What Role Can Health Care Reform Play in Restoring Middle Class Prosperity?

September 30, 2009, by Isabel Sawhill

“Much of the rhetoric coming out of Washington these days is about improving the lives of the middle class. For example, the Vice President’s Middle Class Task Force is focused on “raising the living standards of middle-class, working families in America.” The choice of language here is politically astute since 92 percent of all Americans consider themselves either middle class or working class, according to the National Opinion Research Center. Even people with annual incomes as high as $200,000 say they are “middle class.”

Taking a more limited but still broad approach and defining the middle class as the 60 percent of the population that had household incomes between $20,000 and $100,000 in 2007, we find that this group has not exactly prospered in recent years. Indeed, since 2000 their real incomes have fallen after decades of only modest increases, especially for those in the lower end of this range.

Moreover, much of any gain they’ve experienced is related to the fact that more of these families now have two earners and not because their wages have grown in line with productivity, as noted in both the Vice President’s Task Force and in Creating an Opportunity Society.”

Read full blog post here.

American Dreams

September 23, 2009, Isabel Sawhill quoted in Inside Story article:

“Ironically, the remarkable rise of Barack Obama could make it harder for Americans to recognise the shaky foundations of the American Dream. And the fact that so many people continue to believe the myth could make the problem worse. As the American researcher Isabel Sawhill writes, ‘When those who are relatively poor believe that they or their children will rise in status over time, they are less likely to complain about the status quo and more likely to accept the prevailing system.’”

The Threat to Work

September 22, 2009, by Ron Haskins

“One of the few government strategies that has proven successful in reducing poverty is encouraging or demanding that adults on welfare work, even at low wage jobs, and then subsidizing their earnings. The welfare reform legislation of 1996 is widely viewed as the origin of this two-part strategy. The 1996 reforms and a strong economy produced big increases in employment by poorly educated single mothers.

However, the poor skills of these mothers, combined with the decades-long stagnation of wages at the bottom of the wage distribution, make it unlikely that most of these mothers will ever earn sufficient wages to avoid poverty, let alone join the middle class. Fortunately, both state and federal governments have come to the rescue by providing billions of dollars in wage supplements for these working mothers.

 In our new book Creating an Opportunity Society, Isabel Sawhill and I call these wage supplements the work support system.”

Read full blog post on Up Front, Brookings’ new blog.

Completing College at America’s Public Universities

As a panelist at this September 16, 2009 Brookings Brown Center on Education event, Isabel Sawhill compared many of the similar education themes in Crossing the Finish Line, a new book on U.S. public university degree attainment, with those in Creating an Opportunity Society.

“Like today’s authors, we emphasize very heavily — it’s really the whole theme of our book — that the route to upward mobility in our society is through the schoolhouse door.”

During her talk, Sawhill emphasized the growing disparities in educational attainment and reiterated some of the possible reasons and remedies for these disparities, as outlined in Creating an Opportunity Society.

Access full event transcript here.

Isabel Sawhill Quoted in Economist, National Affairs

Excerpt from “Poorer, but At Least Not Sicker,” the Economist, September 17, 2009 -

“Ben Bernanke, the chairman of the Federal Reserve, said this week that the recession was probably over. But unemployment could stay high even as output recovers, reckons Isabel Sawhill of the Brookings Institution, a think-tank. She thinks the poverty rate will peak above 14% and stay as high as 13% for a decade or so. Joblessness can scar those who experience it, she worries. People’s skills deteriorate and they may eventually become discouraged from seeking work.”

Excerpt from “The Evolution of Divorce,” National Affairs, Fall 2009 -

“The emergence of the divorce and marriage divide in America exacerbates a host of other social problems. The breakdown of marriage in ­working-class and poor communities has played a major role in fueling poverty and inequality, for instance. Isabel Sawhill at the Brookings Institution has concluded that virtually all of the increase in child poverty in the United States since the 1970s can be attributed to family breakdown. Meanwhile, the dissolution of marriage in working-class and poor communities has also fueled the growth of government, as federal, state, and local governments spend more money on police, prisons, welfare, and court costs, trying to pick up the pieces of broken families.” 

Bad News on Poverty, Worse to Come

September 16, 2009, by Isabel Sawhill

“With unemployment continuing to creep up to levels not seen for decades, a lot of focus has been placed on the sheer number of people without jobs. But high rates of joblessness are also pushing more people into poverty. More disturbing still is the fact that they are likely to stay there for a long time. Indeed, the poverty rate will likely remain higher than it was in 2007 for at least a decade.

The most recent data, just released by the Census Bureau, show that the poverty rate increased from 12.5 to 13.2 percent between 2007 and 2008. But this is just the tip of the iceberg; the effects of the recession on unemployment rates — and more specifically, poverty — will be felt for many years to come, according to our analysis. Thus, in the absence of a stronger safety net or more opportunity for those at the bottom, the recession could end up widening income disparities in the U.S. — disparities that were already large, long before the economic meltdown began.

Read this entire op-ed on Brookings’ website.

Read Isabel Sawhill and Emily Monea’s full analysis, “Simulating the Effect of the ‘Great Recession’ on Poverty.”

Isabel Sawhill Speaks about Creating an Opportunity Society on CSPAN

In a September 11, 2009 interview on CSPAN’s Washington Journal, Isabel Sawhill discusses possible reasons for why the poverty rate has increased from 12.5 to 13.2 percent from 2007 – 2008, according to the recently released Census report on the poverty rate. She believes that the rate will only continue to grow in the near future. She references the discussion of poverty in Creating an Opportunity Society, which argues for a combination of education, work, and family stability as a solution to poverty.

Watch the full clip.

The Bloody Crossroads

Ron Haskins referenced in September 7, 2009 David Brooks column:

“Two of my favorite essays in the first issue go right at this problem. Ron Haskins delivers a careful reading of the data on inequality and social mobility and cuts through a lot of the sloppy reporting on this issue. He points out that the surest way to achieve mobility is still the same: get married, get a degree, hold on to a job. ‘Poverty in America is a function of culture and behavior at least as much as of entrenched injustice,’ he writes. But how does government alter culture?”

Read full article here.

Five Decades of Crisis: the Persistent, Alarming Link between Illegitimacy and Poverty.

Creating an Opportunity Society cited in August 2009 National Review article

Excerpts from the article:

“IN contemporary America, nonmarital births are inextricably tied to broader socioeconomic divisions. ‘In 2007,’ write Brookings Institution scholars Ron Haskins and Isabel Sawhill in their new book, Creating an Opportunity Society, ‘the least educated women were six times as likely as the most educated women to have a baby outside marriage.’”

“More recently, Sawhill and her Brookings colleague Adam Thomas concluded that if marriage patterns had held steady at 1970 levels, the overall child-poverty rate in 1998 would have been 4.4 percentage points lower. Subsequent research by Sawhill and Haskins determined that ‘the poverty rate among families with children could be lowered by 71 percent if the poor completed high school, worked full-time, married, and had no more than two children.’”

“In their new book, Sawhill and Haskins point out that the poverty rate among married-couple families is about five times lower than it is among female-headed families with children. ‘The growth of single-parent families and smaller households along with the increased tendency for high earners to marry each other can explain roughly half of the increase in inequality between 1979 and 2004,’ they write.”

Date of Release: August 2009

Creating an Opportunity Society

By Ron Haskins and Isabel Sawhill

In Creating an Opportunity Society, Haskins and Sawhill address what it will take to help more people achieve the American Dream. They focus on three routes to upward mobility among the less advantaged: education, work, and strong families.  Drawing on a wealth of data and research on recent trends in poverty, inequality, and economic mobility, they argue that it will take a combination of personal responsibility and expanded government assistance to make the American Dream a reality for families who are now stuck at the bottom. The book calls for a gradual reallocation of federal resources from the elderly to working-age families and their children and a new set of policies to help the latter advance in these troubling economic times.