WASHINGTON – The 1960s paradigm of middle class workers serving as the “sacred trust” of the business world is declining in significance and practice, a panel of scholars and journalists discussed at the Urban Institute Tuesday.

“We’ve moved from the stake-holder capitalism that Charlie Wilson [one time General Motors CEO] and company believed in to [a] share-holder capitalism,” award-winning journalist Hedrick Smith said.  “You’re focus as the CEO—as everyone knows—is on the stock price…there is a tension between profit margins and wages, so flat wages are carrying on.”

The average wage of a male worker, taking inflation into account, was identical in 2011 with wages in 1978, Smith said.  Norman Ornstein, a senior scholar at the conservative American Enterprise Institute, believes lack of middle class progress is connected with the gridlock in Congress.

“Basically, this is not just partisan and ideological polarization: it has become tribal in nature,” Ornstein said.  “Every time you put together a group spanning the ideological spectrum outside of — even inside — Congress…they come up with the same template but you can’t get anywhere.”

Gridlock is not just happening in Congress.

Randolph Penner, an Urban Institute fellow, noticed that within the business world there is disagreement on how to compensate middle class employees in comparison to what top company executives make.

“Unity in the business community is a rare thing,” Penner said.  “Within the business sector, much of the rewards and economic growth have gone to the highest [executives].”

 Aside from specific solutions for stopping middle class decline, Smith believes that the concerns of middle-income Americans and the ineffectiveness of Congress affect everyone.

“We’ve had a shift in thinking and we’ve certainly had a shift in the power situation in Washington which has left us with an economy with enormous inequalities which several economic studies tell us is bad for economic growth” said Smith, author of “Who Stole the American Dream.”  “It’s not only bad for the middle class, it’s not only bad for the health of American democracy: it’s bad for economic growth for everybody.”