WASHINGTON–Rep. Elijah Cummings and Sen. Elizabeth Warren teamed up this week to examine how U.S. economic policies impact the middle class, which they say has been suffering from stagnant wage growth since the 1970s.
They kicked off their partnership by holding a hearing Tuesday afternoon to seek insight from economists about potential policy changes that could help the middle class.
“The issue of middle class prosperity is not academic or theoretical — it is real and personal for me and millions of families across the country,” said Cummings, D–Baltimore, at the hearing.
“We may be the first generation in America to see our children worse off than we are,” Warren warned.
The Middle Class Prosperity Project isn’t the first time Cummings and Warren have worked together. Since 2013, they have collaborated to combat illegal foreclosures, strengthen oversight of enforcement at the Federal Reserve and investigate regulation of the financial marketplace.
Warren, D–Mass., and Cummings, were joined by, Rep. Sandy Levin, D–Mich., Rep. Maxine Waters, D–Calif., Rep. Nita Lowey, D–N.Y. and Rep. Chris Van Hollen, D–Kensington, all the ranking members of their committees. No Republicans attended.
Cummings and Warren have identified several factors that have kept the middle class from growing with the economy. They include wage stagnation, despite rising productivity and thriving corporations; the increasing cost of “basic middle class necessities;” more middle class debt, including student loans and a loss of bargaining power.
They also linked the success of the U.S. economy to the strength of the middle class.
For this first hearing, Cummings and Warren heard from Joseph E. Stiglitz, an economist and professor at Columbia University; Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities; Beth Ann Bovino, U.S. chief economist at Standard and Poor’s Rating Services; and Gerald Jaynes, professor of economics and African American studies at Yale University.
Among those hardest hit by the recession, Bovino said, are millennials. It takes young adults four more years to reach the median wage than it took the same group 30 years ago. They also have much more student debt than they did before, she said.
Jaynes said he went from serving in Vietnam to being a professor of economics in eight years. He doubts that could happen today.
He also said the trickle-down economic policies of the past, “have been absolutely shown not to work,” and it’s time to consider alternate policies.
Rejection of the trickle-down economic policies popularized by Republicans in the 1980s was a prevalent theme of the hearing, with an emphasis on finding new policies that would strengthen the middle class.
Van Hollen argued for a tax code that rewards hard work more than just having capital. “How do we make an economy that grows faster and provides for greater shared prosperity?” he asked.
Stiglitz, winner of the Nobel Memorial Prize in Economic Sciences in 2001 and chairman of the Council of Economic Advisers during the Clinton Administration, spoke about the “financialization of the economy,” arguing that increased focus on the finance industry has harmed the economy.
He said that many of today’s best students head into the finance sector, where they have no real benefit to the economy, as opposed to 30 to 40 years ago when they went into teaching or medicine and you could see the benefit.
“Our country is better than this. We are so much better,” Cummings said to close the meeting. “We just want everybody to have a fair shot. [Middle class Americans are] not asking for a handout, they’re just asking for a fair shake.”