The Endangered Middle Class: Is the American Dream Slipping out of Reach for American Families?

With a hollowing out of America’s middle class, the middle class could no longer be a solid source of economic demand without new extraordinary measures to bolster incomes. As middle-class incomes failed to keep pace with the cost of living, families increasingly had to live on credit just to maintain the lifestyle of their parents, send their kids to college, and take care of their aging parents. The lack of income growth for the broad middle class had devastating consequences for the U.S. economy when the housing market collapsed—almost taking our financial markets with it.

Unless we focus wholeheartedly on policies aimed at rebuilding our middle class, our economy will remain fragile and millions will continue to fall down the income ladder. In the remainder of my testimony, then, I will make two key points.