Tags: Middle class | income | private employers | economy

NYT's Barro: 'Middle-Income Fortunes Driven Mostly by Private Employers'

By    |   Monday, 02 March 2015 09:05 AM


Much has been made of the plight of the middle class, with income inequality growing and average hourly wages rising only 1.7 percent last year.

Politicians on both sides of the aisle have introduced policy proposals with the middle class in mind. But hold on a minute, says New York Times columnist Josh Barro.

"The big challenge for President Obama — and for Republicans seeking their own agenda to woo the middle class — is that middle-income economic fortunes are driven mostly by private employers," he writes.

"The government can raise the minimum wage, but it can’t make employers raise wages for workers already making well above that. It can give out targeted tax cuts, but these can’t have large effects on the average family’s income without getting really expensive. It can impose labor regulations, but it cannot overcome the fact that employers are powerful when many workers chase a small number of jobs."

Meanwhile, Steve Cortes, founder of Veracruz research firm, told Newsmax TV that the Federal Reserve's easing program and the Obama administration's regulatory regime are hurting the middle class.

"Federal Reserve policy has really punished middle class folks," he said. "They don't tend to own a whole lot of stocks, so they're not enjoying the S&P 500 at all-time highs. Or if they do, it's in their retirement account, it doesn't affect their day to day living right now."

So what is the impact of Fed easing on the middle class?

"It punishes savers, who are earning little to nothing on your savings accounts, particularly for older folks who are on fixed incomes," Cortes said. "This has really been a crushing policy to them."

Then there's the second part, which is "even more damning — regulation," Cortes said. Regulation and taxation out of Washington are crushing entrepreneurship. . . . We've had more businesses closing than opening."

Most middle class people work their way up the income ladder through entrepreneurship, he said.

"It's the American way of entrepreneurial capitalism that has become much more difficult with increasingly meddlesome regulation and extremely high taxation."

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Much has been made of the plight of the middle class, with income inequality growing and average hourly wages rising only 1.7 percent last year.
Middle class, income, private employers, economy
367
2015-05-02
Monday, 02 March 2015 09:05 AM
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