America's Middle Class & The Jobs Crisis

America's Middle Class & The Jobs Crisis

August 3, 2011
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America's strong and vibrant middle class didn't just happen. It was built brick by brick in the decades after World War II-by the hard work of our parents and grandparents and the strength in numbers that came from the unions that represented them. Unions made sure that as our nation's wealth and productivity grew, so too did the income and benefits of the people who worked hard to create that wealth. For decades, our nation's prosperity was widely shared-wages increased and more employers provided their workers with health insurance, pensions, and paid time off. The middle class was also built by government policies that invested in infrastructure and basic science, built up and expanded social insurance and safety net programs, and supported homeownership and made a college education accessible to a new generation. Parents without higher education themselves saved to send their kids to college, made possible by affordable tuition at state universities and financial aid.

The unraveling of the social contract predated the Great Recession, but the economic crisis hastened its demise. Not only did the state lose over 185,000 jobs because of the Wall Street-caused Great Recession, but the economic effects of those lost jobs reverberated to all corners of the state, particularly the already- strained finances of the state government. We estimate that the jobs lost due to the recession have cost the state over $215 million annually in lost sales tax revenues, on top of other revenue losses from the recession, resulting in further lay-offs of thousands of middle-class public sector workers. If the state's unemployment rate were at pre-recession levels, those lost hundreds of millions would return to the state government's coffers, and could be used to help thousands of young people attend college, maintain dozens of state parks, or hire, for example, as many as 2,350 teachers or 1,950 nurses.

Now is the time for citizens, workers, employers, and policymakers to come together once again to rebuild pathways to the middle class, create good jobs with fair pay and decent benefits, and ensure that prosperity is broadly shared for the next generation.

READ DEMOS' STATE-BY-STATE ANALYSIS, "UNDER ATTACK: AMERICA'S MIDDLE CLASS & THE JOBS CRISIS"