Time for Progress! Middle-Out Economics

“This growing inequality isn’t just morally wrong; it’s bad economics. When middle-class families have less to spend, businesses have fewer customers. When wealth concentrates at the very top, it can inflate unstable bubbles that threaten the economy. When the rungs on the ladder of opportunity grow farther apart, it undermines the very essence of this country.”

– President Barack Obama, July 24, 2013

I believe that the majority of Americans have either felt first hand, or have seen the growing economic gap between those in poverty and the minority of those who live in luxury. Over the last few decades the Middle Class has been disappearing at an alarming rate, and in effect are being pushed out of this category becoming instead what many economists deem the working poor.

President Barack Obama spoke on this very issue in July of 2013 and as of today February 13, 2016 not a whole lot has changed. Part of the problem lies with those men and women in power who have the means to effect lasting change BUT do not want to give up their own influence. The larger problem, however, lies with the American populous. It is time that the masses rally for a change in the system.

The days of Trickle Down Economics needs to come to an end; it does not work. The idea that giving tax breaks, and effect money, to the 1% in the hopes that these wealthy CEO’s will expand business, create new jobs, and in effect boost the economy is not only flawed but has proven not to be true. The truth of the matter is, the money stays within their own pockets, going instead to the creation of super packs and the buying of potential presidential candidates. Simply put the conservative approach has failed.

The question posed at this point, is how do we effect change? Middle- Out Economics! Whether you are aware of your own understanding of the issue or not, chances are you have heard a bit of the debate already. Think back to the question of whether or not McDonald’s employees deserve $15 an hour… sound familiar?

Middle-Out Economics in Two Sentences: 

In order to grow the economy from the middle class out, wealth needs to be concentrated within the middle class consumers. Through the middle classes spending jobs are created.


At this point I suspect you are thinking; All of this sounds great, but how do we put these ideas into practice. Here is how:

Invest in Middle Class growth: Education, infrastructure, and alternative energy. Invest in innovation, challenge existing ways of doing things and invest in a brighter future!

Tax Everyone:  The majority of multibillion dollar corporations are getting out of paying their taxes. Far too often large corporations who make most of their wealth off of the American consumer dodge their tax burden all together, and those that do pay do so grudgingly and at the lowest rate possible. It is time they pay up and pay back the American people!

America prides itself of the idea of equality, but there is a flaw in a system of taxing the American people. Looking at a website TaxAct.com to simulate the taxes taken out of two different single person’s incomes; these are the results I have gotten in regards to the 2015 tax rate. A single person making $60 thousand per year is taxed at 17.99% of their income; meaning that $10,793.75 is subtracted from their wages, leaving the total that the person has to live off of at $49,206.25. Now looking at a single person making $1 million dollars over the course of the year. Though this person is taxed at a higher rate of 35.24%, it only accounts for $352,369.05 out of the whole, leaving $647,630.95 in their hands.

Minimum Wage: This goes along with the $15 per hour fast food wage. July 2015, Bernie Sanders stated,

“It is a national disgrace that millions of full-time workers are living in poverty and millions more are forced to work two or three jobs just to pay their bills. In the year 2015, a job must lift workers out of poverty, not keep them in it. The current federal minimum wage of $7.25 an hour is a starvation wage and must be raised to a living wage.”

The truth is that it is not only ethically and morally wrong that Americans working full time are living in poverty but it is also terrible practice from a business stand point as well! The fact is that consumers are the ones who fuel the economy!

Heather Boushey makes an amazing point:

“Middle-class families are important to the economy in two ways. First, they create demand. U.S. households account for $7 out of every $10 spent in the economy, and, considering that 60 percent of households are middle class, their spending patterns to a large degree determine overall demand. Second, to put it bluntly, families produce and reproduce people. Families are where workers rest, eat, and prepare for the next workday; where future generations of workers are raised and educated; and where the old and the sick are cared for. If middle-class families cannot support these functions, it negatively affects the nation’s stock and flow of what economists call “human capital”—the education, training, and health of the potential labor force. This is critical because a nation’s human capital drives long-term economic growth.”

With Middle Class households accounting for 60% of the countries spending, the raising of the National minimum wage will help to increase the standard of living for American families along with being an important step in building a more robust economy.

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