Bipartisan Group Offers Policy Plan for the Working Class

A bipartisan report released Thursday on how to restore opportunity for the neglected working class stresses tax, education, and macro-economic policies that have promoting work as their central goal.

The study, Work, Skills, Community: Restoring Opportunity for the Working Class, comes from an 18-month collaboration convened by Opportunity America and cosponsored by the American Enterprise Institute (AEI) and Brookings Institution.

Opportunity America President and CEO Tamar Jacoby said at Thursday’s launch event at AEI that it is long past time for the nation’s policymakers to focus on the working class. “For nearly two decades, policymakers have been finding ways to help every other group in the country except the working class,” Jacoby said. “The central theme is work. We have three dozen recommendations, all driven by work.”

The report defines “working class” as the nearly 40 million Americans with a high school diploma but less than a college degree who are in the 20^th to 50^th income percentiles – roughly an annual income of $30,000 to $70,000 for a couple with one child.

To help illustrate the depth of the problem, Jacoby offered statistics highlighting some disturbing working-class trends.

• In 1980, 74 percent of the working class were married; today it’s 52 percent.
• In the 1970s, 71 percent had ties to a neighborhood organization (a place of religious worship, a social club); today it’s 15 percent.

Jacoby and William Galston, a member of the study group and chair of the Governance Studies Program at Brookings, said the group tried to avoid politically fractious and overtly ideological “bumper sticker solutions” such as universal basic income or aggressively protectionist trade policies.

Galston said the group came to realize that “there is no magic wand, no silver bullet” that will revitalize the working class, but instead a slow and “arduous” process built on incremental success. “Our overall objective was to create a new social contract of shared responsibility . . . for the primacy of work,” Galston said. “There is an expectation of work for those who are able to do so and we propose to not only declare this expectation but encourage it.”

Some of the group’s specific, deficit-neutral policy proposals include:

• Adding more federal funding for career-focused education programs by eliminating tax breaks for 529 educational savings accounts and loan forgiveness for graduate students.
• Expanding the Earned Income Tax Credit to cover childless workers and experimenting with a new wage subsidy. This could be paid for by: expanding the number of families that pay estate taxes; limiting tax exemptions available to more affluent households; or raising minimum taxes for corporations that rely on tax havens.
• Strengthening work requirements for means-tested government programs, including the Supplemental Nutrition Assistance Program, while also ensuring programs have the training and support needed for job seekers.
• Making the child and dependent care tax credit more available to working class families.
• Creating a new federal program to monitor and limit opioid prescriptions.
• Reforming unemployment and disability insurance to promote work.
• Subsidizing eight weeks of paid parental leave and encouraging employers to offer up to 40 weeks of unpaid time off.
• Mobilizing communities to make the most of the job-creating investment expected to be catalyzed by the Opportunity Zone provision of the 2017 tax bill.
• Re-engaging in the Trans-Pacific Partnership trade pact process.

Working group members acknowledged the difficulty of finding consensus on some issues, and a number of divisive topics – race, immigration, the Affordable Care Act – were deliberately omitted by the panel for either being too intractable or beyond the scope of the project.

But panelists from the left and right taking part in a discussion of the report lauded the group for finding areas where they could recommend action to be taken.

“I love this report,” said Ben Harris, chief economist and senior adviser for Results for America and the former chief economic adviser for Vice President Joe Biden. “It just takes politics out of the equation. This report is written by people who actually want to get something done.”

Members of the Working Class Study Group:

• Oren Cass, senior fellow, Manhattan Institute
• Robert Doar, Morgridge Fellow in Poverty Studies, American Enterprise Institute
• Kenneth A. Dodge, Pritzker Professor of Early Learning Policy Studies, professor of psychology and neuroscience, Duke University
• William A. Galston, Ezra K. Zilkha Chair, Governance Studies Program, Brookings Institution
• Ron Haskins, Cabot Family Chair and senior fellow, economic studies, Brookings Institution
• Tamar Jacoby, president, Opportunity America
• Anne Kim, senior fellow, director of domestic and social policy, Progressive Policy Institute
• Lawrence M. Mead, professor of politics and public policy, New York University
• Bruce Reed, co-chair, Future of Work Initiative, Aspen Institute
• Isabel V. Sawhill, senior fellow, economic studies, Brookings Institution
• Ryan Streeter, director, domestic policy studies, American Enterprise Institute
• Abel Valenzuela, professor of Chicano studies and urban planning, director of the Institute for Research on Labor and Employment, University of California, Los Angeles
• Bradford Wilcox, professor of sociology, University of Virginia