By many important indicators, the American economy is soaring. Unemployment has hit a 30-year low, and productivity is on the rise. These two factors, combined with low inflation, have finally started to push up real wages for most workers. Yet below the surface, conditions are not so encouraging on the economic front and even less so on the broader social-cultural front. As “globalization” increases the pressure on the U.S. economy, the American family is feeling the strain. And as the family fails, the culture implodes.

The pay of the typical worker in mid-1998 was still not as high as it was in 1989, the year of the last business-cycle peak. When the business cycle next turns, the average American worker may find he has not gained much from the seven “fat years” of the 1990’s. This is particularly true for men. The wage of the median male has fallen 0.5 percent per year since 1989. Most of the loss was during the 1989-96 period, when the median male wage fell 1.1 percent annually. Strong growth in the last two years has helped low-wage male workers regain some of the ground lost, but their annual income from wages in the first half of 1998 was still about $1,000 below that of 1989. And it should be remembered that wages in 1989 were lower than in 1979, having fallen an average of 0.2 percent per year during the 1980’s.

The wage of the median female worker, which rose consistently during the 1980’s, fell 0.2 percent per year from 1989 to 1996. Wage increases over the last 18 months, however, yielded a 0.3 percent annual growth rate over the Rill period. Thus female workers lost less during the 1989-1996 period and have gained more since 1996. While median male workers’ real wages fell about 6.7 percent over the 1989-97 period, women’s wages increased slightly.

Including non-wage fringe benefits, such as health care and pensions, does not change the overall picture. The hourly cost of benefits grew slightly faster than wages in the 1980’s, but slightly slower than wages in the 1990’s (primarily due to health-care cost-containment efforts). Moreover, the share of workers receiving employer-provided health care declined 7.6 percent between 1979 and 1997.

This may explain the “angry man” antiestablishment politics of the early 1990’s, when President Bush was defeated by “the economy, stupid” in 1992 and the Democratic Congress was overthrown in 1994. It also helps explain why working women have been more supportive of President Clinton than have been men: Women fared better during Clinton’s first term than did men.

The increasing role of female workers in “saving” both families and male workers from substantial declines in material living standards was seen most dramatically in the 1980’s. After a large increase in the annual hours of paid work in 1979-89, many working families had few additional hours to devote to work. Wives and mothers entered the workforce in large numbers in the 1980’s, but this shift had run its course by the end of the decade. In 1975, only 38 percent of mothers with children under the age of six were working; by 1990, this had reached 60 percent. It now stands at about 65 percent. Surveys consistently report that mothers would prefer to stay home and care for their children, but they have been pushed into the workplace to support the family budget.

The social costs of this shift from mother to worker have been enormous. Much of the decline in discipline, so evident in the deterioration of school performance and in public behavior, can be traced to lack of parental supervision. Peer-group pressure and the media fill the gap. Parental responsibility has been transferred to the schools, where teachers and administrators complain of having to spend instructional time on problems more appropriately handled at home. Besides the improper burden being placed on the schools by this trend, the kind of advice that politically correct schools provide to young people must give us pause.

For decades, radical educators have vied with parents for control of children’s lives. Nothing could have better aided the educators than to have their opponents taken from the fight and consigned to the workplace. Parents at work not only cannot supervise their children after school, they cannot supervise the classrooms during school. In the attempt to provide a better material life for their children, working parents are sacrificing their responsibility for developing the character and values of their children.

Conservatives, above all others, should be concerned with this trend, yet few have made the connection between economic transformation and the family crises. Conservative political leaders often trumpet statistics on job creation and on how a larger share of the American population works compared to other countries as examples of the power of “free-market” capitalism. Then, a couple of paragraphs down, the same speakers will deplore the decline in educational standards and the rise in immoral behavior among the young as if these developments were an entirely separate subject. Indeed, there are those on the political right who argue that the Republican Party should concentrate entirely on economic issues and abandon “social” issues as too difficult and controversial.

Those advocating this free-market orientation most loudly are the very people responsible for the transformation of the economy and the resulting social problems. A Fortune magazine cover story published as the new GOP Congress opened in 1995 expressed alarm that it might be dominated by “small business populists and the religious right.” Last summer, the Business-Industry PAC, which advises big business on which candidates to support, complained that the GOP was “coddling social conservatives” and not being “reliably pro-business.” The demand from business was to drop the “culture war” and instead enact an assortment of “free trade” measures—or risk a loss of contributions. House Speaker Newt Gingrich immediately sought to comply, but was stymied by an ad hoc coalition of labor Democrats and Republican nationalists.

The fear on Wall Street is that a serious attempt to address the agenda of social conservatives will lead to constraints on business. And Wall Street is right.

The core of the domestic social problem is linked to the international restructuring of the economy, though obviously this is not its only cause. Economic theory tells us that full employment can be reached at any level of income, and will move toward this equilibrium in the absence of external shocks if the labor market is flexible enough. “Flexible” means that wages must be capable of moving down as well as up, to keep production costs down when the markets for the products are fiercely competitive —as global markets are. Indeed, the stock market has tended to drop in reaction to any announcement that wages are rising.

There are several ways to make wage costs flexible downward. Within a domestic industry, wages for existing positions can be constrained. On an interregional or international level, jobs can be shifted to other labor markets where equilibrium wages are lower (and the threat to do so can be used to suppress wage increases at home). In terms of the total economy, the mix of jobs can be changed to one favoring low-wage work. All three have occurred in the United States.

In the manufacturing sector, employment dropped by 2.5 million positions between 1979 and 1997. The sector which added the most jobs (7.1 million) during this same period was retail sales. The typical manufacturing job pays double that of retail sales and usually comes with substantial health and retirement benefits which most retail sales positions lack. Manufacturing jobs are also primarily a male domain, while retail sales have been dominated by women. In shorthand form, rather than produce goods, people are hired to sell what has been produced elsewhere.

Displaced factory workers face difficulties finding new employment; more than one-third were out of work one to three years after their displacement. When they do find work, their new jobs pay, on average, about 13 percent less than the jobs they lost, and more than one-fourth of those who had health insurance on their old jobs do not have it at their new ones.

This shift did not occur because Americans bought fewer manufactured goods, but because they substituted foreign- produced goods for domestic-produced goods. In 1982, imported goods equaled only 15.3 percent of domestic production; by 1997, imports were up to 39.3 percent of domestic production. The drop in demand for labor in domestic manufacturing reduced the workforce needed and put downward pressure on industrial wages. Those who lost their jobs in manufacturing moved to other sectors, increasing the supply of labor there, which also pushed down wage rates to “clear the market” and create new jobs. Thus, weekly earnings in both the manufacturing sector and the service sector have shown declines.

Markets operate on the margin, so even small changes can have large effects. For example, the worst recession of recent years was in 1982, when unemployment hit 9.6 percent. Today’s prosperity has taken unemployment down to 4.6 percent —a difference between boom and bust of five percent of the workforce. During this same period, manufacturing jobs dropped from 22 percent of the workforce to only 17 percent; again, a margin of five percent. The negative impact of the loss of manufacturing jobs is multiplied if we take into consideration the effect that it has had on other jobs, including service jobs, which are linked to industry. This affects not just blue-collar labor but white-collar management slots as well, in everything from transportation and waste disposal to engineering and accounting.

Unfortunately, the left-wing ideological agenda dovetails nicely with the “self-interest” of Wall Street. Shortly after World War II, the United Nations Educational, Scientific, and Cultural Organization (UNESCO) was created with money contributed by the National Education Association (NEA) and the Carnegie Foundation. It distributes a steady stream of studies and teachers’ guides on the theme that “it is frequently the family that infects the child with extreme nationalism. The school should therefore . . . combat family attitudes.” Through “peace studies,” “multiculturalism,” “values clarification,” and “sex education,” a program has been crafted to strip children of all loyalty to any higher institutions or belief systems beyond their own desires. Personal gratification, sexual and material, is all that counts. The child is to be molded into the perfect consumer and be indifferent to anything else. Moral constraints on behavior or calls to community duties that would interfere with this “pursuit of happiness” are to be shunned. Greed and selfishness are not the building blocks of patriotism.

They are, however, the building blocks of corporate profits. The antidote to a “free-trade” world run by transnational business is the doctrine of economic nationalism, which seeks to maximize the resources, both moral and material, of a given society. In such a system, business prospers only to the extent that its actions are compatible with these larger objectives. The left is correct to see the family as the origin of the community and the nation-state. An economic system that breaks up the family and empowers radicals in the media and the schools to replace parents suits those business firms which fear any national interest limitations on their activities.

A few years before he joined the Clinton administration as an assistant secretary of defense, Joseph S. Nye of Harvard wrote about the global “interdependence rhetoric” used by liberals. He noted that adherents of this doctrine “usually argue that conflicts of interest are reduced by interdependence, and that cooperation alone holds the answer to world problems.” The rhetoric, Nye continues, is “to be used against both economic nationalism at home and assertive challengers abroad.” The Clinton administration has emerged as the perfect synthesis of liberal ideology and corporate ambition, built on the doctrine of “globalization.”

Social conservatives cannot be indifferent to the choices that the country faces in economic policy. The old fusion between economic and social conservatives, where each paid lip service to the other but generally kept to themselves, became untenable when the nature of the economy changed. Globalization has pushed the agenda of the economic conservatives off the deep end, to the point where the term “conservative” no longer properly applies.

Yet social conservatives cannot simply denounce materialism. Joseph Schumpeter may have been correct when he said “the stock market is a poor substitute for the Holy Grail,” but too many people are now wedded to the Dow Jones. Instead, social conservatives must recreate a viable fusion between economics and culture which can promise both prosperity and morality. The first step is to understand that the current economic situation is not optimal, and that this shortcoming opens the door to cultural decline. Economic nationalism, not corporate globalization, is the path to “making America great again” as a civilization that can be admired in all of its facets.