There’s another aspect to the nation’s economic recovery that balances all the good news of lower unemployment (5 percent), job creation (200,000 a month since 2011) and household incomes (ticking up).
The balance is that for all the talk of recovering, millions of middle-class Americans haven’t ever recovered from the monumental downturn that began in 2008. They may have jobs, but the jobs are for lower compensation. The lost ground hasn’t been made up, and the struggle is harder. Businesses have continued to trim their sails – pensions are in many cases a thing of the past – and education is more expensive for their children.
This is not good for the American Dream, that once-shared objective of most Americans to reach the “middle class,” a place where homes were affordable and there could be college educations for the kids and a little savings for old age.
The Pew Research Center reports that in 1971, 60 percent of Americans were middle class; now the figure is less than 50 percent.
Here’s the economic rub: National statistics showing a rebound tell only part of the story. A large part of that story is the same old story, that the rich are getting richer – upper incomes have grown disproportionately to middle incomes – while those on the lower end of the scale are doing worse.
The answer, or part of the answer, would be tax hikes similar to those reached by the president and Congress several years ago, to boost the taxes on the wealthy and businesses and to close loopholes, while trying to cut taxes on the middle class. But that’s unlikely to happen under a Republican Congress in an era of campaigns financed by virtually unlimited big money interests.
And in North Carolina, lawmakers have boasted of tax cuts, excessive tax cuts that have limited the state’s ability to do much for teachers or state workers, but the benefits go mostly to the wealthiest citizens. And, to make up the shortfall from those tax cuts, service taxes have been added on things like auto repairs. These amount to tax increases on the middle class. If you can’t afford a new car, then you have to keep getting an old car fixed, which thanks to Republicans on Jones Street now is more expensive.
Absent a change, North Carolina’s middle class will continue to lose ground, and will keep asking: Recovery? What recovery?