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Published: March, 2009; Vol 5, Num 10

 

Biden Task Force to Address Middle Class Concerns

In what may prove an effective approach to problem-solving in the new Obama Administration, the President created the White House Middle Class Task Force last month and made Vice President Joe Biden its chairman.

In his January 30, 2009, remarks on the White House Blog, Biden wrote, “It is time to put the middle class front and center.” He then went on to list a number of concerns that matter most to middle class families, including retirement security, child and elder care affordability, college costs, juggling work and family, workplace safety and better paying jobs.

“Thinking comprehensively about how to solidify middle class life is certainly a good idea,” says LIUNA General President Terence M. O’Sullivan. “Unions made the middle class, and a partnership with Labor is the key to regaining its strength.  The President has made a good start, and we will work with him to raise families into the middle class and sustain them and their communities.” 

No consensus exists on the definition of the middle class. Most commonly, it is simply measured by individual or family income. Typically, the nation’s total income range is divided into five parts with 20 percent of the people in each. Some analysts adopt the middle 20 percent as the nation’s middle class, but others drop the top and bottom 20 percents, leaving the middle 60 percent as the middle class (see chart). Before the impact of the current recession (that is, in 2006), the median household income – half of households above and half below – was $48,201 ($69,716 for married households). Using the broader definition, middle class families earn roughly $35,000 to $122,000 per year.

 

Table 1. Middle Income Range Varies by Type of Household

Calendar Year 2006

Type of

Household

Median Income

(2006)
Middle 20 Percent Range
Middle 60 Percent Range (Not in bottom 20% or top 20%)

 

All Households

$48,201
$37,771 - $60,000
$20,036 - $97,032

Married Households

$69,716
$57,200 - $82,935
$35,476 - $121,842

Unmarried Households

$29,083
$24,500 - $39,010
$13,062 - $63,500

Households with Unmarried Female Family Head

$31,818
$25,200 - $39,336
$13,476 - $63,000

Households with Unmarried Male Family Head

$47,078
$38,776 - $55,500
$24,300 - $84,000

Non-Family Households (Single)

$29,000
$22,200 - $36,020
$12,108 - $60,300

Note: Income measure is cash money income from Census, which includes most market income (except capital gains) and some transfer income such as Social Security payments. However, it excludes the value of employer-provided health insurance, net imputed rental income, Earned Income Tax Credit (EITC) payments, the value of food stamps and other in-kind government services, capital gains realizations, and more. For a detailed description of the income concept Census employs, see http://www.census.gov/population/www/cps/cpsdef.html.

Also, technically the fraction of the population falling into those characteristics is based upon March 2007 responses—not exactly the year 2006—even though the income data is all based on 2006 income. (In other words, some households could have a change in their status in that short time period.)

Source: 2006 Current Population Survey, Census Bureau

 

Historically, the union movement played a fundamental role in the creation of middle class life in the United States. In recent decades, the expansion of the service economy has also contributed. Neither rich nor poor, the middle class is the mainstay of the nation’s production, pays most of its taxes and anchors the national identity. Over the last three decades – as manufacturing jobs moved overseas, union membership declined and competition increased in the service sector – pressures have mounted on the middle class. Meanwhile, the rich have gotten richer and the poor poorer.

The current recession and financial crisis have greatly compounded problems for the middle class (as well as the poor) by increasing unemployment, forcing sweeping numbers of home foreclosures, slashing retirement accounts and forecasting substantial cuts in government services. The recovery package adopted last month promises to address some of these concerns, but it remains unclear how fast it will act and how effective it will be. The President has indicated that further government intervention may be needed and stated his intention to do whatever is necessary to jumpstart the economy.

In this context, Biden’s new task force could be constructive in bringing the all-round needs of most Americans into White House discussions about ongoing recovery plans as well as health care and reform of other federal programs. Citing one example, O’Sullvan says, “The President’s choice of Hilda Solis to head the Department of Labor is a good one, and we expect OSHA to move decisively to improve on-the-job safety in this country.”

According to the Middle Class Task Force’s webpage, it will begin its work with a series of outside-the-beltway meetings. The first was February 27th in Philadelphia on the topic of “Green Jobs: A Pathway to a Strong Middle Class.” Americans are invited to offer their comments on the task force’s key questions, and a format is provided.

[Steve Clark]