaurant business and later starting his own chain, were common place.

Enter the "nanny state" in which the government, for our own "protection", adds business regulations.  These regulations limit things such as where you can set up your business.  You want to use your garage?  Forget it!  You want to sell things out of your car on the street?  Don't even think about it!   Other regulations limit WHO can open up a business and who cannot.  You want to braid hair?   In the state of Illinois you will need 1000 hours of training and $15,000 of education to obtain a cosmetology degree before you can do that.  And all to often, those you create such regulations are already in the business and use the government as a way to keep competition low.These regulations remove the lower rungs of the economic ladder (see below).

 This makes it MORE difficult for the poor to take that "first step" in the economic ladder towards a better life.  While some of these regulations seem non-intrusive to you or me, to someone who is heavy in debt and has little in their savings (if they have any at all), even a small $100 license fee can seem insurmountable.

But it doesn't stop there.   For even the Middle class trying to make it into the "rich" class, regulation can be used to impede their progress. In the early 1900's one could hire workers on as little as a "handshake and a promise".   But today, without litigation-happy society, this is a mere dream.   Employers must have employee contracts detailing, how they will be paid, how they will be evaluated, what their duties will be, what their "rights are", how much time off they will get etc...  Also with regulations being added to them a break-neck speeds, employers must hire hosts of lawyers and accountants to help them keep up and navigate the regulation complexities and nuances.   For established corporations these lawyers are a drop in they proverbial bucket, but for the business owner just starting out, these costs reduce their ability to hire lower skilled workers they need to build, package, ship and bill. 









 And so with fewer people able to ENTER the middle class from the poor-class, the middle class is literally "dying off" over time.

Finally,  because we allow illegal immigrants to enter our country we are "growing" the poor class by adding to them at alarming rates.  Therefore the "poor" class is growing while the middle class is ever shrinking.