Is America's Middle Class Making It?

Jodie Allen Introduced the panel by highlighting the growing mainstream awareness of class-based issues, as evidenced by the recent New York Times and Wall Street Journal series on the topic.

Al Checchi identified five areas which need to be addressed to improve the plight of the middle class: technology, immigration, public education, the strength of the labor movement, and functioning of the political system. Also advocated increasing the minimum wage to the level of the living wage. The gap between the minimum and living wage is filled by welfare supplements, meaning, in effect, that taxpayers are subsidizing large corporations who pay their staff minimally.

Peter Gosselin Painted a picture of middle class in America as a means of arguing that this socioeconomic strata is being saddled with too much economic risk; and that high-income earners need to bear more of that risk in the future.

Maya MacGuineas Pointed out that policies aimed at helping the middle class may, in fact, be hurting them. For example, interest rate deductions on homes have pushed up housing prices, making housing increasingly unaffordable for many. The three major challenges that need to be addressed to ease the burden of the middle class are: economic growth; income redistribution; and insuring people against economic risk. These challenges can be addressed through the following policy mix: running budget surpluses, mandating savings, introducing national unemployment and disability insurance and broadening the tax base.

William A. Niskanen Identified three issues which have adversely effected middle class income in the US in recent times: the spread of technology; poor students performances, particularly in the sciences; and increased competition from abroad. The solutions to America's economic problems lie in improving the public school system; lowering the corporate income tax rate and undertaking tort reform.

The Honorable Gene Sperling Argued that the recent economic recovery has not benefited the middle class. This recovery is unique in that it has not been led by job creation. In fact, anxiety about job security is the greatest issue being faced by the middle class. Policies need to be directed towards creating well-paying, secure employment opportunities.

Participants

• Gene Sperling
  Senior Fellow, Center for American Progress


• Al Checchi
  Former Chairman, Northwest Airlines and former Gubernatorial Candidate, State of California


• Peter Gosselin
  National Economics Correspondent, Los Angeles Times


• Maya MacGuineas
  President, Committee for a Responsible Federal Budget & Director, Fiscal Policy Program


• William Niskanen
  Chairman, Cato Institute


• Jodie Allen
  Senior Editor, Pew Research Center and former Managing Editor, U.S. News & World Report