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Monday, April 29, 2013

Tom Still: Rebuilding the middle class: Ex-Wisconsin congressman offers a plan

By Tom Still
A report released this month by the Brookings Institution confirmed what many observers already suspected: Metro Milwaukee lost almost twice as many private-sector jobs in the decade of 2000-'10 as the average for the nation's 100 largest metro areas.

Not only was metro Milwaukee's 6.8 percent job loss well above the national average of 3.9 percent, but many of the vanished jobs were good jobs – with decent wages, benefits and some sense of security and opportunity.

In short, they were middle-class jobs that appear increasingly difficult to replace in today's jobless recovery.

Rebuilding the endangered middle class in America is the subject of "The New Middle Class: Creating Wealth, Wages, and Opportunity in the 21st Century," written by former Wisconsin congressman Steve Gunderson, who is now president and CEO of the Association of Private Sector Colleges and Universities.

The book provides an unvarnished look at why the American middle class has eroded over time, beginning with events, trends and policies dating to the 1970s, and offers some paths forward – assuming there is sufficient private and public will to follow them.

Gunderson, who also served in the Wisconsin Legislature before representing the state's 3rd Congressional District as a moderate Republican for 16 years, grew up in what he described as a classic middle-class environment. His grandfather was a farmer, his father a car dealer, and virtually everyone around them in the northwest Wisconsin community of Pleasantville fit that profile.

Today, Gunderson believes, the middle-class ethos that contributed so much to the nation's civic and economic fabric is threatened – not just in Wisconsin, but across the nation, at a time when competition from abroad has increased and the middle class is growing in emerging nations.

"Everyone thinks the end of the middle class began at the end of the recession," Gunderson said in a recent interviewk. "It didn't. It began in the 1970s. The good news is there is still time to save it."

The book outlines a host of reasons why the number of statistical middle-class households and their income growth has stagnated. Those include the instability of private and public retirement plans, the crumbling of the housing market following the growth bubble, policies and practices that encouraged a culture of personal spending versus saving, global competition, a lack of innovation in some industries and more.

Of late, Gunderson argues, one of the biggest factors contributing to the decline of the middle class is political gridlock.

"Both parties talk a great deal about restoring the middle class, but neither of them does anything about it," he wrote. "The truth is – they can't. The middle class cannot be restored in this era of severe political polarization. Unless politicians from both parties are willing to make compromises and restore the middle ground of American politics, the middle class will continue to erode. Throughout our history, consensus has built the middle class. Now, partisanship has destroyed it."

The consensus Gunderson proposes isn't somehow magical or unimagined by others, but it is a combination of ideas that may help to address challenges facing parts of Wisconsin that are struggling to reinvent their economies.

It begins with understanding the world has changed and the economy that existed a generation or even a decade ago has changed with it. The "knowledge economy" of the 21st century requires skills that weren't necessarily needed for middle-class jobs in the past. That has heightened the need for higher education that doesn't stop at the edge of a traditional college campus.

"America has spent decades reforming K-12 education," Gunderson wrote. "This is really important, but the next item on our agenda must be post-secondary education. Sixty-three percent of all jobs – and 85 percent of all new jobs – in America require some level of post-secondary education."

To Gunderson, that's not just more people with bachelor's, masters and doctoral degrees, but lifelong learners with certificates that address the needs of employers in emerging sectors that are most likely to create middle-class jobs.

Rebuilding the American manufacturing advantage, stabilizing retirement plans, easing the home-ownership crisis and solving the federal deficit riddle are also part of the equation. At the center of it all is what Gunderson describes as a "middle class compact" that focuses on fostering a growth economy, something he believes Democrats and Republicans alike can embrace.

Rebuilding the middle class, in Wisconsin and elsewhere, is essential to economic security, civic cohesion, democracy and even national security. It's a task that cannot begin soon enough, and which cannot be accomplished without public and private cooperation.

-- Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal in Madison.


Comments: 1

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