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The Economic Opportunity Program is designed to bring new political and public attention to the widespread economic insecurity and declining opportunity that characterizes American society today. Our efforts are focused on envisioning and ensuring the future middle class, by promoting new ideas in the areas of higher education, income and asset-based policy. Our work examining the growth of personal debt among low- to middle-income households is indicative of the new challenges they face as they try to get by--let alone get ahead.
The universal aspiration to middle class prosperity is a signature of American society. It has made the United States the most hopeful and dynamic country on earth, and it is a foundation of strong democracy. Yet today, the American Dream is in trouble. Too many people who play by the rules and do everything right find that they cannot climb into the middle class--or securely stay there. As a result of major economic changes over the past three decades, the traditional routes to a secure middle class life are less easy to travel than in the past.
At Demos, we believe that in order to reverse this trend, policymakers and advocates need both long-term policy solutions to define where we should go, and broad-based public support for getting there. To this end, we have crafted over-the-horizon policy solutions in four critical areas -- higher education, income, debt and assets -- to help grow and protect the middle class. We have also helped develop a communications toolkit for advocates, Building the Middle Class, providing an effective frame for talking about the issues facing families struggling to make ends meet.
Over the next year, Demos will continue to confront the long-term challenges facing the country in maintaining and building a middle-class society. We will particularly focus on how the consequences of rising inequality and profound demographic change pose new obstacles to achieving widely shared prosperity.
During the last 25 years, household debt has grown faster than household assets, with the lower and middle-classes particularly hard hit. Our work on Debt and Assets provides new research and advocacy efforts, with the goal of addressing the dramatic increase in high-cost debt among low- and moderate-income families during the 1990s. Our research also focuses on the relationship between debt and a family's ability to save and build assets. Demos is working with national and state-level groups to educate policymakers and income security advocates about this silent, yet devastating burden facing millions of families. Our report, Borrowing to Make Ends Meet, details the growth of debt, the impact of deregulation on the cost of credit, and the multitude of economic factors driving so many families into debt. Our data analysis shows that between 1989 and 2001 average credit card debt among the lowest-income households ballooned by 184 percent, with even middle-class households' credit card debt ballooning by 75 percent over the decade.
We see this work as a critical component to policy development related to wealth and asset building. As more and more lower income Americans turn to high-interest debt to make ends meet, their capacity to save, through IDAs or other incentive programs, is greatly diminished. In addition, we believe this work will help illuminate the growing gap between earnings and costs, enhancing arguments for public policies to bolster incomes and reduce costs. Demos will work with state and national organizations to promote a policy agenda aimed at renewing consumer protections through revitalizing usury laws and expanding incentives for savings.
Economic Opportunity Program Staff
Tamara Draut, Director
tdraut@demos.org
Jose Garcia, Senior Research and Policy Associate
jgarcia@demos.org
Caleb Gibson, Federal Affairs Coordinator, DC Office
cgibson@demos.org
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