A homeless man walks down the street in the downtown Skid Row area of Los Angeles (Photo by David McNew/Getty Images)

June 22, 2021   5 mins

In recent history, the United States has arguably never been so divided — but not in the way you might think. Yes, the country has been split by the culture wars, with their polarising focus on race and gender. But behind the scenes, another conflict has been brewing; shaped by the economics of class, it has created two Americas increasingly in conflict.

The First America is made up of the highly educated and affluent, who have already managed to recover their pandemic-depleted incomes. Its biggest winners, though, have been large tech firms — notably Facebook, Apple, Amazon, Microsoft and Google — who together have added more than two and a half trillion dollars to their valuation since 2019, and last year enjoyed record breaking profits.

In contrast, the Second America, made up of the working and private-sector middle classes, has been devastated by the pandemic, with more than half of small businesses unlikely to fully recover. Meanwhile, the expanding serf class, many of whom were employed in small businesses, has become increasingly dependent on handouts from Washington and bloated state governments, so much so that it has made little sense for many to go back to work.

At stake, increasingly, is the future of America as an aspirational country. Traditionally, the growing gap between the rich and the other classes would be fodder for a Left-wing bonfire, but the progressive Left now gets much of its funding from the corporate elite, notably Silicon Valley and Wall Street. The oligarchy not only funded Biden’s campaign, but, particularly in the case of Facebook’s Mark Zuckerberg, leant critical support to boost the November electoral turnout.

Taking on the oligarchy, therefore, has not been Biden’s priority, at least to date. Rather than focus on traditional working-class concerns, he has been swept up by the cultural memes of the HR departments, newsrooms and faculty lounges. The results have been all too predictable: draconian energy policies, the racialisation of education and support for public sector unions, the one arguably working-class bastion for the Democrats.

But in the long run, this may not constitute smart politics. The politically correct agenda of the progressive activists, at least according to a survey conducted by the non-partisan More in Common group, inspires the loyalty of barely 8% of the electorate. Another recent study found that 80% of all Americans, including large majorities of millennials and racial minorities, find the “politically correct” politics “dangerous”. And so Washington’s aggressively discriminatory policies — such as steering aid to farmers based on race — are unlikely to connect with most Americans, as are attempts to impose “anti-racist” programming in companies and schools, suggesting that to be white is equivalent to having disease. There’s also considerable scepticism about this approach among America’s minorities, whose priorities don’t concern compensation for past evils but a better life for their families.

Indeed, pushback against the progressive agenda has been growing among the two fastest growing minorities, Asians, and Hispanics. Asian communities may be feeling the sting of racial resentment, and were until recently tilting towards the Democrats, but last year they began shifting back to the centre-right, even in California. This stems in part from their opposition to race quotas, which work against this often over-achieving population. Asians are also over-represented among the ranks of homeowners and small businesses, which are less able to cope with progressive regulation and were in the crosshairs of the recent surge of urban violence.

Similarly, Hispanics also appear to be moving more towards the Republicans. They gave a larger share of their votes to the “racist” ogre Donald Trump, and just elected a GOP Mayor in McAllen, a heavily Democratic, overwhelming Latino border city. Hispanics often work in industries such as manufacturing and construction that often struggle under progressive energy and planning policies. To put it simply, they are — just like the Asian communities now looking Rightwards — increasingly in the Second America.

The Biden Administration, meanwhile, seems blissfully unaware of the emergence of two Americas. The Biden cabinet is overwhelmingly made up of elite-school educated, coastal big city denizensa third of the new cabinet went to Harvard — with little representation from the South, the evangelical community or the Plains (agriculture secretary Tom Vilsack is the exception).

Meanwhile, policies like lavish funding for mass transit and restrictions on single-family homes may appeal to those at the top of the pyramid, but workers seem ready to resist attempts to force them back into long commutes and small flats. Likewise, Biden’s affiliation with the dense Northeast seems utterly out-of-sync with a country where the “hot” metros in America — in terms of jobs and migration — are no longer the agglomerations around San Francisco, LA or New York, but places like Dallas-Fort, Salt Lake City, Columbus, Indianapolis and Des Moines. Between September 2019 and September 2020, the biggest job losses, according to the firm American Communities and based on federal data,  have been in big cities, while rural areas suffered 6% and exurbs by less than 5%. Virtually all the highest unemployment rates are in coastal red states, while the lowest tend to be in central and southern states.

How the current administration responds to the emerging economic reality — and the potential rise of a Second America — may prove decisive. The deep-seated labour shortages, particularly evident in industry, are largely the product of low labour force growth and a sinking birthrate. These shortfalls create a unique opportunity for working-class Americans. Before the pandemic, wages for lower income labourers were rising for the first time in decades. Today, even with high unemployment over 6%, and over 8 million fewer positions, there are 7.4 million unfilled jobs.

Ultimately, Biden could help Americans most by adopting at least some of the Trumpian programme on issues such as trade and domestic manufacturing. This is more than just good policy; it’s good politics. A recent survey by the Left-leaning Center for American Progress found that far more Americans prioritise protecting US jobs and reducing illegal immigration than such progressive mainstays as draconian policies on climate change and improving relations with allies.

Of course, any Biden effort to adopt populist approaches will face resistance from many of the corporate entities which supported him. Apple’s Tim Cook can pose as a progressive Green visionary, but will fight for his right to employ brutalised Chinese labour, and use factories powered largely by coal power. Progressive oligarchs have been unsurprisingly uncritical of things as Chinese slave labour, the assault on Hong Kong and the repression of Uighurs. The money, technical expertise and media power of these oligarchs are far from trivial. But these once widely admired tech moguls are now increasingly feared by the public and have stirred concerns both among Left-wing activists and a growing number of conservatives who recognise that they represent not the paragons of capitalism but its privileged undertakers.

There is clearly powerful support for restraining the tech monopolies; their growing penchant for censorship over issues like Covid, race or the environment. But if Biden instead follows his establishment backers, only the Republicans will benefit. Yet even the Republicans could eventually come off worse. In their embrace of nativism, a pernicious aspect of Trumpism, they may face problems with their much anticipated rebranding as the new working-class party of Second America, given that by 2032 more than half of working people in America will come from racial minorities.

As the divide between the oligarchs and the people becomes ever more evident, the battle between the two Americas — one more numerous, but the other far better funded and media savvy — will determine our country’s future. The early 20th Century showed that populist elements could transcend traditional party labels, and find common ground to restore America’s traditional promise. But that requires a leader, in either party, to stand up for the majority of Americans against a relentless ruling elite seeking to extend ever more its suffocating grip. Until then, the United States will remain split in two — with the Second America increasingly forgotten.

Joel Kotkin is the Hobbs Presidential Fellow in Urban Futures at Chapman University and author, most recently, of The Coming of Neo-Feudalism: A Warning to the Global Middle Class (Encounter)