Middle income working families are falling behind, trapped in debt, searching for opportunity.
America is recovering from the Great Recession. The stock market and corporate profits are at all-time highs. Worker productivity is skyrocketing. Unemployment is falling. Inflation remains low. The deficit is shrinking and many families have health insurance for the first time.
Good news — but not the whole story. Millions of Americans are working harder than ever and still falling behind. Deep structural changes in our economy over the past several decades have undermined the ability of millions of people to build a secure future.
For more than 30 years, America’s middle class has been hammered. For those not occupying corner offices or able to fall back on investment portfolios, incomes have stagnated while expenses have increased, forcing tens of millions of people into debt just to make ends meet .
Things haven’t always been this way.
From the end of the Great Depression to about 1980, America built a middle class unlike anything known on earth. As the economy grew, income and family wealth grew. Families bought homes and cars, took vacations, educated their children and saved for retirement. This spurred demand for consumer goods and housing, combining to build one of the most unprecedented periods of growth in American history.
But then things changed. Beginning in the late 1970s, corporate executives and stockholders began taking greater shares of the gains. Productivity kept going up, but workers were left behind as wages stagnated.
Families might have survived as their incomes flattened, except for one hard fact: the costs of basic needs like housing, education and child care exploded. Millions took on mountains of debt and young people began struggling to cling to the same economic rung as their parents.
After the 2008 economic collapse, massive financial institutions received billions of dollars in bailouts, while families across the country watched helplessly as their home values and savings crashed and millions of jobs disappeared.
These events were not caused by an invisible hand. They were not the inevitable result of globalization or organic market trends. Instead, powerful interest groups, massive corporations and the super-rich rigged the system to jack up their profits and grab the spoils for themselves.
For too long, government has worked for the rich and powerful. Government needs to work for America’s middle class again.
America’s middle class is about opportunity. People create their own opportunity: they work hard, get an education and make smart decisions. But government also plays a role. Investments in schools give people a chance to get an education. Investments in infrastructure like roads and bridges, power grids and communications networks make it more profitable to create jobs here at home. Investments in medical and scientific research provide the foundations for an innovation economy. We do it on our own AND we do it together.
Opportunity is also about a level playing field. A tax code riddled with special interest loopholes that taxes the wages of assembly line workers and teachers at higher rates than the capital gains of billionaire hedge fund investors is not on the level. It just means that the rich get richer, and everyone else picks up the tab.
Under President Obama, the country has been digging out of the Great Recession. We’ve made great strides based on policies that Democrats have championed. But we must do more.
That’s why this week we’re launching a new Middle Class Prosperity Project to give a voice in Washington to those who need it most — hard-working people across this country. On Tuesday, we will hold the first in a series of forums to examine economic policies threatening the middle class, and we’ll hear from leading economists about how to help families rebuild economic security.
After the Great Depression, Congress enacted progressive policies to build and expand the middle class. But Washington became captive to powerful interests that game the system at the expense of the middle class.
It’s time to change that system. We must free our government from the grip of armies of lobbyists and the corruption of corporate influence.
This is one of the most urgent issues this generation faces. So we’ll work together to do what Congress should be doing — promoting policies to ensure that the best days of America’s middle class are still ahead.
Senator Elizabeth Warren is the Ranking Member of the Senate Subcommittee on Economic Policy, and Congressman Elijah Cummings is the Ranking Member of the House Committee on Oversight and Government Reform.