KRWG News: New Mexico Among States With Highest Measured Levels Of Middle Class Decline


Published on Aug 13, 2015

In the last 15 years every state in the country has seen a decline in the middle class. That’s according to a Pew Charitable trust study based on Census Bureau. New Mexico and a number of other states saw about a five percent decline in middle class households. Only Wisconsin did worse with a decline of about six percent.

The recession left a trail of foreclosure, debt and unemployment.

But jobs, economic growth and profits have bounced back. US commerce data shows corporate profits were at an 85-year high in 2013. But the middle class has not reaped the benefits of that recovery.

According to the US Census bureau median incomes and the middle class have been on the decline for the last 7 years.

We spoke to some Las Crucens on what they think the government should be doing to boost the middle class. Joseph Medina works as a Spanish Interpreter and bartender he says a higher minimum wage and paid sick leave would help him support his son.

“It really helps, time off you know. Time off to spend with the family time of to spend in times of any kind of hardship or whatever. When somebody gets sick or something like that making sure people get that I guess would definitely be good.” He says.

Medina says President Obama’s push for paid sick leave for federal contractors and his push to raise the federal minimum wage are steps in the right direction.

According to the Harvard Business review higher pay and benefits would boost productivity and decrease employee turnover. But other studies say the cost of increasing employee compensation disproportionately affects small businesses.

That’s a concern for Las Crucen Judy Strevel who says the government needs to do more to support small businesses and job creation.

“Grants, different things like that. They are doing that but they should do it to a larger extent. To get these people to educate themselves to go out and do something.” She says.

Doctor Jim Peach is an economist at New Mexico State University he says the middle class is at the core of consumer demand, sustained job creation and economic growth. He talked about those issues in a recent interview with KRWG.

“What does the middle class do? The middle class buy houses, they buy automobiles, they spend money in restaurants, the middle class is essential.” Peach says.

New Mexico U.S. Senator Martin Heinrich is pushing legislation designed to help the middle class. Like raising the federal minimum wage to $12 an hour, aligning education systems with the demands of the job market and addressing higher education and housing debt.

But he says the legislative challenges that created these problems are only getting more influential.

“I think some of this is related to the influence that money has in politics today. I mean these are policies that are not in the interest of the nation as a whole and not in the interest of a strong middle class but we have seen lots of these that hurt the middle class put in place because of the influence of a few very influential and wealthy individuals. That is something that we are going to have to continue to fight and we are going to have to confront as a country,” Heinrich says.

Heinrich has introduced legislation that would limit the influence of major donors and corporate dollars in federal politics. He says the structure of taxation is a key example of a federal policy that does a disservice to the middle class and the national economy as a whole.

“Our entire tax structure has incentivized people who make their living off of investing dollars rather than things like direct labor. You often times see somebody who is just a police officer or a teacher or a plumber pay much higher effective tax rates than someone like Mitt Romney who has made a career out of investing. That is not to say we don’t want people to do very well out of investing but we also have to value labor technical work” Heinrich says.

In addition to tax reform Heinrich says to boost economic growth and support the middle class the nation must address student and household debt.

While the American middle class declines, according to 2012 DAVOS projections the middle class globally is projected to double by 2030.

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