Building an Economy that Works for Everyone

Public policy choices built the middle class – and they can also destroy it

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For 30 years Washington state and the U.S. as a whole have experienced a decline in the middle class. If you listen to the pundits on TV, it sounds like it was inevitable – or at least unavoidable. Nothing could be further from the truth.

The rise of the middle class in the post-WWII era wasn’t an anomaly. It was the direct result of policy choices at both the federal and state level to grow a middle class. Likewise, the current decline of the middle class is due to policy choices at the federal and state level – although the continuing effects of the Great Recession are making it worse.

In the report Under Attack: Washington’s Middle Class and the Jobs Crisis, EOI and Demos collaborated to examine the decline in middle income jobs, rising inequality, a decline in benefits that meet the basic needs of a changing workforce, and the rising cost of the American Dream, including home ownership and a college education.

This generation will likely be the first to have a lower standard of living than their parents. For example: from 2001 to 2011, tuition at the University of Washington increased by between 6% – 20% per year – from $3,983 in 2001 to more than $10,500 in 2011. Washington now ranks 32nd among the states in percentage of low income students participating in post-secondary education. The top 1% now claims 35% of the nation’s wealth – nearly double that of the past 3 decades – while overall wealth has declined for the bottom 90%.

The growth of the middle class in the 20th century was reinforced by high levels of public investment in infrastructure and education – and everybody, including the wealthy, paid their fair share. Today, wealthy individuals and corporations are paying the lowest tax rates in nearly a century – and state and federal policy choices seem focused on slashing educational opportunity, health and basic services, instead of investing in American infrastructure and talent to bring us out of the recession,

The obsession with the federal deficit is threatening to be the coup de grâce to the American dream. The American people and the people of Washington state deserve better choices.

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