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The New York Times

Biden’s proposals aim to give stronger support to the middle class

Perhaps the most striking difference between the middle class of 50 years ago and the middle class of today is a loss of confidence – the confidence that you were doing better than your parents and that your children would do better than. you. President Joe Biden’s suite of multibillion-dollar economic proposals aim to both strengthen and rebuild an American middle class that feels like it is on changing ground. And with that comes an explicit message that the private sector alone cannot achieve this dream and that government has a central role to play. “When you look at times of shared growth,” said Brian Deese, director of Biden’s National Economic Council, “what you see is that public investment has played an absolutely critical role, not in the exclusion of private investment and innovation, but in setting the Foundation. ”Sign up for The Morning newsletter of the New York Times If the Biden administration is successful, the rebuilt middle class would rely on support stronger and much broader government than on the whims of the market. Some proposals aim to support working parents: family and medical leave paid by the federal government, more affordable childcare, free preschool classes. Others would use public investment to create jobs, in areas like clean energy, transport and broadband broadband. And a higher minimum wage would aim to support those who have jobs low-paid, while a free community college would improve skills. That presidents are presenting their programs to the middle class is not surprising given that nearly 9 in 10 Americans consider themselves to be members. The definition, of course, has always been a nebulous stew of money, credentials, and culture, grounded as much in lifestyles and aspirations as it is in assets. But what has run through an avalanche of studies, surveys and statistics over the past half-century is that living in the middle class, once seen as a guarantee of safety and comfort, now comes with often from a nagging sense of vulnerability. Before the pandemic, unemployment was low and stocks were skyrocketing. But for decades, workers have increasingly had to contend with low wages, slow wage growth and more irregular hours, as well as a lack of sick days, parental leave and all forms. long-term security. At the same time, the cost of essential goods like housing, health care and education has swallowed up a much larger share of their income. The trend is found in rich countries around the world. “Every generation since the baby boom has seen the middle-income group shrink and its economic influence weaken,” a 2019 report from the Organization for Economic Cooperation and Development concluded. In the United States, the proportion of adults in the middle bands of the income scale – which the Pew Research Center defines as roughly between $ 50,000 and $ 150,000 – fell to 51% in 2019 from 61% ago. 50 years. Their share of national income declined even more over the same period, from 62% to 42%. Their outlook has also darkened. During the 1990s, Pew saw growing optimism that the next generation’s financial situation would be better than it is today, peaking at 55% in 1999. That figure fell to 42% in 2019. economy has produced enormous wealth in recent decades, but much of it has been funneled into a small cadre at the top. Two employees were needed to generate the type of income that previously came in one paycheck. “High-income households have pulled out,” said Richard Fry, senior economist at Pew. Corrosive inequalities were just the start of what appeared to be a litany of glaring market failures, such as the inability to head off ruinous climate change or meet the huge demand for affordable housing and healthcare. . Companies have often funneled their profits to buy back stocks instead of using them to invest or raise wages. There was growing evidence, according to liberal economists, that the dominant intervention-free economic approach – low taxes for the rich; minimal government – failed to produce the widespread economic gains that supported and grew the middle class. “The unregulated economy doesn’t work for most Americans,” said Joseph Stiglitz, Nobel Laureate in economics. “The government has an important role,” he said, in regulating the excesses of the private sector, redistributing income and making substantial public investments. Skeptics have warned of government overbreadth and the risk that deficit spending could trigger inflation, but Biden and his team of economic advisers have taken this approach nonetheless. “It’s time to grow the economy from the bottom to the middle,” Biden said in his speech to a joint session of Congress last week, a reference to the idea that prosperity does not come from the rich but stems from ‘a well. educated and well-paid middle class. He underscored this point by pointing to workers as the dynamo of the middle class. “Wall Street did not build this country,” he said. “The middle class built the country. And the unions have built the middle class. Of course, the economy that brought millions of post-war families into the middle class was very different from what it is today. Jobs in manufacturing, construction and mining, once seen as the backbone of the workforce, have shrunk – as have unions who have fought aggressively for better wages and social advantages. Today, only 1 in 10 workers is a union member, while about 80% of jobs in the United States are in the service industry. And it is these types of jobs – in health care, education, childcare, disabled and elderly care – that are expected to continue to grow at the fastest rate. Most of them, however, do not pay the salaries of middle incomes. This does not necessarily reflect their value in an open market. Salaries for teachers, hospital staff, laboratory technicians, childcare providers, and nursing home attendants are largely determined by the government, which collects taxes to pay their salaries and sets reimbursement rates. Medicare and other programs. These are also jobs that are occupied by a significant number of women, African Americans, Latin Americans and Asians. “When we think about what the right pay is,” Stiglitz asked, “should we take advantage of discrimination against women and people of color, that’s what we’ve done, or can we l to use as a basis for building a middle class? Biden’s spending plans – a $ 2.3 trillion infrastructure package called the U.S. Jobs Plan and a $ 1.8 trillion plan for American families that focuses on social spending – aim to take into account how much the workforce and economy have transformed over the past half century and where they can be directed into the next. The president’s economic team drew inspiration from Franklin D. Roosevelt’s New Deal and the public programs that followed it. After World War II, for example, the government helped millions of veterans get college education and buy homes by providing tuition assistance and subsidized mortgages. He created a gigantic road network to support business activity and injected billions of dollars into research and development which was later used to develop smartphone technology, search engines, the human genome project, magnetic resonance imaging, hybrid corn and supercomputers. Biden also wants to repair roads and bridges, modernize power grids and invest in research. But his administration also concluded that a 21st century economy needs much more, expanded access to high-speed broadband, which more than a third of people in rural areas lack, parental leave and higher salaries for educators. “We now have 50 years of revolution for women entering the workforce,” and the most basic necessities that enable parents to participate fully in the workforce are still lacking, said Betsey Stevenson, professor at the University. from Michigan and a former member of the Obama administration’s Council of Economic Advisers. She paused a few moments to take it into account: “It’s absolutely beautiful.” Just before the pandemic, more women could be found than men in paid jobs. Providing equal opportunity, Stevenson noted, includes “the ability to receive high quality early childhood education, the ability to have a parent at home with you when you are sick, the ability for a parent to bond with you at birth. ” When it comes to offering this kind of support, she added, “the United States is an outlier compared to almost any industrialized country.” The administration also has an eye on how federal education, housing, and business programs of previous eras largely excluded women, African Americans, Asians, and others. In the Biden plan, there is college aid that primarily serves non-white students, a free community college for all, a universal preschool, and monthly payments for children. “It’s no longer a 1930s model,” said Julian Zelizer, professor of political science at Princeton University. And it all has to be paid for with higher corporate taxes and the richest 1%. The passage in a strongly polarized Congress is anything but assured. The multibillion-dollar price tag and the prospect of an activist government have ensured Republican opposition in a Senate where Democrats have the thinnest possible majority. But public polls last year showed growing support for the government to play a bigger role. “What’s so remarkable right now is this notion that public investment can transform America, that these are things government can do,” said Felicia Wong, president of the Roosevelt Institute of left. “It’s about fundamentally restructuring the way the economy works.” This article originally appeared in The New York Times. © 2021 The New York Times Company