Wall Street Journal
By: Damian Paletta
December 4, 2013
The White House, Democrats, and their supporters are mobilizing behind a focus for 2014 and beyond on the wage gap between the wealthy and the rest of America.
A paper by a centrist-Democratic think tank, which will be released Wednesday, finds that more than half of U.S. working-age families with children under age 18 earn $60,000 or less a year, and more than 75% earn $100,000 or less a year, putting a new frame on what the White House has described as a growing wage gap in the country.
The Hamilton Project, which is co-chaired by former Clinton administration Treasury Secretary Robert Rubin, tried to pull back the curtain on what it described as the "lower middle class," a segment of Americans who live slightly above poverty but struggle to make ends meet.
Also Wednesday, President Barack Obama is expected to highlight the gap between different income groups.
The White House is billing Mr. Obama's speech as a follow to his 2011 speech in Osawatomie, Kansas that painted a picture of an American middle class under siege from wealthy interests, and a preview of his upcoming State of the Union address. Part of Mr. Obama's focus will be on raising the minimum wage, as the White House begins to highlight an issue Democrats hope to inject into the 2014 midterm elections.
"The speech will provide a window into where the president will focus his energies over the next three years," a White House official said.
In addition, House Minority Leader Nancy Pelosi (D., Calif.) is planning a big media event to ramp up the Democrats' proposal to extend emergency unemployment benefits to certain Americans, an extension many Republicans oppose.
"Though not officially poor, these individuals and families experience limited economic security," the new Hamilton paper said of the lower middle class. "One major setback could thrust them into economic chaos." It defined the lower middle class as individuals or families with income between 100% and 250% of the federal poverty level.
Among the report's findings:
1) Roughly half of U.S. families live below 250% of the federal poverty level.
2) Close to 50% of lower-middle-class families are headed by an adult who attended college.
3) Nearly 33% of lower-middle-class families receive "income support from a government program." Many of the recipients depend on the Supplemental Nutrition Assistance Program, also referred to as food stamps.
4) More than 20% of children face "food insecurity" in 37 states and Washington, D.C.
5) Families that earn slightly more than the federal poverty line can find themselves trapped in a tax bracket that doesn't qualify for low-income benefits and also fails to take advantage of deductions enjoyed by upper-income earners.
The 28-page study comes as Democrats and the White House are making a concerted push to frame their 2014 agenda around a debate about the gap between those at the top and bottom rungs of the economic ladder. Democrats are mobilizing around a plan to raise the hourly minimum wage -currently $7.25 - to $10.10. They are also fighting to prevent cuts in programs like food stamps, saying it is vital to many Americans.
The White House has spent several years pushing for changes in policies that officials say feed into a "growing" income inequality. And Democrats are trying to rally behind recent moves to raise the minimum wage in states and local governments.
But Democrats and Republicans remain divided on what policies most benefit lower and middle-class Americans.
Many Republicans believe raising the minimum wage will discourage businesses from hiring. Republicans have also proposed overhauls to programs like SNAP, saying that if more changes were made to shift people off of the program, it would help boost employment and make people more economically independent.