A hearing in late July on the middle-class squeeze by the congressional Joint Economic Committee did not get much attention at the time, but a warning at that hearing by Sen. Bernie Sanders, I-Vt., that what’s happening to the middle class is not just a squeeze but a “collapse” is resonating in the wake of this week’s bad economic news.
Sanders is arguing for “bold and aggressive” measures to address that collapse in an interview on “Meet the Bloggers,” the weekly Brave New Foundation program which will stream live at 1 p.m. today. I will be featured on the program with Amanda Logan at the Center for American Progress.
Thursday’s reports on consumer inflation and unemployment claims reveal the latest blows delivered to working-class families by the current economic downturn. Consumer prices going up at an annual rate of 5.6 percent last month, far above the 3.1 percent average increase in income. At the same time, the number of people receiving unemployment claims is 3.42 million, the highest level in almost five years.
With these trends, the legacy of Bushonomics is poised to add one more item to its legacy: “stagflation,” the combination of a stagnant economy and rising unemployment that had conservatives in the late 1970s indicting President Jimmy Carter and Democrats in Congress as failures on the economy.
The difference between the 1970s and today is that families earning five-figure salaries enter this dangerous economic period facing record economic disparity.
“I do think this is one of the most underreported issues of the past 10 years,” Sanders told the Joint Economic Committee on July 24. “The reality is that in many respects the middle class of this country is collapsing. The vast majority of our people have seen a decline in their standard of living,” while those at the top of the income ladder are beneficiaries of a wealth gap between the very rich and the middle class that has not been seen since the late 1920s.
One of the witnesses at the hearing, Elizabeth Warren, a Leo Gottlieb professor of law at Harvard Law School, said that while inflation-adjusted median household income has declined by $1,175 since 2000, basic expenses for average families have increased by more than $4,600.
“Seven years of flat or declining wages, seven years of increasing costs, and seven year of mounting debts have placed unprecedented stress on the ordinary families. By every critical financial measure, these families are losing ground. Without changes in critical economic policies, the strong middle class that has been the backbone of the American economy and the American democracy is in jeopardy,” she testified.
The case keeps getting stronger for a new, bold change in economic policy explicitly designed to help working-class families regain their footing. Sanders will outline his ideas on the Meet the Bloggers program, which will be available for on-demand viewing after the live streaming.