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The Middle-Class Squeeze

The insecurity of the middle class is the best illustration of the failure of this administration's economic policy. If progressives are to reclaim the debate about social and economic policy, we must reach out to the middle class.
 
 
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According to the latest argument offered by the political right, we're all doing splendidly -- but we just don't realize it. Americans would be celebrating if only Iraq weren't around to distract people, the White House tells us. Their theory, as articulated by Representative Paul D. Ryan, Republican of Wisconsin: "The economy is firing on all cylinders, the growth is incredible, and it's completely overshadowed by Iraq."

Unfortunately, the reality is that most Americans aren't distracted by Iraq, but instead by their own checkbooks. They are increasingly afraid that the basic elements of the American dream are outside of their grasp. And if progressives are going to hold the governing party accountable for this loss (instead of allowing them to hide behind the curtain of foreign policy fears), we will have to turn their attention to the group of Americans whose insecurity is the best illustration of the failure of this administration's economic policy: the middle class.

When we start looking at the financial pressures on middle-class families, it's easy to see why the President's approval ratings are down on economic leadership. Though employment is on the increase, so are college tuition, property taxes, gas, milk and oil prices, the cost of health insurance and childcare, credit card debt and bankruptcy filings. Owning your own home and a station wagon, knowing you could send your kids to college, feeling secure about a retirement that awaited you; that's what it used to mean to be middle class in America. Today, it's a different story. And when the American dream doesn't work for the middle class, it also denies poor and low-income Americans access to the ladder of economic mobility. This new reality is both an obligation and an opportunity for progressives -- if we dare to step out of our comfort zone.

Progressives have long been allergic to talking about the middle class. The middle class can fend for themselves, they say. Our duty is to those who are truly struggling. The right, meanwhile, uses the middle class when talking about their shared "values" but neglects them when differences about economic policy put them behind the eight-ball. Progressives must reject both of these assumptions. If progressives are going to reclaim the debate about social and economic policy -- and elect leaders who will pass legislation that brings middle-class families more financial stability and that restores economic mobility -- we will have to reach out to the middle class, not by matching the right's "feel-good" rhetoric word for word, but by getting serious about addressing the policies that have squeezed these families so tightly in the first place.

While this process is a long-term one that will require the kind of patience and discipline that conservatives have mastered when it comes to shifting frameworks about policy, here are some suggested first steps for progressives trying to figure out how to talk about the middle class:

1. It's okay to talk about the middle class. Really. "How can you talk about the middle class when they've got it pretty good?" I've been asked many times. Here's the truth about how good the middle class has it:

  • More than 92% of the 1.6 million Americans who filed for bankruptcy in 2003 were middle class.
  • More than 40 percent of the 2.4 million newly uninsured Americans were in the middle class.
  • Those employed as public administrators, teachers, and retail sales workers -- earning anywhere from $388 to $1,124 a week -- experienced average periods of unemployment as long as eleven weeks in 2003.

It's not a wonder that half of Americans earning between $25,000 and $75,000 said they were "worried about their financial condition," according to a national survey of working American adults by the Consumer Federation of America.

The reasons for their squeeze result directly from the failure of national policy. A policy of cutting taxes for the wealthy has drained our coffers, forcing states to raise revenue in order to provide even the basic levels of services that taxpayers expect. So, property taxes increased an average of 2.8 percent, according to a survey of 108 major U.S. cities in 2003. And college tuition increased by nearly 14 percent nationally in 2003. States like California that pride themselves on cutting taxes with one hand are forced to vote to increase undergraduate tuition by 14 percent with the other hand. As if a checkbook understands the difference.

At the same time, the average middle-class American family is carrying more than $2,200 in credit card debt. They aren't saving. They are worried about their retirements. Even the cost of heating their homes went up 25-40% in 2003. For all of this, they got an average tax cut of $800.

The middle class is squeezed. They feel it every day, in their homes, offices and classrooms. And it's okay to talk about it.

2. It's about the ladder, not just the station wagon. When it's bad for the middle class, it's bad for the people who want to work their way into the middle class. That's what makes this conversation so important to our efforts to create a larger coalition of interest. Raising the minimum wage and indexing it to inflation is part of the middle-class agenda. Directing funding to make child care services available to low-income workers is part of the middle-class agenda. Strong workplace rights regulations that help Americans join labor unions is part of the middle-class agenda. Putting an end to predatory lending is part of the middle-class agenda. Preserving the middle-class and restoring mobility into it are Siamese twins in this discussion. You can't talk about one without the other.

3. R-E-S-P-E-C-T. When we do talk about the reality of being middle class in America today, we must always show a little respect. Here's an example: Working Today is an incredible organization that provides health insurance to the increasingly mobile middle-class workforce. They recently launched an ingenious advertising campaign on the New York City subways. While many are quite funny (e.g. "Echinacea is not an acceptable form of health insurance"), there is one that sticks in my craw. It says "Welcome to Middle-Class Poverty." When I see it, I think of the people I grew up with who are now solidly middle-class, despite being squeezed by the skyrocketing cost of providing health care to their families. I suspect that they would never identify with a sign that linked their circumstances with poverty. Poverty is how they grew up, not what they've accomplished since then.

Perhaps Working Today is right, and there are middle-class Americans for whom this message resonates. I'm not sure. But progressives need to find out, and frame their conversations with respect for the fact that many of America's middle class have a great deal of pride about being middle class. This is probably why most of America identifies as middle class, even if they aren't. If we can ever envision a coalition of interest between the poor and working and middle classes, we will have to treat middle-class financial fragility with respect.

4. Talk policy, not just rhetoric. If we want to empower the middle class to examine their economic circumstances and understand their plight to be part of a larger failure of economic policy, we won't do so with empty election-year rhetoric. We will have to talk facts.

That's why the Drum Major Institute for Public Policy just released "Middle Class 2003: How Congress Voted," a scorecard ranking legislators based on their votes on legislation in support of the middle class in 2003. The legislation we examined didn't have "middle class" in their titles, but the impacts on the middle class were tremendous. From the effort to repeal the estate tax, which will force an inevitable increase in the local taxation burden on middle-class families, to the amendment to protect U.S. workers from outsourcing, to the Pharmaceutical Market Access Act allowing the importation of cheaper drugs from Canada, legislators had a real choice in 2003 to support or fail middle-class families.

Too often, however, their choice was to fail the middle class. While the Senate earned a B overall, the average grade masked great disparities. While almost 90 percent of Democratic Senators received an A, fully one quarter of Republican Senators received an F for their failure to support the middle class.

These party divides were evident in the House of Representatives as well. Two-thirds of Republican Congressmembers received an F, compared to one percent of their Democratic peers. Again and again, Republican's votes were body blows to struggling middle class families -- from a tax cut bill that lavished the wealthiest one percent of Americans with forty percent of the total tax cut and left the average middle-class family with an $800 check, to a bankruptcy bill that would create a windfall for an unregulated credit card industry at the expense of vulnerable middle-class families. When 88% of Republicans in the Senate vote against preserving overtime benefits for eight million white-collar workers, the voters who elected those Senators have every right to hold them to task. With votes like these, who needs rhetoric?

While their financial health has changed over the last thirty years, the other expectations of the middle class, such as a college education, holding a good job, owning a home, have remained the same. As a result, families that find themselves making choices between the gas bill and mortgage payments still consider themselves middle class -- in fact, much of America does.

This contradiction -- between the 'middle class state of mind' and the financial realities of a middle class life -- illustrates a failure of the American dream. And if the dream fails the middle class, it fails those who aspire to work their way up. If progressives want to stop playing defense on economic policy, they will have to step into foreign territory and talk to, and about, the middle class in ways they never have before.

Andrea Batista Schlesinger is Executive Director of the Drum Major Institute for Public Policy.