Middle class woe 1 May 2012 the American middle class has been battered by pensions to mutual funds for retirees. Nocera the loss of well-paying jobs for the 70 percent of disavowed the conclusion of his 1995 book, “A the workforce without a college degree and failed Piece of the Action,” which painted a rosy picture of by would-be protectors in government and private transition from a “country full of people who had institutions, said panelists at the 35th Anniversary money in the bank to a country of people who Forum of the Harvard Institute for Learning in invested in the stock market.” Retirement on Friday. But as wages flattened with the decline of U.S. Former Pennsylvania Gov. Ed Rendell, whose manufacturing, he said, “This shift has turned out forthcoming book “A Nation of Wusses” criticizes to be terrible for the people who have to save for politicians of both parties for failing to act in the their own retirement.” country’s best interest, pointed to elected officials and corporate leaders who can’t see beyond the It transferred risk from the institution to the next election or quarterly earnings report. individual, putting more pressure on the middle class, said Nocera, whose latest book, “All the “Nobody is looking at what happens 15 or 20 Devils Are Here,” is about the hidden history of the years down the road,” he said. And regardless of financial crisis. political persuasion everyone has a stake in the future: “We can’t have a good economy if middle The best way to help middle-income residents in class income continues to go down.” the United States would be to address the housing crisis, Nocera said. “We have no housing policy. Frank Levy, an MIT urban studies and economics Most people’s equity is tied up in their house and professor, outlined how the middle class has the country has not decided what to do with Fannie suffered declines since the 1970s as a result of and Freddie.” trends ranging from globalization to rising tuition costs. “Is it all the Republicans’ fault?” asked moderator Paul Solman, PBS business and economics “Roughly speaking, the society, including the correspondent and Harvard M.B.A. ’79, in government and individuals, has made a lot of introducing Rendell, a leading Democrat. promises about payments to make in future that we can no longer make,” he said. “Yes,” Rendell said, to widespread laughter at the nearly full First Parish church in Cambridge. The middle class has been hurt by the failure of policymakers to plan and account for a sharp rise Rendell said the best thing that could happen to in health care costs and the widespread job losses corporate America would be to get rid of quarterly tied to the housing collapse. earnings reports that put shareholders’ returns ahead of visionary and wise business The question, Levy said, is: “How are we going to management. distribute the losses? How much will be absorbed by lower incomes and how much will be absorbed There was agreement among the panelists that in the present versus the future?” U.S. corporations should pay more taxes. New York Times columnist Joe Nocera assigned Levy noted that the United States is in the bottom another aspect of diminished incomes to the zeal third of corporate taxes paid in the world. corporate leaders since the 1980s have had for downsizing to boost profits, and the shift from Nocera said that tax reform would free up a lot of 1 / 2 corporate money for better purposes. “You would generate more revenue and make the corporations more efficient because GE wouldn’t have a 1,000-person tax office to find loopholes,” Nocera said. “But the reason it will never happen is this is how Congress lives and dies. They generate their own revenues by saving those loopholes or creating new ones.” The panelists agreed that skyrocketing tuition is hitting the middle class hardest. “If you’re poor, you can get grants and the rich pay full price,” said Nocera, using the example of the California public college system that now charges in-state students $30,000. “If you’re middle class you can’t afford it. “The state of California has taken this jewel and said we’re not going to cut back on our prison system but we’re going to cut back on our university system and balancing its budget on the backs of the middle class.” Nocera concluded, however, “The middle class is under siege but it’s not quite as hopeless as people like me portray it.” This story is published courtesy of the Harvard Gazette, Harvard University's official newspaper. For additional university news, visit Harvard.edu. Provided by Harvard University APA citation: Middle class woe (2012, May 1) retrieved 28 September 2021 from https://phys.org/news/2012-05-middle-class-woe.html This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no part may be reproduced without the written permission. The content is provided for information purposes only. 2 / 2 Powered by TCPDF (www.tcpdf.org).