Editors note: A very insightful editorial by the Pittsburgh Post Gazette folks.
A new analysis that shows the U.S. middle class is no longer the world’s richest should alarm more than just those in the nation’s dwindling middle.
Decades-long trends that have shifted the nation’s wealth to the top and widened the gap between rich and poor have undermined democracy. They also have weakened the consumer-driven economy.
No one understood the importance of a healthy middle class better than Henry Ford. In 1914, he more than doubled the wages he paid his workers. The $5, eight-hour workday was a bold strategy to lower employee turnover and enable them to buy Ford cars.
WASHINGTON (AP) — President Barack Obama isn’t talking about it and neither is Mitt Romney. But come January, 163 million workers can expect to feel the pinch of a big tax increase regardless of who wins the election.
A temporary reduction in Social Securitypayroll taxes is due to expire at the end of the year and hardly anyone in Washington is pushing to extend it. Neither Obama nor Romney has proposed an extension, and it probably wouldn’t get through Congress anyway, with lawmakers in both parties down on the idea.
Even Republicans who have sworn off tax increases have little appetite to prevent one that will cost a typical worker about $1,000 a year, and two-earner family with six-figure incomes as much as $4,500.
Why are so many politicians sour on continuing the payroll tax break?
The economic recovery slowed down in June. Consumer spending fell by .02 percent, which can be blamed in part on rising gas and food prices. Workers saw incomes rise by only .01 percent, the smallest increase in nine months. On a positive note, personal savings rose 5.4 percent.
Hiring in June was at the lowest level in nine months. Only 18,000 net jobs were added and the unemployment rate rose to 9.2%.
Some economic forecasters are lowering their outlook for economic growth in the second half of the year from 2.5 percent to 2.0 percent.