What Would It Take to Save the Middle Class?
If the well-being of the middle-class is the yardstick by which America’s success is measured, then the country is in trouble. There was once a large population of middle-income American families, which stuck out as extraordinary compared to other countries. But in recent years, as developing nations have enjoyed ballooning middle classes, America’s has stalled out.
In a report released by the left-leaning Center for American Progress on Thursday, the researchers Carmel Martin, Andy Green, and Brendan Duke offer suggestions for what the next administration can do to to reestablish the middle class. They argue that workers’ job security and wage growth have become deeply undermined in recent years, as union strength has declined and companies have put creating shareholder value above rewarding and retaining employees.
To restore stability and job security to workers—which would in turn help increase their wages—the study’s authors recommend increasing public infrastructure spending, which they say would create jobs and improve productivity. They also argue for opening up profit-sharing arrangements to a broad array of workers, adjusting a tax deduction that currently allows companies to write off some executive compensation above $1 million, and increasing corporate transparency about stock buybacks, which can artificially move share prices. They advocate for increasing the minimum wage and overtime threshold, strengthening unemployment insurance, and establishing a subsidized job program to help those struggling to find work.
CAP is hardly the first group to suggest some of these solutions to America’s middle-class stagnation. (Some of those points may sound familiar since the the head of CAP has worked as a policy advisor on Hillary Clinton’s campaign.) Left-leaning groups have long called for increasing the minimum wage, strengthening unions, and restoring focus on workers instead of shareholders.
As the left rallies around these worker-first strategies, conservative groups have their own ideas for how to rebuild the middle class, many of which embody a top-down logic. The Trump campaign, for instance, has advocated lowering both personal and corporate taxes, which it says will spur business growth and bring more economic activity to American shores. Meanwhile, the right-leaning Heritage Foundation has criticized efforts to raise the minimum wage, saying that hikes would burden business owners and result in job loss. Studies about whether that is in fact the case are ongoing, and preliminary evidence is mixed.
The truth is, neither the right nor the left has a solution that will be fully implemented. But the election will decide the broader question of which course the country will take as it attempts to rebuild the economic class that once kept the majority of the country living in relative comfort and prosperity.