Panel: Struggling Middle Class Helped Most By Education

June 16, 2011 | | Gannet News

Tamara Draut, with the New York City-based research and advocacy group Demos, said the middle class has struggled tremendously in the last 30 years.

When adjusted for inflation, persons between age 25 and age 34 made an average of $34,112 a year in 1985 in Michigan, and that has fallen to $30,600 in 2010, she said.

Just looking at men's income, the change was more stark, she said, as average incomes, adjusted for inflation, fell from more than $47,600 to $35,000.

In terms of what state residents pay in annual college tuition, the average in Michigan has increased from $7,300 in 2004 to $10,170 in 2010, she said. That compares to average tuition nationally of $5,900 in 2004 to $7,605 in 2010. The increase is tuition is contributing significantly to a large number of college dropouts, she said.

Charles Ballard, an economics professor at Michigan State University, said the primary reason for tuitions being forced so much higher is a cutback in state support for universities. Just at MSU, the share of state spending towards total university funding has gone from 78 percent in 1960 to about 28 percent in 2010.

He too said improving overall education attainment is critical to building overall wealth in the state. In Massachusetts, which has the highest number of people with college degrees, the per capita state income is 127 percent of the national per capita income while in Michigan the per capita income is 86 percent.

Sam Singh with the New Economic Initiative, and a candidate for the House, said, however, specifically dealing with youth employment there are a number of factors that affect the ability of younger people to get work.

One is the shift in demographic profiles, as older people are working longer and taking many of the jobs that in the past would go to younger people. A lack of good mass transit, especially in the Detroit area, also hurts the ability of younger people to get to jobs.

And, ironically, he said, increases in minimum wage also hurt the ability of younger people to get jobs.

But jobs are available in the state and a major problem the state faces is doing a better job of making the connections of what jobs are available to the kinds of training offered students, he said.

Governor Rick Snyder has also called for improving that training-to-jobs demand connection as part of a special message to the Legislature he intends to send in the fall.

But Mr. Singh said it is critical for the state to put greater investment into education at all levels. And he said the state should restore the Michigan Promise Scholarship in some form for college students. Restoring the scholarship does not have to come in the form of actual payment to students, he said, suggesting the state could forgive its loans to a student if the student stays in Michigan for a number of years after graduation.

Ms. Draut said nationally, efforts have to be made to reinvest in the middle class. While factors like globalization have affected economies worldwide, she said, other nations have seen less of an effect on the middle-class because those nations engage in support for child care services, have higher minimum wages and provide greater support for college training.

And Mr. Ballard said even after the state suffered dramatically during the recent economic downturn, it still has a large number of resources concentrated in wealthier individuals.

Nationally, he said, if income distributions were at the same level that they were in the 1950s and 1960s, then the top 1 percent of the wealthiest Americans would have $1 trillion less and the middle class would have $1 trillion more in resources.

"That's not chump change," he said.