Mitt Misses Middle Class’s Decline

entitlement societyThe Downward Mobility of the American Middle Class, and Why Mitt Romney Doesn’t Know

January’s increase in hiring is good news, but it masks a bigger and more disturbing story – the continuing downward mobility of the American middle class.

Most of the new jobs being created are in the lower-wage sectors of the economy – hospital orderlies and nursing aides, secretaries and temporary workers, retail and restaurant. Meanwhile, millions of Americans remain working only because they’ve agreed to cuts in wages and benefits. Others are settling for jobs that pay less than the jobs they’ve lost. Entry-level manufacturing jobs are paying half what entry-level manufacturing jobs paid six years ago.

Other people are falling out of the middle class because they’ve lost their jobs, and many have also lost their homes. Almost one in three families with a mortgage is now underwater, holding their breath against imminent foreclosure.

The percent of Americans in poverty is its highest in two decades, and more of us are impoverished than at any time in the last fifty years. A recent analysis of federal data by the New York Times showed the number of children receiving subsidized lunches rose to 21 million in the last school year, up from 18 million in 2006-2007. Nearly a dozen states experienced increases of 25 percent or more. Under federal rules, children from famlies with incomes up to 130 percent of the poverty line, $29,055 for a family of four, are eligible.

Experts say the bad economy is the main factor driving the increase. According to an analysis of census data by the Center for Labor Market Studies at Northeastern University, 37 percent of young families with children were in poverty in 2010. It’s likely that rate has worsened.

Mitt Romney says he’s not concerned about the very poor because they have safety nets to protect them. He says he’s concerned about the middle class. Romney doesn’t seem to realize how much of the middle class is becoming poor.

But Romney doesn’t like safety nets to begin with. He’s been accusing President Obama of inviting a culture of dependency. “Over the past three years Barack Obama has been replacing our merit-based society with an entitlement society,” he says over and over, arguing that our economic problems stem from a sharp rise in dependency. Get rid of these benefits and people will work harder.

He and other Republicans point to government data showing that direct payments to individuals have shot up by almost $600 billion since 2009, a 32 percent increase. And 49 percent of Americans now live in homes where at least one person is collecting a federal benefit such as food stamps or unemployment insurance, up from 44 percent in 2008.

But Romney and other Republicans have cause and effect backwards. The reason for the rise in benefits is Americans got clobbered in 2008 and many are still sinking. They and their families need whatever help they can get.

The real scandal, as I’ve said before, is America’s safety nets are too small and shot through with holes. Only 40 percent of the unemployed qualify for unemployment benefits, for example, because they weren’t working full time or long enough on a single job before they were let go. The unemployment system doesn’t recognize how many Americans work part time on several jobs, and move from job to job.

And even those who are lucky enough to be collecting employment benefits are about to lose them. A record and growing percent of the unemployed have been jobless for six months or more, and Republicans in Congress are unwilling to extend their benefits.

robert reichRomney’s budget proposals would shred safety nets even more. According to an analysis by the Center on Budget and Policy Priorities, his plan would throw 10 million low-income people off the benefit rolls for food stamps or cut benefits by thousands of dollars a year, or some combination. “These cuts would primarily affect very low-income families with children, seniors and people with disabilities,” the Center concludes.

At the same time, Romney’s tax plan would boost the incomes of America’s most wealthy citizens, who are already taking home an almost unprecedented share of that nation’s total income. Romney wants to permanently extend George W. Bush’s tax cuts, reduce corporate income tax rates, and eliminate the estate tax. These tax cuts would increase the incomes of people earning more than a million dollars a year by an average of $295,874 annually, according to the nonpartisan Tax Policy Center.

By reducing government revenues, Romney’s tax cuts would squeeze programs for the poor even further. Extending the Bush tax cuts will add $1.2 trillion to the nation’s budget deficit in just two years. That’s the same as the amount that’s supposed to be saved by automatic spending cuts scheduled to start next year – which, by the way, will hit the poor especially hard.

robert reichOh, I almost forgot. Romney and other Republicans also want to repeal of Obama’s health care law, thereby leaving 30 million Americans without health insurance.

The downward mobility of America’s middle class is the big news, but the GOP apparently hasn’t heard about it. Maybe it’s too hard to hear about from that far away – and Mitt Romney is certainly far away. His unearned income last year was more than $20 million. That’s about as much as the combined earnings of a thousand American families at or just above the poverty line.

Robert Reich
Robert Reich’s Blog

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Comments

  1. Floyd Miller says

    They haven’t missed the decline of the middle class; the decline was intentional. In Randian economics, ther is no middle class. There are the producers, who are the 1% and there are the moochers, which include all workers, whether a biochemist, programmer, janitor, auto worker, maid, firefighter, soldier, or anyone else that draws a check from someone, regardless of talents or skill level. This is what the middle class has missed; the 1% want us eliminated because we do not accept our place as moochers. We enjoy lobster like the 1%, we play golf, we join fitness centers, we use clean water and precious gasoline that the 1% wants reserved for them because of the shrinking availability. A friend of mine was attending a concert. he had general admission tickets and was in one line. People with special seats with added perks were in another. The general admission line was moving faster and one of the “special” people was boisterously complaining about it, pointing out her privilege. I am not suggesting that this culling is all due to crowded tee times, but, yes, that is symptomatic of the mindset driving the culling. Shrinking resources are indeed a driver past greed; a neo-feudalism is afoot. With traditional Darwinistic human lust for power, combined with the ersatz morality of Rand’s philosophy of greed, added to the duping of Christians who should know better, we are seeing a dangerous paradigm change that must be stopped.

  2. Scott Peer says

    I’ll make another point about Romney’s millions. Let’s say a person had a lot of money and wanted to live a life of supreme luxury. Maybe they felt a need each day for a couple of $100 bottles of champagne, a $500 hotel room, a chunk of the money for a couple of Mercedes, plus a new tailored clothing outfit every week. Let’s say they even had more luxuries in mind like private chartered air travel, and ended up averaging $2000/day every day of the year. No rest for the rich. In ten years the tab for this extravagant lifestyle would total $7.3 million. In other words, every year Romney’s $20M return from his investments would fund 27 years of the most opulent lifestyle.

    So all that money has nothing to do with luxuries or lifestyle, it is only about impressing the other rich folks about how much richer he is. The increasing riches of the few is just a competition between the rich, but unlike tennis both of the players on the court always win, and the losers did not even play their game. It is the most cruel game, and claiming that kind of money is needed to motivate people to create new things that benefit society is a cruel hoax.

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