Sonia Melendez Reyes: The middle class is no longer America’s economic majority
The middle class is no longer America’s economic majority. It’s the first time that’s been true in 40 years. There are now more low-income and high-income Americans combined than there are people in the middle class, a study released Wednesday found. According to a Pew Research Center report, there were 120.8 million adults living in middle-income households and 121.3 million in lower- and upper-income households combined in early 2015, marking the first time in the center’s four decades of tracking this data that the size of the latter groups has transcended that of the first. The study defines middle income as adults earning two-thirds to double the national median, which translates today to somewhere between $42,000 and $126,000 a year for a three-person household. Since 1971, the percentage of adults living in the low income bracket has increased from 25 percent to 29 percent, and the percentage of adults living in the highest income bracket has shot up from 14 percent to 21 percent. The middle class, meanwhile, has shrunk from 61 percent to about 50. That’s not entirely bad news. The shrinking of the middle class is due more to the rising number of high-income Americans, which increased 7 percentage points, than it is to the increasing number of low-income Americans, which increased by just 4 points. “In at least one sense, the shift represents economic progress,” the study notes. On the other hand, the rich are getting richer at a pace much faster than the middle and lower classes. According to the study, the median income of people in the high-income bracket shot up 47 percent between 1970 and 2014; meanwhile, the income of the middle class jumped 34 percent, and that of the low-income bracket increased by 28 percent. The widening wealth gap remains a hot topic on the presidential campaign trail. Vermont Sen. Bernie Sanders has made reducing income inequality a pillar of his bid for the Democratic nomination, while candidates from both parties have acknowledged the problem of the middle class’s decline. Sonia Melendez Reyes is the Deputy Communications Director at American Women
Hillary Clinton proposes $275 billion in new infrastructure spending
Hillary Rodham Clinton called for hundreds of billions in new federal spending on infrastructure on Sunday, kicking off what her campaign says will be a month-long focus on job creation. Standing before a backdrop of union workers and students, the Democratic presidential frontrunner vowed to rebuild “ladders of opportunity” and give a greater number of Americans a “middle-class lifestyle.” “Investing infrastructure makes our economy more productive and competitive,” she said at the launch of “Hard Hats for Hillary,” a new effort by her campaign to mobilize union workers. “To build a strong economy for our future, we must start by building strong infrastructure today.” Clinton was joined by Boston Mayor Marty Walsh, who recently endorsed her campaign, and a number of labor unions backing her bid. “Get your sledgehammers ready because we have a glass ceiling to demolish,” Walsh told a cheering audience crowded into historic Faneuil Hall. The new infrastructure proposals make up the most expensive portion of Clinton’s economic agenda, which her campaign said would exceed the $350 billion she’s already proposed for a college affordability plan. Along with the $275 billion in infrastructure funds, she plans to call for new investments in manufacturing and research in the coming weeks. Her announcement comes as Clinton faces down challenges from Vermont Sen. Bernie Sanders and former Maryland Gov. Martin O’Malley, who’ve both stressed the need to increase direct federal spending. Sanders has proposed legislation that would provide more than $1 trillion in new infrastructure spending over the next five years, paid for by raising taxes on the wealthy and corporations. Clinton’s campaign said she would allocate $250 billion to direct investment by the federal government in crumbling roads, bridges, public transit and airports. An additional $25 billion would fund a national infrastructure bank, an idea unveiled by President Barack Obama in his first term that has been blocked repeatedly by congressional Republicans. The bank would support $225 billion in loans intended to spur private investment in struggling projects, adding a total of $500 billion in new infrastructure funds into the economy, her campaign estimates. Her campaign says their plans would create “good-paying, middle-class jobs,” citing a recent study that found wages for infrastructure workers at $38,810, several thousand dollars higher than the national median. The new federal spending would be paid for by closing corporate loopholes, according to her campaign, which did not detail which tax breaks would be targeted. The Republican National Committee accused Clinton of treating American tax dollars like “every day is black Friday.” “The real reason Hillary Clinton isn’t saying how she’ll pay for her trillion-dollar spending increase is because she knows it means raising taxes on the middle class,” said spokesman Michael Short. Clinton’s campaign says she would limit her tax increases to wealthy Americans. They argue that her chief Democratic rival, Sanders, would require middle-class Americans to pay higher taxes to fund his single-payer health care plan — a charge his campaign disputes. “I’m the only Democrat in this race pledged to raise your income, not your taxes,” Clinton said, in a subtle swipe at Sanders. Sanders’ campaign says that his single-payer health system would save taxpayers money in the long run because it would eliminate wasteful health spending. Republished with permission of the Associated Press.
Trail translator: They’re all talking “income inequality”
Of all the buzzwords and phrases popping up early in the presidential campaign, “income inequality” must be close to the top of the list. It’s not just Democrats insisting that the nation must deal with it firmly and fast. While Hillary Rodham Clinton and new primary opponent Sen. Bernie Sanders are hitting the idea hard, Republican candidates, too, are playing up the notion that people at the bottom of the economic ladder are getting a raw deal while the rich get richer. Since you’re sure to hear a lot more about income inequality during the next 18 months, here’s a closer look at what it means, where it came from and what the candidates want to do about it. • • • Definition, please In a nutshell, economic inequality refers to the yawning gap between the income of the richest Americans and everyone else. No one disputes that the gap exists, although there is debate about its size. There are all kinds of subtexts associated with this idea, among them: stagnating middle-class incomes, increasing economic power for the privileged few, barriers to upward mobility for the poor and a culture of cronyism in Washington that protects the well-connected. And that churns up feelings of envy, outrage, frustration and despair for candidates to tap into as they try to show they understand the economic angst of the middle class. • • • Origins The prominence of the issue has been building, off and on, for years, as the share of total income and wealth claimed by the richest Americans has grown. Incomes for the highest-earning 1 percent of Americans rose 31 percent from 2009 through 2012, after adjusting for inflation, according to data compiled by Emmanuel Saez, an economist at University of California, Berkeley. For everyone else, it inched up an average of 0.4 percent. The Occupy protest movement of 2011 and 2012 jump-started a global conversation about the wealth gap, with the rallying cry of “We are the 99 percent.” And everyone from Pope Francis to President Barack Obama picked up on it. In 2013, Obama called economic inequality “the defining challenge of our time.” • • • Look who’s talking Just about all the 2016 candidates are chattering about it. And when candidates describe the problem, it’s sometimes hard to distinguish Republicans from Democrats. See if you can guess who’s sounding off here: “The top 1 percent earn a higher share of our income nationally than any year since 1928. The people who have been hammered … are working men and women.” “While the average person is working longer hours for lower wages, we have seen a huge increase in income and wealth inequality, which is now reaching obscene levels.” “The economy is booming for people at the top. It is not booming for the bottom 90 percent of the workforce in America. The bottom 90 percent, which is most of America, has had stagnant wages for 40 years.” “The deck is still stacked in favor of those already at the top. And there’s something wrong with that. There’s something wrong when CEOs make 300 times more than the typical worker.” “Wage stagnation is happening at a time when the cost of everything is going up dramatically. And it’s not just that the cost of everything is going up, we have expenses we didn’t used to have.” “The policy aim of government absolutely should be that government should not contribute to income inequality.” Answers: 1. Republican Sen. Ted Cruz of Texas. 2. Sanders, a Vermont independent who’s running as a Democrat. 3. Republican Mike Huckabee, former governor of Arkansas. 4. Clinton. 5. Republican Sen. Marco Rubio of Florida. 6. Republican Sen. Rand Paul of Kentucky. • • • The solution? There will be huge debate on this over the next year and a half, and Republicans and Democrats offer far different solutions. In general, Republicans like to stress upward mobility — giving those at the bottom more opportunity to move up — rather than taking something away from those at the top. “The American people tend not to be envious people,” says Mike Needham, head of the conservative Heritage Action for America. “People are worried about their opportunity to succeed.” Democrats are inclined to look at increasing taxes for those at the top to allow government to do more for those below. “It’s very difficult to do much about the middle class and the poor without tapping some of the wealth and income at the very top, or at least changing the structure of the economy so that so much wealth and income don’t percolate upward,” says Robert Reich, who was Bill Clinton‘s labor secretary. Most of the candidates are still fleshing out their economic proposals. But they’ve already thrown plenty of ideas in the mix, circling back to classic debates over taxation and the proper role of government. Sanders wants to make the wealthy pay more taxes. Rubio’s pushing a big tax cut to spur growth. Clinton has criticized excessive CEO pay and wants to raise the minimum wage. Cruz wants a “simple flat tax.” Paul pushes “economic freedom zones” offering lower taxes in distressed areas. Former Florida Gov. Jeb Bush wants to give people more opportunities for “earned success.” Christie wants to cut income and corporate tax rates while changing deductions and credits. • • • Odds anything will change? Obama said Tuesday he hopes growing awareness of inequality will help bridge the ideological divide over how to address it. At the same time, progressive Democrats who want to close the gap released a wide-ranging policy agenda, with Sen. Elizabeth Warren of Massachusetts saying it was time to fight those who “want the game to stay rigged.” Skepticism abounds, though. Sanders questions whether Clinton or any of the Republicans are ready to take on the “big-money interests who control so much of our economy.” Paul thinks Democratic policies make income inequality worse. Carly Fiorina, the former technology executive who recently joined the GOP nomination race, says
