The 99 percent movement has given voice to a sentiment that is felt around the kitchen tables as much as it is reflected in most recent data from the U.S. Census Bureau: Wealth is concentrating in the top one percent, while the middle-class is eroding and the ranks of the poor are growing.
We’re coming out of a lost decade in which poverty increased and median incomes declined despite overall increases in worker productivity and corporate profits. But this decade can be different.
In a new report, “Restoring Shared Prosperity: Strategies to Cut Poverty and Expand Economic Growth” the Half in Ten campaign provides a set of key indicators to track our progress in cutting poverty in half in ten years. The report also offers policy solutions to move these indicators in the right direction by making sure the economy works for all of us, not just the top one percent.
The baseline is grim: 42.6 million Americans, or nearly one in six, lived below the poverty line last year, and even before the Great Recession over half of families with children did not have enough savings to live for 3 months at the poverty line should their income disappear. The rise of the working poor and decline in quality jobs is also evident in the report’s findings. In 2010, 80 percent of low-income workers and 58 percent of service workers in the private sector lacked access to paid sick days to care for themselves or their families. Less than half of low-wage workers had access to retirement benefits. Women, who are now sole or co-breadwinners in two-thirds of American families, are still earning 77 cents for every dollar earned by men for full time work.
This isn’t only bad news for the 15.1 percent of Americans in poverty. It’s not only bad news for the 99 percent. It’s bad news for all of us. Rising poverty means a shrinking pool of consumers who can help speed economic recovery and drive long-term economic growth. It means a less educated workforce to help fill and create the jobs and industries of tomorrow. The escalating levels of poverty also rob our economy of upwards of $500 billion a year in increased health care costs and lower worker productivity.
Moreover, the levers that will reduce poverty — policies to create more good jobs, ensure equal pay, encourage asset-building, and help maintain dignity and security when families fall on hard times — are the same levers that will strengthen and rebuild our middle-class.
Fortunately, we don’t have to accept the current state of affairs as the future of our country. We have the tools and know how to make our economy work for everyone: to create more good jobs, to offer a hand up to struggling families, and to restore the promise that your children will have more opportunities than you did.
We’ve done it before. Between 1959 and 1973 a strong economy combined with smart policy interventions cut poverty in half. Under President Clinton’s administration, poverty again fell by more than a quarter even as we achieved a budget surplus.
In the short-term, Congress can take immediate steps to boost employment such as passing the American Jobs Act, which includes provisions that would rebuild our nation’s schools and infrastructure; prevent teachers, firefighters, and police officers from being laid off; partner with small business to create subsidized employment opportunities for low-income workers; and continue unemployment benefits for Americans out of work more than 6 months. These provisions will help put our economy back on track and put millions of Americans back to work.
And we can afford to do so. CAP’s budget plan offers a course to put our nation’s budget on a sustainable path while simultaneously cutting poverty in half. Policymakers should take care not to balance the budget in a way that exacerbates poverty and inequality, but should also make targeted investments that will create jobs and grow our middle-class.
This report provides us with a 2010 baseline and yardstick to assess our long-term progress in achieving equitable growth that again cuts poverty and rebuilds the middle-class. Elected officials should take note-we cannot afford another lost decade.
John Podesta is the President and CEO of the Center for American Progress.