"The Defining Challenge of Our Time"
Obama Goes All In on Income Inequality & Upward Mobility
Today, as part of the Center for American Progress’ 10th anniversary celebrations, President Obama gave what some are are calling “one of the most important speeches of the Obama presidency.”
Just as he did in his landmark 2011 speech in Osawatomie, Kansas and throughout last year’s campaign, the president laid out why America needs an economy built from the middle class out that works for everyone, not just the wealthy few.
Unfortunately, as the president said today, today’s economy is defined by “a dangerous and growing inequality and lack of upward mobility that has jeopardized middle-class America’s basic bargain — that if you work hard, you have a chance to get ahead.” He called combating this growing inequality and lack of upward mobility the “defining challenge of our time.”
Here are the facts:
- Salaries for CEOs have skyrocketed in the past 50 years. In 2012, CEOS made 273 times more than the average worker.
- While the rich are getting ahead, workers are being left behind. If the minimum wage kept up with inflation, it would be $10.74 today.
- Millionaires are making more money but paying less taxes. In the past 50 years, the 400 richest families in America actually had their tax rates fall by 60 percent.
- The top 1 percent of Americans own 40 percent of our country’s wealth, while the bottom 80% owns less than 5 percent.
- The wealthiest among us are taking over the elections—28 percent of all campaign donations came from the wealthiest 0.01 percent.
- As union memberships fall, middle class incomes shrink. The drop in union membership over the past 40 years is accompanied by an equally sharp drop in the middle class’ share of the nation’s income.
- From 1947 to 1979, when the middle class received 54 percent of the nation’s total income on average, the economy grew at a steady clip of 3.7 percent per year. But from 1980 to 2010, when the middle class’s share of the nation’s total income fell to only 46 percent, growth fell by 1 percentage point to 2.7 percent.
- Between 1979 and 2007, the richest top 1 percent of American households saw their income nearly triple. On average, the wealthy saw an increase of $973,100 per household. In contrast, the middle class saw their incomes rise by less than 40 percent.
- Despite enacting taxes cuts for the rich and for corporations, both Reagan and George W. Bush saw slower economic growth and job growth during their presidency than President Clinton. In contrast to Reagan and George W. Bush, President Clinton actually raised taxes in 1993.
The president laid out a five key action areas:
- Making sure our economy is growing faster. We must “relentlessly push a pro-growth agenda,” the president said.
- Making sure we empower more Americans with the skills and education they need to compete in a highly competitive global economy. That includes making higher education affordable and reducing the crushing burden of student loans, as well as making investments in early childhood education.
- Empowering our workers. That means protecting union rights, ending pay discrimination against women, and, finally, making it illegal to fire LGBT people just for who they are. It also means raising the minimum wage to put more money into the pockets of workers so they can buy things from businesses large and small, which creates a virtuous circle that grows the economy.
- Providing targeted programs for the communities and workers that have been hit hardest by economic change and the Great Recession. That means making sure that “a child’s course in life should not be determined by the zip code he’s born in, but by the strength of his work ethic and the scope of his dreams.”
- Revamping retirement to protect Americans in their golden years. That means shoring up both private and public retirement programs to make sure people can live out their golden years in dignity.
The president also took his argument straight to top Republicans, including Senate Minority Leader Mitch McConnell (R-KY):
And as people in states as different as California and Kentucky sign up every single day for health insurance, signing up in droves, they’re proving they want that economic security. If the Senate Republican leader still thinks he is going to be able to repeal this someday, he might want to check with the more than 60,000 people in his home state who are already set to finally have coverage that frees them from the fear of financial ruin, and lets them afford to take their kids to see a doctor. (Applause.)
And House Republican Budget guru Rep. Paul Ryan (WI), who attacked safety net programs like food stamps as unemployment benefits as “a hammock that lulls able-bodied people to lives of dependency and complacency”:
The point is these programs are not typically hammocks for people to just lie back and relax. These programs are almost always temporary means for hardworking people to stay afloat while they try to find a new job or go into school to retrain themselves for the jobs that are out there, or sometimes just to cope with a bout of bad luck.
Finally, the president challenged Republicans, who still have not offered an alternative to Obamacare after relentlessly attacking it for more than four years, to put out their own ideas:
If you still don’t like Obamacare — and I know you don’t — (laughter) — even though it’s built on market-based ideas of choice and competition in the private sector, then you should explain how, exactly, you’d cut costs, and cover more people, and make insurance more secure. You owe it to the American people to tell us what you are for, not just what you’re against. (Applause.) That way we can have a vigorous and meaningful debate. That’s what the American people deserve. That’s what the times demand. It’s not enough anymore to just say we should just get our government out of the way and let the unfettered market take care of it — for our experience tells us that’s just not true. (Applause.)
BOTTOM LINE: While Republicans were attacking Obamacare and holding a hearing on space aliens today, the president laid out a sweeping agenda to expand the middle class, extend ladders of opportunity, and build an economy for the 21st century.