OurFuture.org Blogs: Amy Traub

Joel Kotkin's Middle-Class Muddle

Amy Traub — Wed, 29 Oct 2008 09:48:08 -0700

When Alan Greenspan admits free market ideology is flawed, you know conservative thought is up a creek.

But never fear: if conservative economic ideas have been discredited, the Right can still distort progressive ones.

Joel Kotkin’s recent article in Politico is a prime example of such misinformation. Kotkin recognizes that economic polarization has put the future of the nation’s middle class at risk. He doesn’t appear impressed by McCain’s warmed-over tax-cuts-cure-all dogma. But he isn’t willing to honestly assess Obama’s plans. Instead, Kotkin chooses to focus exclusively on Obama’s agenda for short-term economic rescue, which he discovers doesn’t adequately address the long-term problems of inequality and a faltering middle class. This disingenuous look at “recent proposals” conveniently overlooks the candidate’s larger agenda – including policies with real potential to strengthen and expand America’s middle class over time. But since Obama didn’t discover the middle-class squeeze just last week, his plans to address it aren’t part of Kotkin’s roundup of what’s been happening lately.

Kotkin’s instance on manufacturing political fault lines in absurd places (Al Gore is against infrastructure?) and implying cynical political payoffs behind every policy initiative suggest that he is not genuinely interested in Obama’s long-term plans to bolster the middle class. But the rest of us should be. And there’s plenty there.

Kotkin’s refusal to look at the big picture blinds him to Obama’s health care plan, for example, which would extend coverage to 34 million Americans while lowering costs for millions more. While the Obama health care plan is far from perfect, his proposed reforms would nevertheless reduce a major cause of strain and instability for middle-class families struggling to afford sky-high premiums, deductibles, and co-pays, or even purchase coverage at all. In short, they’d be a major step toward strengthening the middle class.

Creating middle-class is jobs is critical, Kotkin agrees. But he proceeds to overlook both Obama’s short-term Jobs and Growth Fund that would put Americans to work immediately building needed infrastructure projects and the candidate’s longer term plan to invest in green jobs that would help to foster an entirely new sector of the U.S. economy.

Kotkin complains that Obama’s tax cuts don’t create upward mobility, and when it comes to many of the tax plans, he’s right. But Kotkin must have missed the memo about the overwhelming bipartisan, cross-ideological consensus that the Earned Income Tax Credit lifts millions of working Americans out of poverty. And it leaves us with the question: what does create upward mobility? After all, Kotkin denounces Obama’s support for education as nothing more than a sop to the liberal professoriate. And Kotkin neglects to even mention the Employee Free Choice Act which would make it easier for working people to join unions – another proven route to earning middle-class wages and benefits. While our critic would no doubt find it easy to uncover a political payoff in Obama’s support for this measure, the truth is it has tremendous potential to grow the middle class by enabling working Americans to improve their own jobs.

Obama has endorsed policies to help middle-class families cope with income and job loss when they take time off to care for a new baby or a sick relative. He has crafted plans to help middle-class families hold on to their single greatest asset – their homes. And he has thought out proposals to improve middle-class retirement security. Kotkin’s cheap shots do justice to none of this and prevent us from evaluating policies that could genuinely address the future of the American middle class.

Education Is Great, But We Need More Unions

Amy Traub — Thu, 18 Sep 2008 06:30:01 -0700

The American Dream is a middle-class dream. We occasionally fantasize about striking it rich or becoming famous, but Americans mostly aim to achieve and hold onto a middle-class standard of living. When the fundamentals of middle-class life — jobs that pay enough to support a family, access to health care, a safe and stable home, time off work for vacation and major life events, a good education for our children, and a dignified retirement — are within the reach of most Americans, the nation is stronger economically, culturally and democratically.

Today the nation’s middle class is squeezed between rising prices for staples like gasoline, food and health care, and stagnant wages that don’t keep up. Plummeting housing prices have undermined the value of the single biggest asset most middle-class families own and millions risk losing their homes to foreclosure. The time-honored middle-class survival strategies: send more family members into the workforce, work longer hours, borrow more, and save less, are reaching their limits. Middle-class families are forced to tap into their retirement savings to afford a college education for their children. It is harder to get ahead, most Americans say, and easier to fall behind. We are moving away from an economy that enables working people to enjoy a middle-class standard of living. How can we reverse course?

We need to create an economy in which more American jobs support a middle-class standard of living. To do that, working people – from janitors to journalists – need more power in the labor market.

Some offer increased access to education and (re)training as a solution to securing middle-class jobs in competitive global labor markets. And yes, the public sector should increase support for public colleges and provide more generous grants to students so that young people can more easily attend college and older workers can acquire new skills. But education alone won’t solve the economic problems underlying the middle-class squeeze.

If it were, college graduates would be doing better. And while educated workers are more likely than those without a degree to enjoy a middle-class standard of living, wages for most college graduates have grown sluggishly in recent years and their access to employer-provided health care and pensions has dropped.

And then there are the tens of millions of Americans who work at jobs that don’t require a college degree. The Bureau of Labor Statistics projects that retail sales, food service, home health aides, janitors, laborers and landscapers will be among the occupations with the most available jobs by 2016. These occupations, as much as financial analysts or software engineers, are the jobs of the future. What are we doing to ensure that these jobs can enable working people to live the American Dream?

Today, if you are a child-care worker or security guard (both also among the next decade’s most in-demand occupations), you are likely receiving low pay and poor benefits. But history tells us that it doesn’t have to be that way. In the early 20th century, when the booming manufacturing sector offered dangerous, low-paid work on assembly lines and factory floors, a wave of union organizing and bargaining lifted wages and improved benefits and working conditions. Those formerly awful manufacturing jobs have become the good jobs we now lament losing to overseas competition. To a large extent, today’s modern middle class is a legacy of those union advances, which set the standard for gains like employer-sponsored health coverage, pensions and paid vacation.

Economists at the Economic Policy Institute point out that event though productivity grew briskly in the most recent economic recovery, hourly compensation didn’t keep up – even for those with a college degree. Instead, corporate profits ate up a record share of the nation’s gross domestic product. Despite relatively low unemployment, employees don’t have enough power in the labor market to secure wages and salaries commensurate with the economic growth they help create. This is largely because today’s labor movement is a shadow of its former strength – representing a mere 7.5 percent of private sector employees. Unions have historically been a potent vehicle for working people to exert labor market leverage. To make the economy work for working people and rebuild the middle class, they must become one again.

No public policy would do more to revitalize the labor movement than the Employee Free Choice Act, a bill that passed the U.S. House of Representatives in 2007 and killed by a Senate filibuster. The legislation would streamline the process for organizing unions and bargaining a first contract, cutting through the suffocating atmosphere of threats, intimidation and illegal firings that prevent so many working people from joining a union today.

The Employee Free Choice Act is a game-changer, directly attacking the systemic problem of employees’ lack of power in the labor market. The impact would boost low-wage service employees struggling to gain a middle-class standard of living as well as college-educated professionals trying to hold onto it. We can legislate universal health care, mandate paid sick days, raise the minimum wage or subsidize take-home pay with the earned income tax credit, but empowering people to join unions directly redistributes economic power back to working people, enabling Americans to win gains for themselves in the workplace. This isn’t to say that some or all of these benefits shouldn’t be written into law as well – in fact, a strengthened labor movement might also help build political will for those reforms – but rather that this legislation changes the balance of power in a way that many other reforms don’t.

Globalization is the elephant in the parlor. International competition poses a formidable challenge to workers’ ability to exercise power in the labor market. Some are rightly concerned that raising wages and improving American jobs will encourage employers to move even more jobs overseas. But accepting ever-declining standards in a desperate bid to hold onto employment is a losing game for everyone. Instead, strengthening and expanding the middle class will ultimately require changing the balance of power worldwide – using international alliances and trade agreements to improve workplace standards everywhere. This isn’t an easy proposition. But reclaiming some power in our own workplaces is the necessary first step.

Amy Traub is the director of research at the Drum Major Institute for Public Policy.

Poll: A Worried Middle Class Supports Progressive Policy

Amy Traub — Tue, 19 Aug 2008 11:18:18 -0700

This article originally appeared on DMIBlog

Today the Drum Major Institute (DMI -- where I'm director of research) released its first annual Survey on the Middle Class and Public Policy. The nationwide poll, conducted by Global Strategy Group, aimed to learn how those Americans who see themselves as middle class (the vast majority of us, it turns out) think about the direction of the country, public policy ideas that could improve the nation, and their relationship with their own elected representatives. What we found were middle-class households filled with “fearful families”: Americans worried about the present, pessimistic about the future, but not nearly so divided on issues of public policy as the typical media reports of a country divided by red and blue might lead us to believe. In fact, there’s broad bipartisan support for a range of progressive policies.

First, the American people aren’t stupid. We know a country headed in the wrong direction when we see it. Seventy-seven percent of middle-class households think things are off on the wrong track in America now. With stagnant wages and unemployment on the upswing, jobs and the economy were the top concern. And with skyrocketing costs to fill up at the pump, high gas prices ranked #2 overall. Nor do people think gas prices are coming back down anytime soon. Despite regular reports of Hollywood break-ups, middle-class respondents say it’s far more likely that Brad Pitt and Angelina Jolie will last long enough to celebrate their 25th anniversary (56%) than gas prices reach $3 a gallon again (19%). (18% say neither one is going to happen).

Middle-class voters are split on the presidential race (about half leaning toward McCain and half to Obama) but there’s a lot of agreement around public policy with strong support for progressive measures. 75% of middle-class respondents think a universal national health insurance plan is an excellent or good idea. 71% want to see a law requiring employers to provide paid family and medical leave. 78% wish their representative in Congress had voted to expand SCHIP (health coverage for uninsured low- and middle-income kids). 68% say their rep should have voted to make it easier for people to organize labor unions. (the list goes on – check out the poll report itself).

While Democrats and folks planning to vote for Obama tended to support these policies most strongly, all the policies mentioned above get a majority of support from Republicans and McCain supporters as well.

If these policies are so popular, why isn’t the nation moving more quickly in a progressive direction? One problem is that most middle-class Americans don’t know how their members of Congress actually voted on the issues in question. While two-thirds of middle-class adults say they try to follow what Congress is doing at least somewhat closely, most get very few communications from their representatives. 72% cannot name a single piece of legislation passed by Congress in the past two years that has benefited them or their families. In part, this reflects a grim assessment of Congress’ efficacy. But it also says something about the lack of connection between the nation’s legislators and their middle-class constituents. 68% of middle-class adults would like their rep to support taxing hedge fund managers at the same rate as others in their income bracket. But 69% don’t know if that’s how their rep actually cast the vote. It’s hard to hold your representative accountable if you don’t know what they’re up to.

DMI isn’t primarily in the polling business. As a think tank, we try to provide the ideas and information to begin to solve some of the problems that face the nation. We've tried to do that with TheMiddleClass.org an online resource for understanding how legislation before Congress impacts the current and aspiring middle class and for tracking how members of Congress voted on each bill. That way you can find out both why the middle class benefits when undocumented immigrant kids get a chance to go to college and how their Senators voted on the bill. It may not close the disconnect between legislators and their constituents all in one swoop. But this poll has helped to convince us it’s needed more than ever.