What’s the surest sign that the economic crisis is finally lifting and normalcy is in sight? We’re back to arguing about how the middle class is doing over the long sweep of history since the 1980s: Have they been dragged down by stagnating wages, high-end inequality, economic insecurity, and a greater chance that economic mobility will take them downward than up? Or is the middle class doing OK?
This debate had been in hibernation for the last three years, while everyone except the top 1 percent took a beating. But it was reawakened recently, particularly by a series of papers and articles—including one in this magazine—by Scott Winship, a fellow at the Brookings Institution. Winship, joined by economist Tyler Cowen and others, throws cold water on an emerging consensus among economists and political scientists: that economic insecurity has increased for most families, that mobility has declined, and that rising economic inequality is related to slower (or more volatile) economic growth or to declining mobility. (The last theme was the subject of a brilliant speech by Alan Krueger, the chair of the Council on Economic Advisers, in January). Winship challenges some points in the data supporting these claims, and from those disputes, makes a larger claim: The middle class, he argues, “is doing just fine.”
I’m going to avoid the substance of this argument—much of which involves questions about methodology and interpretation of datasets that are well beyond me—because I’m interested in something else. What is really at stake in this debate? What makes technical disputes about inequality and mobility such a flashpoint? There must be some significant political or policy implications that follow from this argument, or it would be playing out in the American Economic Review rather than in this magazine and National Review.
According to Winship, the policy upshot of the debate is clear: He argues that overstating the economic difficulties of the middle class—or “pandering” to them, as he put it in TNR—is a dangerous way to achieve progressive policy goals; in particular, it will make it harder to achieve gains for those who really need help. Winship references the Harvard economist Benjamin Friedman’s book, The Moral Consequences of Economic Growth, to show that in tough times people are less likely to be generous toward the poor; Thomas Edsall’s new book, The Age of Austerity, would support that view as well. “Scaring the middle class,” Winship said at a recent discussion at the New America Foundation, “is not a good way to get support for the policies you want.”
But is it really the case that reassuring the middle class would make them more comfortable with supporting benefits for the poor? If the middle class were convinced it was doing just fine, would politicians then be more likely to bypass them and focus benefits on the worst-off? It seems unlikely. The truth is that the middle class will be the focus of political attention whether they are doing well or not, because there’s no politics other than middle-class politics. Consider that when a similar argument erupted in 2007, it was the Democratic think tank Third Way that played the glass-half-full role—but its policy recommendations still involved a Christmas stocking full of tax breaks to reward the aspirations of those happy middle class voters. Not since the New Deal, back when the vast majority of the country was objectively impoverished, has a political campaign of either the right or the left focused on the worst-off. Because most of the poor are either non-voters or reliable Democrats anyway (including low-income whites, outside of the South), successful politics always has to show that a candidate or a party at least “gets it” when it comes to the economic worries of the middle class. (Polling on the question of whether a candidate “cares about people like me” is a good measure—one on which Barack Obama does remarkably well.) Even John Edwards, who began his 2008 campaign with a stated focus on poverty, soon declared, “I’m not just talking about the rich and the poor. I’m talking about the very rich, and everybody else.” The most explicitly poverty-focused campaign in decades was, it turned out, really about the middle class.
Winship is certainly right that the impulse to scatter benefits widely across the upper reaches of the middle class can distract both resources and attention from the poor. And contrary to the old aphorism that “programs for poor people are poor programs,” there is evidence that the middle class will support spending on programs targeted mostly for low-income families, such as the State Children’s Health Insurance Program (S-CHIP). Trying to cut S-CHIP in 2006 was one of the most unpopular moves of the Republican Congress of that era.
But what Winship overlooks is that accurately recognizing the economic stresses facing most of the middle class can help create a sense of shared experience. With the unifying experience of the recession, low-income Americans are no longer “them”—they’re people who have suffered or worry about job loss, bankruptcy, foreclosure, or a costly health crisis just like many others. Studies that show how these experiences are shared by those in the bottom income quintile and the middle quintile—even if the circumstances are different in scale—can create a kind of cross-class solidarity that the country has not seen in many years.
Getting the data right matters, of course. But the implications of the result aren’t between a politics focused on the poor and one focused on the middle class. To the extent that many middle class families are experiencing insecurity, stagnating incomes, and doubts about mobility, it’s a chance to create a safety net that can support both the least-advantaged and those with a surer footing on the economic ladder. Perhaps it will allow us to reclaim the concept of “social insurance” in which we all share, even when we don’t happen to be taking advantage of the benefits at the moment. It could help us get away from thinking of welfare recipients or the unemployed as an entirely different category of people, deserving perhaps of charity but little more. If it’s true that the experiences of the middle class are different in scale but not in type from those of the poor, liberals are correct to sense the possibility of a new kind of social contract, one in which we think of the benefits and protections provided by government or by social insurance as a shared value.
Mark Schmitt is a senior fellow at the Roosevelt Institute and former editor of The American Prospect.