There are 1,255 days left in the presidency of Barack Obama. Republicans are counting down the days, but so is the president. He knows that, thanks to the 22nd amendment restricting presidential terms, he has limited time to shape national policy. What will he attempt to make his legacy in those remaining days?
A glimpse of his priorities came in a speech he gave on July 30 at an Amazon distribution center. President Obama laid out a "grand bargain" for the middle class. He asked Congress to enact changes in corporate taxes that would simplify corporate taxes, lower taxes for companies creating U.S. jobs, but also impose a higher tax on corporations that send jobs overseas. His plan includes spending more on our aging transportation infrastructure and, at the same time, creating more construction jobs. He also advocated an increase in the minimum wage, which has not risen since 2009 even though inflation has increased nearly nine percent over the same period.
Over the next few weeks, the president plans to lay out more of his "grand bargain" regarding education, retirement and health care. Then, his challenge will be to pressure Congress to enact the various aspects of his middle-class oriented program. With intense partisan gridlock, a Republican House disinterested in helping him accomplish anything in domestic policy, and a lame duck presidency, he has a daunting task ahead of him.
But middle class Americans should be worried if he loses. The middle class in America is in trouble. The recession has taken its toll on the middle class. Fewer Americans today consider themselves middle class than did so in 2008. About four in 10 adults in the middle class say they are worse off now financially than before the recession. Three out of four middle class Americans say they are only somewhat confident they will have enough income for retirement.
But problems for the middle class predate the recession. For several decades, the middle class has been shrinking in the percent of the nation's income it brings in each month. The Pew Research Center found that while in 1971, the middle class, defined as those whose annual household income was two-thirds to double the national median, had 62 percent of the household income in the nation, today it is only 45 percent. Those in the upper income held 46 percent of household income in 2011, compared with 29 percent 40 years before. In other words, the rich are getting richer, but the middle class is actually becoming poorer.
Another measure of the decline of the middle class is the value of assets. The median net worth of the middle class is only $2,000 more than it was in 1983, even though inflation has increased 121 percent during that same period. By contrast, the median net worth of those in the upper income level has increased from just over $300,000 in 1983 to $574,000 by 2010.
No wonder those in the middle class feel they don't have the money to do the things they did in the past. According to the Pew survey, 85 percent of those in the middle class said it was more difficult for them today to maintain their standard of living than it was just a decade ago. While 62 percent of upper class Americans say they are more financially secure today than they were a decade ago, only 44 percent of middle class Americans feel that way.
The American dream has been based on the notion that each generation will do better than the last. Parents raise their children with the hope that they will be better educated, more affluent and better prepared for the economic vicissitudes of life than they were. But the decline of the middle class in the past 30-40 years calls into question that American dream. We all should hope President Obama is successful in helping bring back America's middle class.
Richard Davis is a professor of political science at Brigham Young University. His opinions do not necessarily reflect those of BYU.