One in Five People in Working Families Fail to Attain to the Middle Class

For Immediate Release: February 21, 2008
Contact: Alan Barber, 202-293-5380 x115

Washington, DC: At least 48 million Americans in working families lack the income needed to gain a toehold in the middle class, according to a new report released by the Center for Economic and Policy Research.

“Movin’ On Up: Reforming America’s Social Contract to Provide a Bridge to the Middle Class” synthesizes recent research by CEPR on job quality, economic security, and unionization, and outlines a set of national policy reforms that would make it possible for more struggling families to join the middle class.

“Only 1 in 4 people in working families have a good job, one that pays $17 an hour, that has an employer sponsored health plan, and offers a pension,” said John Schmitt, a report co-author.

Current poverty standards do not accurately reflect the number of people in working families who do not have an income sufficient to maintain a middle class lifestyle. The report finds that nearly half of all working families falling below a middle class standard of living have incomes that put them above the official poverty line.

The authors conclude that to bring some balance back to the economy and ensure that more people share in our nation’s economic prosperity, labor market standards and institutions must be strengthened, access to post- secondary education and training must be expanded, and the system of public and private healthcare benefits must be reformed.

“Tremendous increases in economic growth and workers’ education levels over the last few decades should have moved millions of Americans into the middle class, but didn’t because of policy choices that increased inequality,” noted report co-author Shawn Fremstad. “ We must update America’s social contract to make sure that the economy is working for all Americans.”

The Center for Economic and Policy Research is an independent, nonpartisan think tank that was established to promote democratic debate on the most important economic and social issues that affect people's lives. CEPR's Advisory Board of Economists includes Nobel Laureate economists Robert Solow and Joseph Stiglitz; Richard Freeman, Professor of Economics at Harvard University; and Eileen Appelbaum, Professor and Director of the Center for Women and Work at Rutgers University.