DMI Blog

Amy Traub

Melding the Middle

“What will happen if we do it right,” Senator Chuck Schumer informed journalist and Atlantic Monthly editor Joshua Green, “is that there’ll be an alliance between the middle class and the poor, as opposed to the alliance between the middle class and the rich [that held for the past 28 years]. Everything we’re talking about is the work of an active, strong government, and if it works, it will wed the middle class to the Democrats for a generation.”

Schumer’s partisan political analysis is spot on: whichever party speaks most convincingly to the American middle class wins elections. And his sense that the nation’s middle class and the poor – those striving to attain a middle-class standard of living – share common interests is a point the Drum Major Institute has argued for years. But Schumer’s policy prescriptions (mostly an array of tax cuts and credits) don’t quite add up to the type of epochal class alliance he describes. The problem may lie with how the Senator defines the middle class – and in turn, contributes to a political dialogue that impacts how middle-class Americans understand their own political interests.

While the nation’s median household income is $48,000 a year, the figure is significantly higher when the elderly, young workers and recent college grads are excluded. So, according to Schumer and his advisors at the inside-the-beltway think tank Third Way, the middle class really lives in the range of $60,000 to $100,000 a year. Policies like Pell Grants, the Earned Income Tax Credit, and an increased minimum wage mean very little to this group. Instead, according to Schumer, middle-class families need an array of tax cuts: from buying a first home to affording college. “A lot of the things he’s calling for are not really radical,” insists Third Way’s Jim Kessler.

But neither are they the stuff of an alliance – electoral or otherwise – between the poor and middle class.

The problem may lie with those pesky income statistics. Simply equating “middle class” with “middle income” says little about the ways middle-class Americans actually live. The Third Way’s canonical $60,000 to $100,000 a year family may find their middle-class status precarious if they are struggling with heavy medical debts because they cannot secure health coverage for a chronically ill child. And what they – like their low-income counterparts coping with the same problem – need is more than a tax cut.

To consider policies that really unite the middle class with low-income families, it makes sense to consider their common aspirations. At its core, a middle-class standard of living means secure jobs that support a family; a safe and stable home; access to affordable health care; retirement security; time off for vacation, illness, and major life events; opportunities to save and avoid crippling debt; and the ability to provide a good education, including a college education, for one’s children. Middle-class households – increasingly squeezed by rising costs and stagnating wages even before the current economic downturn – aim to hold onto these staples while low-income households aim to attain them. And many of the same policies can do both – both strengthening the existing middle class and expanding it to include more working Americans.

Consider proposals to increase federal investment in voluntary preschool programs available to all youngsters. High quality preschool education has repeatedly been shown to benefit children’s language and cognitive skills. One study suggests that, over time, the benefits of investment in early childhood education may be as high as $12.90 for every dollar invested (others have found a lower, but still substantial payoff). Indeed, investing in preschool may be one of the most cost-effective ways to help children from low-income households get the beginning they need to succeed academically and attain a middle-class standard of living themselves as adults. But while preschool’s benefits are most pronounced for children from low-income households, many middle-class families also choose to send their 3- and 4-year-olds to private preschools. And they pay dearly for it. One recent report found that middle-income families may pay as much as 30% of their income for early education. These households would welcome the option of a free or low-cost public alternative of sufficiently high quality. Federal support for universal preschool programs is the type of policy with the potential to genuinely bring together both the current and aspiring middle class.

Thinking about the poor and middle class in terms of their common aspirations – rather than income categories that divide them – is the key to forming an enduring policy alliance between those who want to stay middle class during tough economic times and those still striving to join their ranks. At his best, such as when he aims to regulate a reckless mortgage lending industry that has devastated both low-income families striving for homeownership and their middle-class counterparts, Schumer seems to recognize this. His hoped-for alliance might be all the more enduring if he considered it explicitly.

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Posted at 8:33 AM, Jan 15, 2009 in Middle-class squeeze | Politics
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