Yes, Mr. President, our economy needs to work for all
Posted on 03/18/15Perspective on President Obama's speech in Cleveland today about middle-class economics.
Contact: Amy Hanauer, 216.361.9801
By Amy HanauerAt Policy Matters, we look at the policies, not the people who promoted them. We believe that neither state nor federal policy is doing enough to make sure that growth in our economy is widely shared. To have more broadly shared prosperity, we need a higher minimum wage, on-ramps to union membership instead of increasing obstacles, full implementation of health insurance access, and a real jobs program to deal with still-weak demand in our economy. That said, it is easy for people to forget how close we were to the precipice in early 2009. The country was losing jobs at the rate of 600,000 jobs per month. More than 49 million Americans, many of whom were working, were uninsured. At Policy Matters, we did extensive analysis of the American Recovery and Reinvestment Act, which pumped more than $787 billion into the national economy, reduced unemployment dramatically and helped avert economic catastrophe. Our analysis at the time found that the Recovery Act created or preserved 1.3 to 3.4 million jobs, added between 1.4 percent and 4.1 percent to our GDP, and kept an estimated 4.5 million American out of poverty. Ohio received more than $8.5 billion in Recovery Act funds. Ohio ranked first in the nation in creating green jobs with these funds. We got extensive job-training resources that let people improve their education and training at a time when the job market couldn’t quickly absorb them. Over 40 Ohio bridges and 121 Ohio roads were repaired, and you can see how cities like Kent were utterly transformed by these funds. Look at the amazing roadway developed, the Nelsonville bypass, which provided thousands of jobs during the worst of the recession in the poorest part of the state. This created a vital transportation improvement to the heart of Appalachia, an incredibly effective economic development tool. Perhaps less exciting but just as important that federal cash infusion helped Ohio balance its budget and fund its schools in 2010 and 2011, averting layoffs of more teachers and other public employees. Recovery Act funding also delivered tax credits to low-income workers and parents, bringing $376 million to Ohio and helping more than 640,000 children. Additional federal funds allowed hundreds of thousands of Ohioans to get unemployment compensation, aiding their families and communities. Ohio has accepted $2.56 billion in federal funds to expand Medicaid (through the end of 2015). Nearly half a million low-income Ohioans (492,000 as per Center for Health Affairs March 2015 snapshot) are now getting health insurance because of Medicaid expansion, and Ohio is paying nothing for that so far! This is in addition to hundreds of thousands of Ohioans who are getting health coverage through the exchange. Having health insurance is one of the things that converts someone from working poverty to middle class. Again, America and Ohio are not doing enough for poor, working OR middle class families. We have an economy in which increasing shares of returns are going to the wealthiest. In fact, 11 out of 12 of Ohio’s most common occupations don’t get a small family into the middle class with full-time, year-round work. Job growth in Ohio has lagged the nation’s. We could turn around the decline with adequate federal and state taxes raised from those most able to pay; expansion of programs like pre-K and home weatherization that create jobs while saving our economy money in the long run; a higher minimum wage; and increased unionization to help rebuild the middle class. We hope the president and the governor pursue policies to help families escape poverty and join the middle class, and we’re pleased to see examples of cases where both levels of government have done that and where they are trying to do more. Information in this statement is drawn from Policy Matters Ohio research, which can be found at www.policymattersohio.org.