WASHINGTON, July 16 (UPI) -- Middle-class families in the United States face new obstacles in today's economy, including longer hours for parents, reduced employee benefits, and decreased economic security, some experts say.
"Families are working longer for less," said Jared Bernstein, senior economist at the Washington, D.C.-based Economic Policy Institute. Bernstein spoke at a panel on "Economic Opportunity and Values: The Policy Behind the Message," at the nonpartisan New America Foundation in Washington, D.C.
Bernstein said that stagnant wages and rising health care, education, and other costs often force both parents to work, and to work longer hours. While one parent stayed at home full time in 70 percent of families in 1960, today both parents work in 70 percent of families, according to the Bureau of Labor Statistics.
According to the Paris-based Organization of Economic Cooperation and Development Employment Outlook, the number of American hours of work per capita is the highest of all the industrialized nations surveyed, including countries in Western Europe, the British Commonwealth, and Japan.
"What's moving families ahead is more wives working more hours," Bernstein said.
According to Karen Kornbluh, director of the Work and Family Program at NAF, one source of pressure on middle-class families is reduced access to benefits like health insurance. American workers are now "competing with workers around the world for benefits," said Kornbluh.
An employee used to work at one company for most of his or her life, developing a "paternalistic relationship" where "the government uses the employer to deliver benefits," according to Kornbluh.
But the structure of today's economy has rendered much of this social safety net useless. Increasingly, parents, especially mothers, unable or unwilling to work long hours are turning to part-time work and contracting, for which employers usually do not give benefits, Kornbluh said.
"It doesn't work so well if you're not a company man," said Kornbluh of employer-based benefits.
"This is an age of limited liability for corporations, but increasingly full liability for families," said Jacob Hacker, an NAF Fellow and professor of Political Science at Yale University.
Hacker said that middle-class families face increased economic insecurity, and not just from lack of benefits. Less-skilled workers are "much more vulnerable" than decades ago, when most had unionized factory jobs, and "even relatively well-off Americans are facing increased income risk," Hacker said.
He cited the findings of the Panel Study of Income Dynamics, which has tracked the income of one set of families over forty years, saying that family income in the poorest year was usually only 40 percent of family income in the richest.
Hacker said the government should provide universal wage insurance against catastrophic loss of income. Such losses can come from ill health, leaving a job to take care of a senior, or other problems. "People need basic risk protection to have happy, productive lives in the new economy," Hacker said.
Kornbluh said she advocates health insurance for part-time workers; income insurance for time off during an illness, to take care of a child, or for sabbaticals; and minimum-leave standards to ensure that workers will have some level of time paid off.
Kornbluh said there is a "policy lag" among lawmakers who want to shore up a largely obsolete employer-based system of benefits through privatization or other means.
She believes, however, that her initiatives can still be effective for politicians on the campaign trail. Former president Bill Clinton "showed he got what Americans were going through" when he talked about the Family and Medical Leave Act on the campaign trail, said Kornbluh.
The act required companies with 50 or more employees to allow employees in certain situations up to twelve weeks of unpaid leave.
Jason Furman, director of Economic Policy for John Kerry for President, said that Kerry is working to address these issues in his platform. Kerry recently accused President Bush of creating a "middle-class squeeze" with his economic policies.
Kerry intends to expand FMLA, expand the child tax credit and make it refundable, and fully fund after-school programs under the No Child Left Behind Act, Furman said.
Kerry's catastrophic reinsurance program will "reduce [health insurance] premiums by ten percent per family," said Furman. Under the plan, the government will pay a company 75 percent after the first $50,000 of an insured employee's medical bills.
"By having a substantial private component of the health system, we're essentially shifting risk" to companies, Furman said.
But according to Ed Haislmaier, visiting research fellow at the Heritage Foundation in Washington, D.C., privatization would expand and improve health coverage. He said the government should provide tax vouchers so people can buy health plans on their own instead of through their employers.
"If you have the consumers in the driver's seat, then everyone is forced to respond to what the consumers want," Haislmaier said. "Private coverage creates a lot more flexibility."
Whatever the solution to the problems of middle-class Americans, Bernstein said it can only be implemented by strong government leadership. "I do think this will have to come from a unified political vision that gets behind these issues," he said.
