The Big Squeeze: How Americans Are Being Crushed by Financial Insecurity and Doubt


The Great Recession officially started in December 2007 and ended in June 2009. It was the gravest financial crisis the nation has faced since the Great Depression of the 1930s. Sadly, most Americans have yet to recover.

It fostered what many call the “new normal,” the unspoken sense that America is stuck if not in decline. This new sensibility bears profound consequences; foremost is the recognition that Americans are living lives of lowered expectation and intensified financial uncertainty.

The “American Century” is over. The great historical phase of America’s domestic prosperity and global hegemony is withering. In the decades following the Second World War, American capitalism fashioned the postmodern, and increasingly globalized, world order. In the process, it abandoned America and the American people.  

We first witnessed the transfer of jobs overseas, rationalized as “throwaway” or low-skilled jobs. Then came the growing dependency of foreign borrowing, rationalized by the U.S.’s ostensible credit worthiness. Now, America’s great corporations, like GE and GM, are earning more overseas than at home, accompanied by generous domestic tax breaks. More disturbing, the U.S. military-industrial-political establishment repeatedly embarks on doomed “great war” campaigns that rob the nation of its young, its wealth and its ideals.

Domestically, over the last three decades the rich have systematically expropriated the middle-class’s sizable and hard-earned wealth. It has been the most massive transfer of wealth in the nation’s history, with the gravest consequences. It has been a period of legalized robbery.

The decades following WWII witnessed the middle-class accumulating significant wealth as measured in the pride of home ownership, the glamour of a new car, the accomplishment of sending one’s kid to college, the security of good health and assured retirement. It was a period marked by the narrowest income gap separating the rich and the poor in the nation’s history. It fostered the great social, legal, technological and cultural movements that distinguish the post-war era -- civil rights, Roe v. Wade, a man on the moon and the counterculture.  

Today, the U.S. is stuck, confronting an historical sea change. Most Americans live at the intersection of earning the next dollar and paying the latest bill. This is the powerful vice of the Big Squeeze, of financial uncertainty and doubt, of living holding one’s breath.  

Nearly everyone feels squeezed by the Big Squeeze, excepting, of course, those rolling in dough or too naïve to care. A November 2010 Rasmussen poll found that just over one-third (37 percent) of respondents believe America’s best days are still ahead; sadly, nearly half (47 percent) said the nation’s best days were in the past.  A recent New York Times front-page article announced: “New Poll Shows Darkening Mood Across America.”  [NYT, April 22, 2011]

Capitalism is being restructured, and in the process, Americans are being disciplined, forced to accept a poorer quality of life. The process of social and personal “reeducation” now being imposed on the vast majority of Americans is the Great Squeeze, it is the process of accepting a qualitatively more miserable life.

* * *

Big Squeeze is revealed in many ways. The clearest examples are the key economic indicators, particularly those detailing the growing income gap and the resulting social consequences. In a recent report, the Economic Policy Institute (EPI) finds that, "since 1983 the top 5% of wealth holders consistently held more than 50% of all wealth, but the share increased from 56.1% in 1983 to 63.5% in 2009. The bottom 80% of wealth holders consistently held less than 20% of all wealth, but the share declined from 18.7% in 1983 to 12.8% in 2009."

In simplest terms, the rich have gotten richer, amassing an ever-greater share of social wealth, while the rest of us, especially the poor, have gotten poorer.

EPI’s findings lay out the broad terrain on which the Big Squeeze is played out. More disturbing are the innumerable ways it is experienced in the lives of ordinary Americans.

First and foremost of these ways is the growing wage gap. The U.S. Census Bureau found that while the GDP increased nearly three-fold between 1970 and 2000 (from $3.8 trillion to $9.8 trillion), the average "real weekly wage" fell by 14 percent between 1970 and 1996.  The following table documents this income stagnation.





Poorest (lowest 20%




Median (50%)




Wealthiest (top 5%)




Source: U.S. Census Bureau, 2004

As EPI notes, “the typical worker has had stagnating wages for a long time, despite enjoying some wage growth during the economic recovery of the late 1990s.” In the wake of the Great Recession, this situation has only gotten worse.

To compensate for the erosion of earnings among male head-of-household workers, American society adjusted. First, women entered the workforce in ever growing numbers, helping launch the second-generation women’s movement and normalizing the two-income household. Second, Americans went into debt, big-time.  

The U.S. Labor Department estimates the female workforce participation grew from two-fifths (40 percent) in 1975 to three-fifth (60 percent) in 2008.  It reminds us: “The long-term increase in the female labor force largely reflects the greater frequency of paid work among mothers.”  

The income stagnation that affected the vast majority of Americans and characterized the period between 1970 and 2000 was hidden in the gluttony of consumerism. Average consumption per person increased 66 percent during this three-decade period. To pay for this fictitious luxury, Americans went into debt.

During the latter decades of the 20th century, personal debt incurred in home mortgages, car loans, tuition loans and credit-card purchases soared. The Federal Reserve estimated total household debt in 2010 at $13.4 trillion or 116 percent of disposable income; reflecting the Big Squeeze, household debt has declined from the peak year of 2007 – the year before the bubble burst -- when it reached 130 percent. Debt should continue to erode as people hold onto the little they make.

The days of consumer gluttony are over. The ranks of the unemployed and the underemployed are estimated at 14 million. Older workers, including those with a college degree, are especially vulnerable, even those willing to take lower-wage jobs to simply hold on. Lower-skilled younger adults between 18 to 34 years, especially minority people, have witnessed the largest jump in poverty. This has led many to double-up in housing with parents, friends and loved ones, let alone growing numbers calling their car home and, finally, the increasing number of the homeless.

The Big Squeeze is taking its toll on all aspects of the lives of a growing number of Americans. Home ownership is down, as is the savings rate. However, there has been a significant increase in the number of U.S. households receiving food stamps and visiting food banks.

The area of personal life taking the biggest hit is health care, as reflected in the rise in the uninsured and emergency room visits. A 2009 report by the American Optometric Association found more than a third (36 percent) of Americans are limiting their doctor visits, including 63 percent cutting dental visits, 59 percent cutting visits to primary care physician and 52 percent cutting visits to eye doctors. Two years later, things have surely gotten worse. The failure to provide quality health care to a growing segment of Americans will have the gravest impact on the nation’s long-term development.

* * *

Progressive resistance to the Big Squeeze has been slow in coming. The Tea Party movement expressed the first round of popular rage, reflecting the genuine fears of a segment of the aging, insecure, white (often racist) and conservative Christian populace. It screamed loud and was heard.

However, having been organized and funded by well-financed conservative and Republican operatives, the politicians and legislative solutions it championed are turning out to only make worse the lives of an increasing number of the more vulnerable Tea Party proponents. Tea Party ideology and politics is being exposed as a con job.

The response among more self-conscious progressives, the broad moderate citizenry (i.e., the majority of the voting public) and decent, apolitical Americans, has been slow to come to a boil. In light of the uprising in Madison and the growing number of angry constituents greeting Republican Congressmen throughout the country, political resistance is beginning to bubble up.

There is, however, a form of resistance that takes place everyday, but is invisible to the media and traditional political analysis. It occurs at the friction points of the Big Squeeze, where the values and/or authority of the more middle-class or managerial sector rubs up against the reality lived by poor and low-wage working Americans. These are the junctures where everyday class power is exercised and inchoate social struggle is waged.

Lisa Dodson’s recent book, The Moral Underground, analyzes the friction points played out in the social relations that define low-wage jobs, in the classroom and in healthcare institutions. They are the settings where Americans confront profound, often deeply perplexing, moral challenges. These moral confrontations involve those on both sides of the economic and power divide.

Dodson calls these points of resistance to the Big Squeeze the “moral underground.” Everyday, those with power, including managers, supervisors, teachers and health care professionals – and the list can go on and on – make decisions that determine the fate of employees, students or the ill and their families. Dodson sees these points of friction serving as moments for moral resistance to the dictates of business-as-usual. For those in authority, subverting corporate protocols and procedures can involve risking their jobs. And they are doing it.

Resistance to the Big Squeeze will likely intensify over the next two years as the nation builds to the 2012 election. The most visible form of this resistance will likely be protest marches, strikes and other public demonstrations. A new, emboldened progressive movement may well take shape.

As this occurs, we shouldn’t lose sight of the more invisible, but mounting, resistance of the moral underground. As it grows, it may undermine one of the great social fictions grounding American capitalism: That one leaves one’s morals and politics at the office, factory or store door when one enters the job site. This fiction is based on the well-propagated notion that when one sells one’s labor power one leaves one’s personal beliefs and values at home.  This social fiction is crumbling under the pressure of the Big Squeeze.

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