This article first appeared in the New York Times.
NEW YORK — In New York, this summer has lived up to its reputation as the silly season with a pageant of political theater comic enough to entertain even the most jaded tabloid sensibility. That made President Barack Obama’s wonkish speech this week about how to strengthen the middle class particularly welcome.
Mr. Obama addressed a familiar problem. Indeed, his comments were an intentional echo of a commencement address he delivered at the same place, Knox College, in Galesburg, Illinois, eight years earlier. What was important was not, therefore, their novelty. Instead, it was the reminder that, beyond the froth of personal scandal, politics today is confronted with an existential question — how to ensure broadly shared middle-class prosperity in the 21st century.
As he did in his original 2005 speech, Mr. Obama situated the issue in broad, historical terms. The postwar era, he said, had offered the middle class “a basic bargain.” “Whether you owned a company, swept its floors, or worked anywhere in between,” the president said, the United States was a place where “your hard work would be rewarded with fair wages and benefits, the chance to buy a home, to save for retirement and, above all, to hand down a better life for your kids.”
That pact held across the entire Western industrialized world, where the postwar era was a time of strong, and widely shared, growth.
In recent decades, however, as the president put it, “that bargain began to fray.” He pointed to the most important and most worrying evidence that it had broken down: “The link between higher productivity and people’s wages and salaries was severed — the income of the top 1 percent nearly quadrupled from 1979 to 2007, while the typical family’s barely budged.”
Mr. Obama pointed to some of the familiar political drivers of this shift — weaker unions and tax cuts at the top. But, to his credit, he also noted the structural factors — in particular, technological change and globalization — that have helped hollow out the middle class. These are the heart of the problem, because they are both largely positive and hard to change. We can’t stop them, and most of us don’t want to — but we surely do want to reverse their devastating consequences for the middle class.
That is what makes a new paper by Frank Levy, an emeritus professor at the Massachusetts Institute of Technology and a lecturer at Harvard Medical School, and Richard J. Murnane, a professor at the Harvard Graduate School of Education, so timely.
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