Millions of working American families struggle to reach the middle class

In a press release yesterday from the Center for Economic and Policy Research (CEPR), their latest Bridging the Gaps project report shows that “One in Five People in Working Families Unable to Reach the Middle Class.” The press release summarizes CEPR’s new report, "Movin' On Up: Reforming America's Social Contract to Provide a Bridge to the Middle Class," as follows:

“At least 48 million Americans in working families lack the income needed to gain a toehold in the middle class, according to a new report released by the Center for Economic and Policy Research.

"Movin' On Up: Reforming America's Social Contract to Provide a Bridge to the Middle Class" synthesizes recent research by CEPR on job quality, economic security, and unionization, and outlines a set of national policy reforms that would make it possible for more struggling families to join the middle class.

"Only 1 in 4 people in working families have a good job, one that pays $17 an hour, that has an employer sponsored health plan, and offers a pension," said John Schmitt, a report co-author.

Current poverty standards do not accurately reflect the number of people in working families who do not have an income sufficient to maintain a middle class lifestyle. The report finds that nearly half of all working families falling below a middle class standard of living have incomes that put them above the official poverty line.

The authors conclude that to bring some balance back to the economy and ensure that more people share in our nation's economic prosperity, labor market standards and institutions must be strengthened, access to post-secondary education and training must be expanded, and the system of public and private healthcare benefits must be reformed.

"Tremendous increases in economic growth and workers' education levels over the last few decades should have moved millions of Americans into the middle class, but didn't because of policy choices that increased inequality," noted report co-author Shawn Fremstad. "We must update America's social contract to make sure that the economy is working for all Americans."

Interactive:

Have you read the report? What do you think fo CEPR's proposed "New Social Contract" (pages 9 - 14))? They identify:

1. "Restoring Labor Market Institutions"
2. "Providing Universal Health Insurance and Harmonizing the Publicly Financed Structures that Help Workers Make Ends Meet"; and
3. "Provide Workers with Greater Access to Postsecondary Education and Training"

as the most influential factors in helping more Americans reach the middle class. Do you agree or disagree with this conclusion? Comment now and let us know what you think!

Comments

[Cori]

I sent this today to the Director of the Crittendon Women's Union:

Dear Dr. Babcock,

I visited your website out of curiosity and calculated my "self-sufficiency" using your program. Sad to say, your numbers are seriously inaccurate.

Yes, I could rent in my town for $1100 per month if I shared a bedroom with my teen.

Transportation for $286 per month? My economy car payment alone is $220, and $66 for gas is more like a 10 day’s worth.

Health care? Premiums are $667 monthly, add more for co-pays and Rx’s, over-the-counter meds, and eye and dental care.

$215/month miscellaneous. OK, that’s $50/week for clothing, phone bill, car insurance, public school fees, renters’ insurance, electricity, heat, and on and on.

Don’t get me wrong, I know none of this is your fault! You’re out there trying to help with this problem. I’m just another frustrated citizen trying to figure out how I can have a pretty good job and not be able to cover my bills every month.

Thanks for letting me vent.
_____________________________
THE RESULTS?

Dr. Babcock suggested I post my comments here so I am doing so.

I would also like to inform the Dept. of Labor that their estimates of how little you can survive on are RIDICULOUS! Rely on public transportation? HA! What if you live in a small town which has none and your job is 2 towns away?????
Add in child care and the deficit you'd have every month is even bigger than what I have now.

Suze Ormon says how every woman should save. I'd love to, but eating comes first.

[Liz C]

This is a very interesting report, and I'm glad for the concise summary you provided. I especially appreciate the discussion on the need for a holisitc approach to these employment challenges: we have to look to both industry and education and training to ensure workers are meeting the needs of employers.

This insight into wages and the middle class, I am reminded also of a post I wrote on SpeakUnited.org, the United Way of Massachusetts Bay and Merrimack Valley blog. http://speakunited.org/blogs/elizabeth-curtis/achieving-american-dream

Here I discussed a series of reports from Pew Charitable Trust on economic mobility. I think these concepts about intergenerational wealth and class are directly linked to wages and the ideas presented by CEPR. We need to consider the multitude of factors playing into the challenges people face every day. It's complicated, and we'll need to work together.