February 24, 2015

Leading Economists Warn About Challenges Facing Middle Class

Warren and Cummings Host First Forum For New “Middle Class Prosperity Project”

WASHINGTON, D.C.-To launch their new Middle Class Prosperity Project, Senator Elizabeth Warren and Rep. Elijah E. Cummings, Ranking Member of the House Committee on Oversight and Government Reform, today held the first in a series of congressional forums to hear directly from leading economists about how the nation's economic system has been rigged against the middle class over the past several decades.

"As our economy recovers from the recession, big corporations and wealthy Americans are doing great, while middle class families are working harder than ever and getting squeezed to the breaking point - in part because of deliberate choices in Washington to run this country for the rich and the powerful instead of hardworking families," said Warren. "This forum is about pushing the Republican Congress to make different choices that will help strengthen and grow America's middle class." 

"The issue of middle class prosperity is not academic or theoretical-it is real and personal for me and millions of families across the country," said Cummings. "Our goal with this new Project is to give a voice to middle class families across the country who are working harder and deserve far more than they are getting today. I look forward to working with my colleagues in Congress and the Administration to promote prosperity and to ensure that middle class families get what they expect and what they have earned."

"The American economy-through the hard work of American workers-has proven its resiliency in rebounding from the worst recession since the Great Depression, creating more jobs since 2010 than all other advanced economies combined," said Rep. Sander Levin, Ranking Member of the House Committee on Ways and Means. "But we need an economy that works for everyone, not just the fortunate few. This vital project underscores the importance of implementing policies that strengthen America's middle class and that grow incomes across the board-not just for those at the very top."

"The challenges facing our nation and middle class families have never been more difficult, and the need for smart and aggressive federal investment has never been more clear," said Rep. Nita Lowey, Ranking Member of the House Committee on Appropriations. "Yet the mindless austerity that Congress has pursued since 2011-particularly in non-defense appropriations-has made it more difficult to address national priorities and confront challenges facing middle class families. We must reverse this dangerous course and again invest in policies we know will make middle class families more secure and our nation more competitive."

"The defining economic challenge of our time is how America can lead the world in sustained economic growth in a way that provides for more broadly shared prosperity. We must ensure that all Americans who work hard and play by the rules are rewarded with a fair share of a growing economic pie," said Rep. Chris Van Hollen, Ranking Member of the House Committee on the Budget. "We need to encourage companies and businesses to give their employees a fair wage. We need to allow middle class families, and those working their way into the middle class, to keep more of what they earn. And we need to build a fairer tax code that rewards paychecks for work and not just money from making money. Today's event is an important part of our effort to achieve these vital goals."

"While most economists agree that the U.S. economy is in a period of robust expansion, the full picture is not exactly rosy," said Rep. Maxine Waters, Ranking Member of the House Committee on Financial Services. "Many Americans have yet to recover from the devastation of the financial crisis, which wiped out two decades of family income, weakened the middle class and widened the racial wealth gap. We in Congress have a responsibility to ensure our nation's students, parents and seniors are given the opportunity to catch up, through measures that protect consumers and retirees, keep housing affordable, and ensure equal pay for equal work."

The forum featured Dr. Jared Bernstein, Senior Fellow at the Center on Budget and Policy Priorities; Dr. Beth Ann Bovino, U.S. Chief Economist at Standard & Poor's Rating Services; Dr. Gerald Jaynes, Professor of Economics and African American Studies at Yale University; and Dr. Joseph E. Stiglitz, University Professor at Columbia University.

"The U.S. has undergone various boom and busts in the economic cycle in the past 40 years, from the oil crisis of the seventies, to the dot-com bubble, to the recent financial crisis," said Dr. Bovino. "Despite the different circumstances of each of those cycles, one trend has been consistent: a slow erosion of the percent of middle class households, coupled with increased inequality between the lower and upper ends of the income spectrum."

As a part of this Project, staff from the House Oversight and Government Reform Committee informal survey of 12 leading economists (including two Nobel laureates), financial industry experts, and professors from top national universities. These experts found:

• middle class wages have been stagnating even as worker productivity has increased to historic levels;
• this disparity is increasing even as American corporations are thriving;
• the costs of basic middle class necessities have risen, and middle class Americans have been forced to work harder and sink deeper into debt to make ends meet;
• trends over the past several decades have put at risk the significant gains made by the middle class after World War II and the Great Depression, and
• our economy, which is directly linked to the success of the middle class, could suffer as a result.

On February 23, 2015, Warren and Cummings wrote an op-ed that appeared in USA Today introducing the Middle Class Prosperity Project to focus greater attention on challenges facing the middle class and to identify policy changes to help the middle class grow and thrive.

Cummings and Warren also appeared on MSNBC's Morning Joe this morning to discuss the Project and today's forum.

Cummings and Warren have a history of working together on initiatives to help the middle class and protect consumers, including partnering on key investigations into illegal foreclosures and strengthening oversight of enforcement actions in the financial sector.