The “Middle Class” is not helping the economy grow because presently they are in debt to banks (ex: credit cards, line of credits, and mortgages). In other words, the “Middle Class’s” earnings are paying one lender. It is going from their employer to the bank. That means that their cash is not being dispersed throughout the economy through consumption (which occurred during the “Golden Era” and when most economies were robust). A national and regional economy can only grow if people consume wisely. Being in debt is bad for the economy, good for the lender. This is why economies are shrinking and why markets correct themselves from time to time. If the “Middle Class” (who has the highest purchasing power in an economy -other than the Rich and Wealthy) is not consuming, it means companies and small businesses are missing their profit margins (which is occurring presently). The Rich and Wealthy often shop at “Higher end” retailers, which leaves majority of the others retailers and small businesses outside that “high end” scope, open to the “Middle Class” and the“Working Poor” to prop up and keep open through their earnings. However, since the “Middle Class” is highly in debt to one lender, their money can no longer prop up those retailers and small businesses (who are either closing or moving to other locations where they can meet or exceed their profit margins).
Now, add to the fact that the “Middle Class” is predominately public service sector workers such as nurses, teachers, E.M.S., Firefighters, Social Service Workers, and Cops who earn their wages from public tax dollars and this is the sector that needs to be eliminated in order to disperse the money everywhere. This is why the market is targeting the public sector workers presently so that it can break the unions, allow other workers to enter the workforce, and allow money to be dispersed throughout the economy. Since most public service workers do not own small businesses, this is leaving a huge hole for economies to try and fill (which they cannot) without investment. Since investment will not come without eliminating the public service sector unions we are presently in a quandary.
Furthermore, if foreign investment and corporate investment does not come into the country and the public service sector continues to remain the way they are presently, then post secondary institutes will keenly depend on international students to keep them open since majority of jobs will not be available for post secondary graduates. This will allow “brain drains” to occur since post secondary graduates who are in debt do not have the luxury to be unemployed. “Locally born citizens,” who are witnessing the high amount of unemployed post-secondary graduates in their country and in their region will not allow themselves to enter into post secondary institutes because without an opportunity to work, there is no incentive to go into debt. Presently, most post secondary programs are also being computerized which in other words means they are becoming more online courses and less in class courses. This too brings up the question of why post secondary institutes are receiving government subsidies and why tuition is so high (which will be sorted out in the future with more difficult choices made). Nevertheless, eliminating the unions and bringing in the private sector does create precarious employment but not receiving the private sector and their investments means, no jobs will be available for those unemployed and those currently 16-30 years of age (which is the highest unemployed age group). If a huge underclass of skilled workers remain without work and in debt and the government seems to be accruing debt in order to keep the public service unions in place, then the markets will step in by bringing down the credit rating of that country (since no economy can hold onto so much debt without raising taxes. Since small businesses and corporations will also be closing due to missing their “profit margins”, raising taxes in order to keep the public service workers in place means speeding up more job losses and eliminating many of the smaller business at a expedient pace).
Logically, making the deal with Business might be against what we “morally” feel is correct since it creates job losses, allows for wage freezes, and eliminates unions -however if we do not make the deal with business (and since we cannot stop technology from creeping into our countries and our regions) jobs losses will still occur. If we cannot stop “brain drains” from occurring for people looking for work –our regions and our countries will still be in peril because the dynamic of our country will have changed. If we cannot stop small business owners from closing and we cannot stop corporations from going somewhere cheaper to find cheaper labor, then what is left is an economy that cannot pay its debt off while having a huge underclass of unemployed workers dependent on the government who no longer can afford to pay for programs and services to sustain the large underclass of workers that are dependent on them in order to survive. This situation will allow for austerity measures to be introduced. In other words, either you make that deal now or you make it later. However, making the deal with business later just involves more pain for all involved instead of making the deal now and allowing people to adjust themselves to it accordingly. No one but the public sector union workers placed themselves into debt during the “Golden Age” with their choices, their lifestyles, and their purchases. Instead of asking everyone else to make concessions and sacrifices for them to stay alive, it is time for them to step aside and allow jobs to be created and exist (whether they are high paying jobs or not, they are still jobs that will be created by the private sector and through investment into the region and into the country). Governments can no longer go into debt to prop up their public service union workers. The Cold War is over, the world of the 1950's to the 1990's ended, and with that said, public service unions have been on “borrowed time” since the 1990's and since the end of the Cold War. The rapid increase of Globalization and the expedient advancement of technology world wide has put an end to the public service union workers. It is time the public service union workers woke up to the social reality that faces them. The "good old days" have passed.