Building Blocks for a Solid Middle Class

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The News & Observer (North Carolina)
By: Alexandra Forter Sirota
March 26, 2010

Vice President Joe Biden visited North Carolina last week to discuss the Obama administration's Middle Class Task Force and to tour a local "green" manufacturing plant. Biden's visit and the first annual report from the task force, released last month, signal a renewed commitment to rebuilding the American middle class. This is welcome news.

The specific proposals to invest in the development of a clean energy/conservation manufacturing sector, to support workers saving for retirement and to make college more affordable will go a long way to repairing damage done by decades of disinvestment.

Our national identity is bound up with our notions of middle-class life. The basic consolations of the American Dream - the ability to send our children to college, own a home, retire with dignity and know that our children will do better than we did - were unavailable to most Americans at the beginning of the 20th century. The progressive initiatives of the New Deal, the GI Bill after World War II and many structural investments by government effectively created the middle class we have come to consider synonymous with the American way of life. And while communities of color were often excluded from the benefits of these early asset-building policies, resulting in ongoing inequity, a greater number of Americans experienced economic security as a result.

These policies also delivered an unprecedented period of economic growth that was fed by the growing middle class's increased productivity and consumer purchasing power.

The deterioration of the middle class has, not surprisingly, sent shockwaves through our economy. The failure of workers to benefit from productivity gains, the weakening of worker protections and the resulting growth in inequality have all contributed to the decline of middle-class households.

Nationally, an estimated two out of three middle-class households are financially vulnerable - a few paychecks away from poverty. This instability compromises the promise of middle-class status and most significantly undermines the ability of future generations to do better financially than their parents, thus threatening our long-term economic growth.

North Carolina has not been immune from these national trends. Indeed, our state has felt them acutely. It's estimated that the wealthiest 20 percent of families have average incomes 7.2 times as large as the poorest 20 percent of families, representing the 21st largest gap in the nation. In just two short years, households have experienced a 30 percent decline in net worth. The current environment of prolonged unemployment, foreclosures and rising medical costs further threatens the middle class.

We need public sector leadership, through efforts like the Middle Class Task Force, to rebuild the middle class for the 21st century. North Carolina's congressional delegation and state lawmakers' support for the task force recommendations is critical to our economic future.

The current federal jobs bill provides an immediate remedy, but in the long term, investments in a green manufacturing sector propelled by the Advanced Manufacturing Tax Credit can provide many more living-wage employment opportunities.

Ensuring that workers can balance their work and family responsibilities is essential to the stability of the middle class. Workers must be guaranteed needed sick time to care for family and be able to afford child care that provides a high-quality experience for children while parents are at work. Making permanent the improvements to the Earned Income Tax Credit and the Child Tax Credit can ensure working households can make ends meet as well as stimulate local economies.

But such supports alone can't bring back a strong middle class. An additional investment will be needed to help with saving and asset building. Reform of the Savers Credit to provide more working families with a match to their retirement savings and automatic retirement plans for all workers can go a long way to delivering a more dignified retirement. And ensuring that college is affordable by increasing the Pell Grant and reforming student lending can provide families with greater access to higher education and the promise of mobility.

The middle class was built once before atop an infrastructure that wise policymakers erected to secure the gains of a growing economy. With a similar commitment today, America and North Carolina can not only recover from the current economic downturn but also build institutions that will continue to deliver opportunity for future generations.

Alexandra Forter Sirota is director of policy and research at Action for Children N.C.

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This page contains a single entry by Ernest Roberts published on March 31, 2010 3:46 PM.

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