In his keynote speech Saturday morning at the Netroots Nation conference in Minneapolis, Sen. Al Franken noted the growing income disparity between the middle class and the rich, a trend that began in the late-1970s. The Independent sat down with Sen. Franken to get some thoughts on that disparity and how the American middle class might once again benefit from economic growth.
Franken related a startling figure. “Between 1947 and 1977, we experienced three decades of incredible growth, growth that flowed to the middle class and as we grew, we grew together. Everyone benefited,” he said. “Income for the top fifth of Americans grew by 99 percent, and the income of those in the bottom fifth rose by 116 percent. I know that’s hard to believe. The wages of the bottom fifth grew more than the wages of the top fifth. Really. That happened.”
That trend has changed dramatically in the last 30 years.
As Mother Jones notes in its Plutocracy Watch feature, income grew 120 percent for the wealthiest 1 percent of Americans and 30 percent for the top fifth between 1979 and 2007. The bottom fifth, which had grown the most following World War II — by 116 percent — lost 30 percent of their income since 1979.
How does America get back to the middle class glory days between World War II and before Reagan took office? Education is the key, Franken argues.
“We have to do a number of things, one of which is educate our kids. And that’s why I’m so intent on making sure that the re-authorization of the Elementary and Secondary Education Act is done right,” Franken said. “It’s one area where it is absolutely crucial that we do it right for our future prosperity.”
The ESEA was originally passed in 1965 as a part of the War on Poverty, and was re-authorized in 2001 as the No Child Left Behind Act by President Bush and passed by a bipartisan Congress. It has become unpopular with both Democrats and Republicans who hope to make significant changes in its renewal this year.
“Education is so important; the nature of our economy is changing,” Franken said. “We really have to create an education system that prepares kids for this century’s economy. There is no way around it. We are more global and there’s nothing we can do about it.”
Franken also argued for a fairer tax code.
“I think that top marginal rates can go up for people over — I don’t know what the magical number is — it might be $350,000 instead of $250,000. Because when Clinton made it $250,000 it was 1993.
Another idea floated by Franken was making Social Security taxes more progressive by exempting the the first $10,000 in income. “There are all kinds of ways to change the progressivity of Social Security and fund it better,” he added.
He said that Republican proposals to jump-start the economy are detrimental to the middle class.
“It’s basically that you can never retire, unless you are one of the ones that made an incredible amount of money. They have this philosophy — I guess — of social Darwinism and survival of the fittest,” he said. “I don’t believe that at all. You know, Henry Ford said, ‘I want my factory workers to earn enough money to buy a Model T Ford.”
It was the philosophy adopted by Ford that helped create a burgeoning middle class.
“We have had the most growth during the period when we had the Great Evening, when the middle class was the strongest. It actually creates growth and greater disparity does not create growth.”