Sort by
In the media

What Obama Left Out in His Economy Speech


I am of course glad to see President Obama focus the country on what he correctly identifies as the most pressing national problem, the crushing of the middle class. The solution he laid out in his address at Knox College, a middle-out economics which sees the middle class as the engine of the economy, is both good economics and a powerful political message. It is what progressives and Democrats need to keep emphasizing over and over again, both rhetorically and in their legislative agendas.

When it came to the broad foundations of policy, the president’s outline of the pillars of a strong middle class was on point: good jobs, quality education and job training, affordable health care, good housing, retirement security, and strong neighborhoods.

Still, I found the speech disappointing. The president only nibbled at the biggest change in our economy, the relentless decline in good jobs. [...]

The federal government has a history, by legislation and executive order, of protecting wages for workers paid for with federal funds. However, the prevailing wage protections put in place over the three decades from the 1930s to the 1960s now cover only 20 percent of federally funded private-sector work. Even for those workers still covered, wage rates can be little higher than the federal minimum. According to a recent study by Demos, the federal government now funds over 2 million jobs paying under $12 per hour – more than Wal-Mart and McDonald’s combined – in such industries as food, apparel, trucking, and auxiliary health care.

In another report on the federal contract workforce, the National Employment Law Project (NELP) interviewed over 500 contract workers and found that 74 percent are paid less than $10 per hour and 58 percent receive no benefits from their employer. The NELP report includes one gripping story after another of workers like Lucila Ramirez, who, after 21 years as a janitor at the federally owned Union Station, earns $8.75 an hour.