Third Way Perspectives
Posts Tagged ‘middle class’
April 7th, 2014
Raising the minimum wage has justifiably captured policy makers’ attention, but if the goal is to materially raise living standards for every American worker, we should also be calling for a minimum pension. Done right, this would not only create real wealth for the middle and working classes, it would use the power of financial markets to reduce wealth disparity instead of widening it.
There is a vast difference in the way the wealthy and the rest of Americans earn their money. In 2010, 60 cents of every dollar earned by those in the top 1 percent came from investments and businesses they owned. For the middle class, it was 6 cents.
For decades, the returns to capital have far outstripped the returns to labor. Before the mid-1980s, worker salaries constituted 65 percent of national income. In 2012, they were 58 percent. Economists rightly fret over how this contributes to wealth inequality. Well, if you can’t beat ’em, join ’em. If all working people, whatever their wage, could get a piece of these gains, it would improve their financial well-being exponentially. This is where the minimum pension comes in.
October 21st, 2013
Perhaps we underestimate ourselves. Five years after the Lehman collapse triggered the deepest recession in eight decades, the middle class may be solving the vexing problems of income inequality and stalled wages on its own.
Faced with unemployment and dim job prospects, Americans made one significant change that should alter their fortunes and those of the middle class for decades: they went back to school. During the recession, there has been a sharp surge in the number of Americans who are getting a college degree. Read the rest of this entry »
June 11th, 2013
Twenty years ago, American businesses flocked to China with vague but ambitious plans to sell its billion consumers everything from toasters to telephones. But in a market that had no meaningful middle class, they found few takers. In the years since, China has successfully tapped into foreign investment and know-how to build a powerful, export-oriented economy—and a rapidly expanding middle class—largely by selling to America’s middle class. Its success has stoked American concerns about trade deficits and the loss of middle-class jobs to low-cost foreign competition.
But China’s ongoing transformation points to a potentially different future: one in which America expands its exports, achieves fairer trade, creates good jobs, and strengthens the middle class—by increasingly selling to China’s burgeoning middle class.
March 27th, 2013
Our nation’s history is proof that manufacturing jobs lead to middle-class growth. At roughly the same time manufacturing’s share of the total workforce dropped from 20% to 9%, the middle class has shrunk from 61% of the U.S. population to 51%. While the U.S. manufacturing sector has recovered 500,000 jobs since early 2010, a major opportunity is surfacing in the clean energy sector. A $7 trillion clean energy market is developing around the world, and clean energy manufacturing provides an opportunity to renew and modernize our manufacturing sector.
The Obama Administration is already moving to help companies seize the clean energy opportunities. The Department of Energy is launching a new Clean Energy Manufacturing Initiative (CEMI), focused on growing American manufacturing of clean energy products. Led by Office of Energy Efficiency & Renewable Energy, the initiative includes modern analysis of the global clean energy manufacturing supply chain to inform the Department’s future funding decisions. This is a program that will empower companies to use our nation’s competitive advantages for their and America’s gain. It is ensuring our government is the most-well-informed government in the world and can help American companies out-compete the likes of China, South Korea, or Germany.
June 28th, 2012
The Supreme Court ruling on health care re-affirms the President’s goal of stable and secure coverage for the middle class and the nation. It is time for the Republicans to drop their fight against the law and join forces with Democrats against a common enemy: rising health care costs. Both parties should take full advantage of the key role that states play in health care, an important topic the Supreme Court also ruled on today.
Today’s ruling affects the expansion of health care coverage to the poor under Medicaid. As a quick refresher: the Affordable Care Act required states to expand coverage to all the poor under Medicaid. Today, one-third of the poor have no coverage under Medicaid, through a job, or any other source.
The Supreme Court affirmed the federal funding for that coverage, but said states should be free to choose whether to accept it for expanding Medicaid. From the start of the expansion in 2014 through 2016, federal funding covers 100 percent of the costs of expanding Medicaid, but after that, the states will start splitting the cost with the feds. The state’s costs are capped at 10% of the total, far less than their typical share, which averages 32% across the states.
What does this mean?