“Globalization was the driving force behind the growth miracle in emerging markets, lifting millions of people out of poverty over the past few decades. Now, a backlash against how the global income pie has been divided up is increasingly influencing the political affairs of developed markets…Globalization constituted a massive labor supply shock, allowing corporations to tap cheaper workers. The benefit to consumers in advanced economies took the form of downward price pressures on these goods. Along the way, however, the middle classes in developed nations failed to see this rising tide lift their boats.” — Luke Kawa, Bloomberg.
For years if not decades, working class and middle class economic stagnation was masked by easy access to credit, especially in the housing market. But the collapse of the housing and credit markets in the US, during the Great Recession 2008-2013, led to record foreclosures and bankruptcies. Though wages are up slightly and unemployment is down in 2016, the working class and middle class have never fully recovered.