Task Force on Middle Class Working Families

Sent to Jan 30, 2009 to Vice President Biden via www.strongmiddleclass.gov CC: President Obama (via whitehouse.gov), Senator Dick Durbin, Congresswoman Melissa Bean, Congressman John Boehner (House Minority Leader), Senator Mitch McConnel (Senate Minority Leader), Congressman Steny Hoyer (House Majority Leader), Speaker Pelosi, Senator Harry Reid (Senate Majority Leader)


Dear Vice President Biden,

Congratulations on your appointment to lead the Task Force on Middle Class Working Families.

I too firmly believe that a strong middle class is the only future for America’s long-term prosperity. The middle class is the “consumption engine” of the U.S. economy; therefore there is no hope for sustained economic strength without a strong middle class.

I have been in management roles for the last eight years of my career and I know from first-hand experience that the middle class has been going backwards. A 3% annual raise has not kept up with the cumulative effects of inflation, rising energy prices, rising healthcare costs and rising education costs. The middle class has, indeed, been going backwards.

As you have pointed out, the most recent economic expansion did nothing to help the standing of Middle America. Despite strong productivity increases, record corporate profits, healthy dividends and ballooning executive compensation, the middle class continued to go backward.

This letter addresses four topics: definition of middle class, the productive role of organized labor, supporting the non-union middle class, needed cultural changes within corporate America.

1. Definition of Middle Class
Most politicians talk about the importance of the middle class, but none define what “middle class” means. I feel that the establishment of a working definition of “middle class” is essential for the effective function of your Task Force.

The problem with the term middle class is that is encompasses so many Americans: construction works, law enforcement, sales professionals, middle managers, accountants, factory workers, university professors, journalists, warehouse managers…the list of potential professions and families that comprise the middle class is endless.

This economic classification includes the most, as well as the least educated Americans. The middle class includes Americans with strong upward mobility potential, as well as Americans whose futures look less promising if current career paths are continued. The middle class includes families and individuals who are quite effective at personal/household financial management, as well as individuals and families who live dangerously beyond their means.

For the sake of reasonable policy creation, I believe that a working definition of “middle class” must include a computation of household size and the geographic location of the household. Geographic consideration is an absolute necessity as a reasonable household income in the Chicagoland area (where I live) needs to be considerably higher than the household income of a family living in rural Kansas for example.

Without a reasonable definition of “middle class” no one will know what the Task Force’s discussions and purposes are really about. A definition is also necessary for the transparency you seek to achieve.

2. Productive Role for Organized Labor
In many ways the labor movement and labor unions themselves have gone horribly wrong. Labor unions are businesses just like any other and have gotten greedy and self-interested over the years. The purpose of labor unions, in my opinion, should be to ensure safe and fair working conditions and to promote employment security for its members.

There is an important distinction between job security and employment security that unions (and too many Americans) don’t seem to understand. Many unions, particularly the UAW, have focused on job security and have worked to try to ensure continued pay checks for labor that is no longer needed. Within an environment of global competition, no company can successfully and profitably operate with the burdens of job pools and other mechanisms that do not allow for efficient labor resource management.

A focus on employment security, on the other hand, calls for assuring that workers have current and ever expanding skill sets. A focus on employment security is the difference between having or not having a job and having a career.

Too many Americans and labor unions have focused on having jobs, not on building careers. The skill sets of many Americans are out of date and the reality is that they are not needed in the job market of today. On the other hand, I know of many companies that cannot find workers with the skill sets they now require.

Labor unions have the organizational structure to facilitate the dissemination of continuing education—either directly providing these education services and/or providing the infrastructure for other organizations to provide the needed education.
Labor unions will be relevant and productive in today’s labor market if and only if one of their top priorities is ensuring that their members have the skills needed today—not the skills needed 20-30 years ago.

Labor unions also need to be reasonable. Given ever increasing life expectancies, today’s workers cannot reasonably expect to retire at 48, 58 or 62 with full benefits. No pension system (social security or corporate pensions) was designed to support a 20-30 year retirement. Workers with physically demanding jobs likely cannot perform these jobs as they age. Therefore, unions need to be a key resource and conduit for establishing worker-union-corporation partnerships to redirect workers’ for needed purposes.

Although unions have provided productive outcomes in recent years, the negative light in which managers and executives view unions is much deserved.

I question whether or not you would bristle at the necessity to pay a union electrician (Teamster) $150.00 to plug in a light at McCormick Place in Chicago. No, not skilled electrical wiring that can only safely be done by a licensed electrician—just plugging a light into a power strip. If there is a prayer for organized labor and corporations to have effective partnerships, this kind of nonsense must be forced to stop.

3. Supporting the Non-Union Middle Class
As you well know, there are millions upon millions of non-union middle class Americans. These Americans are also grappling with stagnating and regressing standards of living. The three keys for these Americans, I believe, are fair taxation policies, affordable education and affordable healthcare (these three areas are key for union employees as well).

Within this discussion I would like to focus on education. I believe that it is vital for our pre-school and K-12 education systems to be overhauled in order to assure America’s continued competitiveness on the world stage. The simple fact is that our education system is in disarray, is inefficient/ineffective and we are falling dangerously behind.

Our universities continue to be the envy of the world, but are becoming less and less affordable for many Americans. Without a college education, most of our youth have little chance for a prosperous life. I have an 11-year-old stepson. I recently calculated that it will cost approximately $130,000 to fund his Bachelors degree at the University of Illinois (an in-state school). This is ridiculous. The two questions that surface in my mind are: Are we funding state universities properly AND are state universities managing their money properly with the proper priorities?

Finally, we need affordable adult continuing education programs and education outlets. The world is changing too quickly to permit adults to graduate from high school or college and never step foot in a classroom again. Community colleges can and do fill some of this need, but I believe that this is an issue that needs to be studied carefully. The current programs at many community colleges are part of the answer, but not a complete answer.

4. Needed Cultural Changes in Corporate America
This is the toughest issue to tackle. The reality is that corporate America has become greedy. Attractive quarterly earning statements and annual reports are far more valued that quality corporate management. Corporate America is solely rewarded for today, next month and next quarter. These pressures make good people do really unproductive, and in some cases, bad things.

As a society, we must learn how to celebrate and reward long-term interests and sound business practices. In my view, sound business practices include fair treatment of employees—allowing everyone to enjoy the fruits of a successful team effort.

Vice President Biden, I hope that some of my insights are productive and are considered as you steer the directions of the new Task Force.

I wish you the best of luck on this most important journey.

Sincerely,

Tonia Becker VerShaw
Grayslake, IL
www.toourleaders.blogspot.com