Strengthening the American middle class – National Consumers League

By Michael Finch, NCL Public Policy Intern

Earlier this month, three of the NCL interns (me, Alex and Ben) attended a hearing held by the Senate Health, Education, Labor and Pensions (HELP) Committee called “Building the Ladder of Opportunity: What’s Working to Make the American Dream a Reality for Middle Class Families.” For the first part of the hearing, Secretary of Labor Hilda Solis spoke about the Department of Labor’s efforts to rebuild a strong middle class.

Secretary Solis emphasized the importance of education and training in the effort to rebuild the middle class. A company represented in the second part of the hearing was a perfect example of this. IceStone, a recycled glass and concrete surface manufacturer, provides their workers with a living wage (starting at $10 an hour), and stresses the importance of professional development. All workers are given opportunities to improve their job skills (whether relevant to their current position or not) and therefore earn an even higher wage shortly after joining the company. The wage gap between their lowest-earning employee and their CEO is only ten times, an impressively small difference in an economy where the gap is usually closer to 300 times. Although IceStone only has a small number of employees, hopefully this model can be refined and used by more businesses in the future, both small and large.

One issue that Secretary Solis stressed that was of particular interest to us was the high youth unemployment rate. Young people are entering the workforce at much lower rates, and those who do manage to find employment encounter a high turn over rate. She pointed out that the lack of jobs for young workers is most likely caused by older workers having to wait longer to retire. This is just one entry in a long list of reasons young people should support bolstering our country’s safety nets for older Americans, but that’s an issue I could write a whole separate blog post about.

Back on the topic of young workers: Secretary Solis highlighted a heartening story about the company Jamba Juice, which agreed to provide 2,500 jobs to young workers as a part of the Department of Labor’s Summer Jobs USA challenge. When Secretary Solis visited Jamba Juice, they informed her that they have actually provided 2,700 jobs to young workers so far and would be willing to participate in similar programs in the future. As Secretary Solis put it, “I think once we begin a discussion with businesses about what we’re faced with, people will give it some thought and open up to those opportunities.” The Department of Labor had hoped to facilitate opening up 100,000 summer jobs for young people, and they’ve so far reached 80,000.

Another dismaying effect of the decline of the middle class mentioned by several hearing participants is the increasing wage gap between white workers and their minority counterparts. According to a new Pew Research Center study, white workers make around 20 times more than African-American workers, and 18 times more than Hispanic workers. This gap is the largest it has been since the government started collecting this data 25 years ago.

Secretary Solis suggested that increased training and professional development could also be a solution to this specific problem. She also emphasized the importance of helping workers to pinpoint and develop important skills and credentials that could make them more valuable to employers. This way, workers will be able to obtain, and retain, stable employment.

As Committee Chairman Tom Harkin pointed out, politicians on both sides of the aisle understand that the middle class is a vital part of keeping America great, and they acknowledge that a lack of opportunity for the middle class is bad for everyone. While the parties may vary on the specifics of cause and solution, they need to work together to figure out the best way to solve this pressing problem.