The Middle Class ‘Under Attack’

At the Keystone Research Center, we have been chronicling for years the forces that are putting a tighter and tighter squeeze on middle-class Pennsylvanians.

Last week, we released a new report in partnership with the national policy center Demos that takes the temperature of the state's middle class in the wake of the Great Recession. I'm sorry to say, once again, the patient is not well.

The state's annual unemployment rate is the highest it has been in nearly three decades and the cost of going to college is on the rise.

According to the report, times are particularly tough for Pennsylvania's young people, with state budget cuts to 18% of public university funding and a 7.5% tuition hike in Pennsylvania's State System of Higher Education. Pennsylvania's young people already bear the seventh highest rate of student debt in the nation — at approximately $28,000 on average.

A few more quick facts from the report:

  • Pennsylvania's unemployment rate in 2010 (8.7%) was the highest rate in the state in 30 years.
  • At $10,761 for 2009-10, in-state tuition at Pennsylvania's colleges and universities is well above the national average of $6,829.
  • Nearly three out of four of college graduates in Pennsylvania entered the labor force with student debt in 2009, and their average debt-$27,066-was the 7th highest in the nation.

Since the 1980s, the middle class has been under attack in Pennsylvania, and now we're seeing the next generation being forced onto the downward economic escalator. That’s troubling for a number of reasons, but not least of all because it comes at the expense of our single greatest invention. As Bob Herbert, a former New York Times columnist and now a senior fellow at Demos, put it:

The middle class is more than an income bracket – it’s a promise, that if you work hard and play by the rules, you’ll earn enough to achieve a reasonable level of comfort and security, enough at the very least to support yourself, raise a family and enjoy the fruits of truly free society. That was a real 20th century invention – a novel possibility for regular people to enjoy that degree of freedom.

The middle class didn’t create itself, and its unraveling didn't happen by accident. It reflects public policies that have squeezed the middle class and sent inequality soaring. Again, Herbert notes:

In some cases, we just failed to act — we let the minimum wage continue to lose its earning power, we let jobs be shipped overseas and did nothing to invest in new industries. We let the right to form a union be relentlessly attacked to the point where it’s now a real David and Goliath battle to unionize a company.

In other cases, we took action, but in the wrong direction, such as irresponsibly cutting taxes, which made it all but impossible to continue to invest in the types of public structures – our roads, schools, libraries, for example — that help all of us reach our full potential. In the four recessions since 1980, we’ve seen cuts to education, health care, infrastructure, and on and on. Tuition at public universities has tripled since 1980.

In the years leading up to the Great Recession, the middle class and the aspiring middle class had already lost tremendous ground. Now the ongoing jobs crisis — with nearly 5 workers for every 1 job that is currently available — and the cuts in vital state services have only deepened the pain and increased the emotional distress.

Before you get too depressed, there is good reason to have hope for the state’s long-term prospects. Pennsylvania has weathered the recession better than many other states, and we continue to have higher union membership rates than the national average, which provides a strong basis for improving worker rights and employer responsibilities for all workers.

The key will be whether our state and federal policymakers have the good sense to enact effective policies that allow Pennsylvania workers to regain a permanent place in the middle class.


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