The United States is facing two interlinked domestic challenges which are unprecedented in their scope. The first is the rise of the Latino (and, to a lesser extent, Asian) populations as the chief driver of an inexorable shift towards a non-white majority within the next 30 years. The second are the economic changes which make it impossible to fulfil the American Dream for large parts of the white middle classes by assuring them decent and stable middle-class incomes, let alone the steadily rising living standards of previous eras of US history. How Washington responds to these challenges will determine for many decades to come the health of American democracy and the prestige of the American model in the world.

These challenges portend big implications for the Republican Party, as the chief representative of the conservative white middle class. In coming years, it will change radically, or split into different parties, or experience a long period of exclusion from national power. Of course, it could experience some combination of all three processes. This would mark change not seen since the 1930s — or perhaps since the 1850s and 1860s when the existing two-party division of US politics took shape.

The present demographic shift is not unprecedented in its scale. The mass immigration of the late 19th and early 20th centuries, which brought tens of millions of Europeans to the US, and eventually replaced the old white Anglo-Saxon Protestant and Scots-Irish monopoly on power, was even greater. What is unprecedented about the present shift is that so much of it is accounted for by one ethnicity, Latinos, who — unlike Italians, Germans or Poles — will not abandon their own language through assimilation in America; who come from what has traditionally been regarded as a different race; and who, in the case of the Mexicans at least, have a strong sense that large parts of the USA once belonged to their country and were stolen by force. This does not indicate support for secession, but it does give them a growing self-confidence in pressing for increased rights. Within a few years, some of the key territories conquered from Mexico in the mid-19th century will have Latino majorities, including Texas, Arizona and New Mexico.

Another critical way in which the present demographic shift is unprecedented is that it is taking place in circumstances of economic stagnation and relative and often absolute middle class economic decline. The great era of immigration prior to 1924 took place during a period of enormous and relatively steady economic growth. By contrast, from 1924 to 1965 — during the Great Depression and the years of greatest white middle-class growth — immigration was severely restricted.

The decline of middle-class incomes has been especially sharp since the subprime mortgage crisis in 2007–08. But it forms part of a process dating back to the 1970s. By 2012, the US was almost at the bottom of the developed world in terms of social mobility. By 2009, the US male median wage had dropped 28 per cent in real terms since 1970. The shattering effects of the fall were only temporarily ameliorated by the entry of women into the workforce and a flood of cheap — but ultimately unaffordable — credit. Particularly troubling is the fact that even when in recent decades the US economy has been doing well, very few of the benefits have been passed on to the mass of the population. Thus between 2000 and 2008, when the US economy grew considerably, real median income actually declined by 1.6 per cent.

Some of this deterioration in middle class living standards could have been checked by state action in support of industrial development, but much of it seems the result of global economic shifts beyond the power of any American government to control. And while a recovery of the US economy from recession may improve the situation somewhat, the fact that this tendency has continued inexorably over several decades and through several economic cycles suggests that it is very unlikely to stop when the present recession ends. The white conservative middle classes are therefore faced with the loss of their demographic dominance just as much of their economic dominance is collapsing.

Immigration also plays a part in the economic woes of the white middle class. Just as wages for unskilled and semi-skilled labour are being undercut by Latino migrants (including many illegal immigrants), in high-income professions whites are facing increasing competition from Asian migrants and their children. Writing in the New York Times on December 19, sociologist Carolyn Chen noted that Asians account for between 40 and 70 per cent of students at top public high schools with merit-based admission in New York, San Francisco, and elsewhere. They are only being prevented from achieving similar proportions at elite universities by what amount in effect to unstated racial quotas.

In these circumstances, it is hardly surprising that the past four years have seen explosions of white radical conservative hysteria in the US, exemplified above all by the Tea Party. At the same time, it is clear from the presidential election results and demographic changes that if Republicans continue to follow the lead of the Tea Party they will make themselves unelectable to the presidency. Indeed, once Texas and other states develop Latino majorities capable of asserting themselves politically, Republicans may become unelectable in some of their regional heartlands as well. If the Republicans lose Texas, they will be broken as a real national power.

Winning the Latino vote, however, requires far more than bowing to continued immigration (legal and illegal) and then hoping that cultural and religious conservatism will make sufficient numbers of Latinos vote Republican. Most Latinos remain poorer than the US average, and often highly dependent on state programs for support. Bowing to their needs would require abandoning much of the Republican economic ideology of the past three decades. Moreover, appealing to Latinos will require in the short term giving more and more candidacies and local official jobs to Latinos at the expense of Anglos and may require in the longer term concessions in the area of the official status of the Spanish language.

In a straightforward democratic system, Republicans would have to compromise on these issues or face early eclipse. In the US, however, a combination of the vagaries of the Constitution with nationalist fetishisation of that constitution has given the Republicans the opportunity to fight a series of long and often successful rearguard actions. The composition of the Senate gives hugely disproportionate representation to a few Midwestern states with small white conservative populations. It takes more than 45 times the number of voters to elect a senator from California as it does to elect one from South Dakota. Even when these states vote for Democratic senators (in protest against some particular Republican candidate or action) these Democrats are generally of a highly conservative character. In addition, as was repeatedly demonstrated during President Barack Obama’s first term, the rules of the Senate give tremendous blocking power to a minority of Senators, not just over legislation but executive appointments.

Not only does this system give immense advantages to white conservatives, but the (not unrelated) quasi-religious devotion of conservative Americans to the letter of the Constitution means that they are even less likely to be willing to reach any compromise on this issue.

The House of Representatives presents if anything an even more curious picture when it comes to representative democracy. The Democrats actually won the national vote for the House by a slim majority of 49 to 48.2 per cent, but thanks, above all, to gerrymandering in states with Republican administrations, the Republicans emerged with a majority of 33 seats in a house of 438 members.

Once again, this gives them the ability to block much of a Democratic administration’s agenda. And the Supreme Court, dominated by a conservative majority, has tremendous power not just to cancel legislation and government decisions but even, in effect, to make legislation. Witness the decision to block restrictions on campaign finance, opening the way to even greater manipulation of US politics by private wealth.

It seems highly likely therefore that the decades to come will see a series of ferocious battles over issues like the distribution of congressional seats, with the courts and the rules of the Senate as weapons and the Constitution as the battleground. On the other hand, as the Latino population grows and Latinos become more politically active and confident, it is unlikely that they will continue to accept an electoral system which is not only so clearly rigged against them but is so clearly lacking in certain basic features of democracy. This would be a struggle with strong analogies to the fight put up by Southern whites against Civil Rights in the 1950s and early 1960s. It also seems highly probable that, given demographic realities, the end result would also be defeat for the white conservatives. In the meantime, however, US national politics would continue to be extremely polarised, government frequently paralysed, and the image of US democracy badly tarnished.

Alternatively, the Republican Party may split formally between diehards (like the House Republicans who, before Christmas, refused to back their speaker, John Boehner, in seeking a compromise on taxation with President Obama to avoid the “fiscal cliff”) and pragmatists who are desperate to win enough of the Latino vote to hold key states and gain national office. Further Republican splintering would guarantee Democratic political hegemony for more than a generation. It could lead to a new era of desperately needed reform or to disastrous complacency and stagnation.