Reihan Salam says the GOP can “win the working class and save the American Dream.” Will business and the working class really align, or are conservatives themselves dreaming?

Question: What threatens the American Dream?

Reihan Salam: Well we had a fairly broad conversation in the book about that, about family structure in particular, and when you look at the changing family structure, the most interesting thing is that it’s changed unevenly, so you have this huge explosion in divorce in the 60’s and 70’s, but that explosion really stopped and then reversed for folks who are college educated, folks who are middle-class and upper middle-class, but then for people who aren’t, for people who have a high school education or less, actually, the divorce rate remained persistently stubbornly high or the rate of folks who were having children outside the context of marriage remains quite, quite high, and that has all kinds of implications for reinforcing class divides and I think of that as a really big problem, but of course there is another problem of this kind of radically changed set of economic circumstances that has led to wage stagnation, not only for the bottom half of the population, but actually for most of the population.

During the Bush years workers with a college education saw their wages stagnate. It’s quite extraordinary, and we always hope that innovation will save us, but well, what if innovation doesn’t actually save us in the sense of creating tens of millions of well-paying middle-class jobs, particularly given that we’re living in a world in which you have this so called global labor glut? We’re living in very different circumstances, yet again our institutions haven’t evolved quickly enough to accommodate that, and that I think of as a real threat to the American working class.

Question: Can the interests of business and the working class ever truly mesh?

Reihan Salam: I definitely think that the interests of business and the working class could be aligned, but it’s very complicated because for example you’re looking at an environment in which when you look at corporate profits, they were oftentimes flourishing by virtue of investments made in other countries where there are lots of attractive investment opportunities, whereas when you’re looking at the American workforce there are a lot of liabilities. There are a lot of liabilities in all First-World workforces given that you have an older age profile. You have a skill profile that oftentimes isn’t quite as resilient, so I think that that is a way in which it appears as though those two interests have diverged to some degree. At the same time I think that it’s useful to think of these things as not entirely separate because, again, members of the American working class start businesses and I think would start more businesses if you had an environment that was more conducive to grassroots entrepreneurship.

When you look at China, they have this kind of interesting dilemma where in the 80’s they had very rapid economic growth, just as they did post the 80’s, yet then it was very broad based. You saw a lot of rural areas and it was fueled by grassroots entrepreneurship, whereas since then it’s been fueled by state-owned enterprises and foreign direct investment. In America we have a similar thing where if you don’t create an environment that’s conducive to people kind of trying things and failing, starting new businesses, kind of large employers, and you don’t have the level of innovation that could theoretically create those dramatic wage and productivity gains that we actually need, so in a weird way what I want to see is more a culture in which business and the working class are not these two kind of separate entities, but rather they kind of interweave, in which more people who kind of come from a working-class, modest background feel as though, you know, I could actually start something that’s going to make a contribution to the world. So that is sort of a different way of looking at it, but I think it’s the right way of looking at it.

Recorded on November 16, 2009
Interviewed by Austin Allen