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The Middle-Class Squeeze: A Picture of Stagnant Incomes, Rising Costs, and What We Can Do to Strengthen America’s Middle Class

October 21, 2014 Comments off

The Middle-Class Squeeze: A Picture of Stagnant Incomes, Rising Costs, and What We Can Do to Strengthen America’s Middle Class
Source: Center for American Progress

The American middle class is in trouble.

The middle-class share of national income has fallen, middle-class wages are stagnant, and the middle class in the United States is no longer the world’s wealthiest.

But income is only one side of the story. The cost of being in the middle class—and of maintaining a middle-class standard of living—is rising fast too. For fundamental needs such as child care and health care, costs have risen dramatically over the past few decades, taking up larger shares of family budgets. The reality is that the middle class is being squeezed. As this report will show, for a married couple with two children, the costs of key elements of middle-class security—child care, higher education, health care, housing, and retirement—rose by more than $10,000 in the 12 years from 2000 to 2012, at a time when this family’s income was stagnant.

As sharp as this squeeze can be, the pain does not stop at one family, or even at millions of families. Because of the critical role that middle-class consumers play in creating aggregate demand, the American economy is in trouble when the American middle class is in trouble. And the long-term health of the U.S. economy is at risk if financially squeezed families cannot afford—and smart public policies do not support—developing the next generation of America’s workforce. It is this workforce that will lead the United States in an increasingly open and competitive global economy.

This report provides a snapshot of the American middle class and those struggling to become a part of it. It focuses on six key pillars that can help define security for households: jobs, early childhood programs, higher education, health care, housing, and retirement. Each chapter is both descriptive and prescriptive—detailing both how the middle class is doing and what policies can help it do better.

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The Skinny on Corporate Inversions

October 21, 2014 Comments off

The Skinny on Corporate Inversions
Source: Center for American Progress

Corporate financial accounting and taxation are complex subjects. For this reason, many people tune out when issues that involve corporate tax practices rise to the level of public debate. Unfortunately, many legislators shy away from these issues for similar reasons. But while corporate taxation can be mind-bogglingly complex, nontax experts can learn enough to join the debate.

As More Households Rent, How Can We Encourage Them to Save?

October 9, 2014 Comments off

As More Households Rent, How Can We Encourage Them to Save?
Source: Center for American Progress

When it comes to building wealth, renting in general tends not to be a good strategy for saving. Renter households in the United States have a median net worth—the total value of what a household owns, minus what it owes—of about $5,100. By contrast, households that own homes have a median net worth of more than $170,000. Even renters with incomes comparable to their homeowner counterparts make fewer financial investments and have significantly less wealth.

In the wake of the housing crisis and subsequent recession, more people are renting rather than owing homes. In many jurisdictions, renting is even more expensive than owning. Yet when a homeowner remits a monthly mortgage payment to their lender, a portion of that payment builds equity in the home, which belongs to the homeowner. When a renter pays monthly rent to a landlord, that money is gone for good. The absence of this “forced savings” of a mortgage payment is one of the reasons renting families have only a small fraction of the savings cushion available to most homeowners.

How Shortsighted Spending Cuts Increase Waste, Fraud, and Abuse

October 8, 2014 Comments off

How Shortsighted Spending Cuts Increase Waste, Fraud, and Abuse
Source: Center for American Progress

Critics have described some of the federal government’s austerity over the past several years as “penny-wise and pound-foolish.” Across-the-board spending cuts may have reduced short-term budget deficits, but they also slowed economic growth and job creation while undermining long-term investments in infrastructure, education, and innovation. Some cuts, however, not only damaged the economy, but also targeted sectors of the federal budget devoted to preventing wasteful spending or ensuring that the government collects revenues efficiently and fairly. In short, those spending cuts cannot even be described as penny-wise.

It may be counterintuitive to imagine a spending cut that increases deficits, but when cuts hinder competent program administration and oversight, the resulting increase in waste, fraud, and abuse is often larger than the related spending cut. Everyone agrees that waste, fraud, and abuse should be prevented in federal programs, but making that happen is easier said than done. Competent administration depends on adequate staff and resources, and rooting out cheating and corruption requires strong oversight.

This issue brief identifies four sectors of the budget where spending cuts have increased deficits: the Internal Revenue Service; inspectors general throughout the federal government; program integrity for major health care and disability programs; and funding to help Congress make better budget decisions, with a focus on the Government Accountability Office, or GAO.

State of Asian Americans and Pacific Islanders Series

October 7, 2014 Comments off

State of Asian Americans and Pacific Islanders Series
Source: Center for American Progress

Asian Americans and Pacific Islanders, or AAPIs, are a significant factor in the changing demographics in the United States. But the lack of centralized and accessible data has created a large knowledge gap about this fast-growing and influential group. Data about this group have often not been available or presented in a way that is accessible to policymakers, journalists, and community-based organizations.

The Center for American Progress in conjunction with AAPI Data, a project at the University of California, Riverside, have launched a series of reports on the state of the Asian American and Pacific Islanders communities, featuring the most comprehensive research and analysis of its kind for the AAPI population in the United States. The report series will provide an unprecedented look at this community and provide new insight and analysis along various issue areas including: demographics, public opinion, immigration, education, language access and use, civic and political participation, income and poverty, labor market, consumer market and entrepreneurship, civil rights, health care, and health outcomes.

Innovations in Apprenticeship: 5 Case Studies That Illustrate the Promise of Apprenticeship in the United States

September 29, 2014 Comments off

Innovations in Apprenticeship: 5 Case Studies That Illustrate the Promise of Apprenticeship in the United States
Source: Center for American Progress

In 2007, spurred by a projected skills gap in South Carolina’s workforce, state policymakers and the South Carolina Technical College System established an innovative apprenticeship program called Apprenticeship Carolina. Today—after just seven years—Apprenticeship Carolina consists of around 700 employer partners and over 10,400 current and former apprentices. This is just one example of many innovative apprenticeship programs emerging across the United States. From Vermont to Michigan to Washington state, governments, employers, workforce planners, and education stakeholders are making important new investments in this critical workforce training tool.

As detailed in the recent Center for American Progress report, “Training for Success: A Policy to Expand Apprenticeships in the United States,” apprenticeship is a workforce-training model that combines on-the-job training with classroom-based instruction and has been proven to benefit employers, employees, and the overall economy. Apprenticeships allow businesses to meet the growing demand for skilled workers, and they lead workers to higher wages and better employment outcomes. Furthermore, they are a smart public investment. A recent study in Washington state found that for every $1 in state investment in apprenticeships, taxpayers received $23 in net benefits, a return that far exceeds that of any other workforce-training program in the state.

Assault Weapons Revisited: Policy Options for Regulating Rifles, Shotguns, and Other Firearms 20 Years After the Passage of the Assault Weapons Ban

September 17, 2014 Comments off

Assault Weapons Revisited: Policy Options for Regulating Rifles, Shotguns, and Other Firearms 20 Years After the Passage of the Assault Weapons Ban
Source: Center for American Progress

This report considers how gun laws have evolved to address different classes of firearms and looks more broadly at how federal and state laws treat rifles and shotguns differently than handguns and whether all of those distinctions continue to make sense. It also examines data on the changing nature of gun violence and the increasing use of long guns and assault rifles by criminals, with a focus on Pennsylvania as a case study.
Additionally, this report offers a new framework for regulating assault weapons and other special categories of guns that balances the desire of law-abiding gun owners to possess these guns with the need to protect public safety from their misuse in dangerous hands. These policies include:

  • Require background checks for all gun sales
  • Require dealers to report multiple sales of long guns
  • Equalize interstate sales of long guns and handguns
  • Require federal firearms licenses for individuals that manufacture guns using 3D printers
  • Bar possession and use of machine guns by individuals under the age of 16
  • Require a permit for possession of assault weapons
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