November 2012, Shawn Fremstad

In the three decades following World War II, our nation's economy was governed in a way that delivered broadly shared prosperity. Even as the rich became richer, the numbers and income of the middle class grew steadily, and the poverty rate measured by income fell from 40.5 percent in 1949 to a historic low of 11.3 percent in 1973. But the conservative "reorientation of the role of the federal government in our economy"—as President Reagan put it in his 1982 Economic Report—changed everything for the worse. Key elements of the conservative reorientation included lopsided tax cuts for the most advantaged Americans, weakened labor protections for workers, and sharp reductions in investments in skills training.

The consequences of this conservative shift in public policy are evident everywhere today. Our nation's middle class is smaller and income inequality is ever on the rise, particularly between the very rich and everyone else. The conservative economic agenda—including massive tax cuts for the rich, hostility to basic labor standards, and promotion of a host of other conservative policies that benefit the wealthy—has failed.

Income is not an isolated indicator. The same factors that take such a toll on America's broad middle class—increased unemployment, stagnant earnings, and increased inequality—impede us from making the kind of sustained progress on reducing overall poverty that we made in the earlier era of shared prosperity. This paper looks at how more good jobs are a necessary condition for expanding the middle class and reducing poverty over the next decade.

This report was originally published as part of the Half in Ten 2012 report, a project of the Center for American Progress Action Fund, the Coalition on Human Needs and The Leadership Conference.

Report - PDFpdf_small