A recent study from the Pew Research Center found that 70 percent of households face financial strains, are unable to save money and could not withstand a financial emergency. At a time when economic trends are increasingly negative, it seems that the “land of opportunity” is more of a pipe dream than it is a reality.
For more than two centuries, economic opportunity and upward mobility have remained the core of our nation’s identity. And while the unemployment rate is finally receding and the economy has added jobs, we have yet to see a boost in pay for the average worker.
In Washington, some of our biggest job growth has come in the form of service sector positions, which mostly offer low wages and no benefits. This trend has negatively impacted the middle class and individuals below the median.
Economic mobility – whether and how a person moves up or down the income scale – is influenced by a variety of factors including race, gender, education, and geography. Since the recession in the late 2000s, there has been little to no recovery in the wealth of the middle class and the poor. The bottom 90 percent of families are facing more consumer credit debt and student loans than ever before.
This growing inequality has had a direct hit on Washington’s communities of color, who are far more likely to be among the poorest fifth of the population in comparison to their white counterparts. Because workers of color are less likely to work in high wage industries, they disproportionately earn an average or below-average income, which also contributes to the inability to accumulate wealth.
There is a widespread public belief that those who work hard can achieve success and that each generation will be better off than the last. However, current trends tell us otherwise.
Putting families on solid financial ground and towards the road of economic mobility will require an assortment of thoughtful and strategic policy interventions. Fortunately, policy models for accomplishing that already exist, including:
- Retirement savings plans. Secure retirement is out of reach for many Washington residents. This is largely because 1) middle-class and low-income individuals have a low median income 2) employers do not provide retirement benefits, and 3) workers are unable to put aside large (or any) amounts of money. Retirement savings are important for long-term economic security, especially as our population ages.
- The opportunity to earn enough to save. Minimum wage workers cannot afford to support themselves, let alone care for a family. Increasing the minimum wage would provide workers with the opportunity to save for financial emergencies and improve individual economic security.
- Paid sick days. Over one million (40%) of Washington workers lack paid sick and safe leave. Whether caring for a child, an elderly parent, partner, or themselves all workers need access to paid time off to look after their own health and that of their loved ones. No one should be forced to decide between their job and their health.
In order to live in a society where people care for each other and value each other, where we can live with dignity and respect, we must continue to push policies that move Washingtonians up the economic ladder.
By Janna Higgins, Graduate Policy Intern