A Strong Middle Class Blog

  • Growing Businesses and Putting Unemployed Workers Back on the Job

    Yesterday, Vice President Biden held a Middle Class Task Force roundtable with small business employers and employees who are participating in highly successful jobs programs around the country.  These state programs, funded through part of the Recovery Act, give employers a strong incentive to hire by paying for part of a new employee’s wages.  These jobs programs are now up and running in 31 different states, and according to the most recent study, the programs will have placed 186,000 workers in jobs by the end of September.

    We heard today about just how effective these subsidies have been.  We had small business owners from Florida and New York telling us about how they have grown their businesses by bringing on new workers and training them.  And we heard from some of those workers, who told us about the difference these programs have made in their lives by ending tough spells of unemployment and putting their careers back on track.

    We’ve heard stories like these from all over the country.  As the economy has started turning around, small business owners are starting to think about expanding, but often they’re not sure they can afford the cost of training new workers.  By helping cover the cost of new employees in those crucial first months, these subsidized jobs programs are allowing businesses to finally start putting unemployed workers back on the job.

    Unfortunately, the funding for these jobs programs will expire at the end of September unless Congress passes an extension, which is under debate right now.  This Administration is continuing to push Congress to extend these programs, but stories like the ones the Vice President heard today really demonstrate the importance of that extension.  These programs are creating jobs that are making a real difference in the lives of workers – both unemployed workers who are struggling not to fall out of the middle class, and those who aspire to work their way into the middle class for the first time. 

    To learn more about these subsidized jobs programs, including all the jobs they’re creating right now and why it’s so important that Congress continues them for another year, take a look at this Middle Class Task Force white paper (pdf).

    Tobin Marcus is the Deputy Economic Policy Advisor in the Office of the Vice President

  • Why Wall Street Reform Matters for the Middle Class

    Yesterday, Vice President Biden and Treasury Secretary Geithner traveled to Milwaukee, Wisconsin for a Middle Class Task Force (MCTF) meeting about the need for Wall Street reform.   Why, you might, would the VP’s MCTF take up the cause of reforming the way financial markets work—or don’t work?

    Because the outcome of this debate—the policies that ultimately come out of it—are of great importance to the economic lives of middle-class families.

    Speaking at the University of Milwaukee-Wisconsin’s Sheldon B. Lubar School of Business, the Vice President stressed two reasons why this matters so much.  First, the meltdown might have emanated from Wall Street, but it reached Main Street with a vengeance.   The Great Recession was born of a housing bubble inflated by negligent oversight, the absence of transparency in key financial markets,   and a reckless pursuit of risk that brought this economy to the brink of depression.  The result is all too well known: millions of jobs lost, housing values and retirement savings decimated, small businesses shuttered, and an already-pinched middle class squeezed even harder.

    Second, and this may be a little hard to believe right now, the VP reminded us that the stock market exists for a good reason.  When it’s working properly, it directs capital to the most productive investments in order to make something real and useful for society’s benefit, creating good, middle-class jobs along the way.

    Historically, at least when it wasn’t beset by reckless speculation, the financial system played a key role in our economy, doing everything from financing the next great industry, to helping firms borrow money for investments in factories, to providing the overnight lending needed to stock shelves in the mall.

    In fact, this system is so important that you can’t have a healthy economy without it.  But regulators, lulled by fairy tales of self-correcting markets, fell asleep at the switch, and Wall Street went from playing a productive role in our economy by distributing capital to useful investments to playing an actively destructive role by diverting that capital into their own private casinos.

    There’s no way the middle class can get their fair share of the growth when that’s happening.

    Vice President Biden Talks Wall Street Reform in Milwaukee

    Vice President Joe Biden and Treasury Secretary Tim Geithner answer questions from the audience after delivering remarks on Wall Street Reform during a Middle Class Task Force event at the University of Wisconsin-Milwaukee student union, in Milwaukee, Wisconsin, April 27, 2010. (Official White House Photo by David Lienemann)

    After they spoke, Vice President Biden and Secretary Geithner opened up a discussion with the public, taking questions from the audience about Wall Street reform.   We got some great questions, which gave the Vice President and the Secretary a perfect opportunity to explain why we’ve proposed the reforms that we have, and how those reforms will prevent another painful financial crisis like the one we just experienced.

    We’ve just learned that the Senate has allowed debate to begin debate on this critical legislation.  Our nation now has a historic opportunity to reform this central aspect of our economy.   In the name of the great American middle class, it is an opportunity we must not squander.

    Jared Bernstein is Chief Economic Advisor to the Vice President

  • A Triple Win

    Last October, the Middle Class Task Force and the Council on Environmental Quality released a report called “Recovery Through Retrofit”(pdf). “Retrofitting” is a fancy word for making your house more energy efficient and more comfortable – everything from putting in a new water heater to sealing up cracks and openings where air can leak into and out of a home.

    Our report identified some of the biggest barriers to building a strong, sustainable home energy retrofit industry. And it laid out an action plan to overcome them by making retrofits more affordable, giving homeowners straightforward information about the benefits of energy efficient upgrades, and building a well-trained workforce to get the job done.

    For the last several months, we’ve been working hard to implement the recommendations in our report. Yesterday, the Vice President made an announcement that builds on the work we’ve been doing. He announced that 25 communities across the country have been selected for “Retrofit Ramp-Up” awards through the Recovery Act. This program will create thousands of jobs and allow these communities to retrofit hundreds of thousands of homes and businesses while testing out innovative strategies that can be adopted all over the country.

    Growing the retrofit industry is a priority of the Task Force because it will create jobs, cut energy use and help families save money. As the Vice President said yesterday, it’s a “triple win.” So we hope you’ll take some time to learn more about Retrofit Ramp-Up. And if you missed our Task Force report the first time around, please check it out (pdf).

    Happy Earth Day from the Middle Class Task Force!

    Brian Levine is the Deputy Domestic Policy Advisor to the Vice President.

  • Project Labor Agreements: A Better Deal for All

    One of the first actions taken on behalf of the Middle-Class Task Force was President Obama's signing of Executive Order (EO) 13502, encouraging executive agencies to consider requiring the use of project labor agreements (PLAs) when they engage in large-scale construction projects. Project Labor Agreements are pre-hire collective bargaining agreements with one or more labor organizations that establish the terms and conditions of employment for a specific construction project.

    The use of a Project Labor Agreement can provide structure and stability to large construction projects. PLAs also help ensure compliance with laws and regulations governing workplace safety and health, equal employment opportunity and labor and employment standards. The coordination achieved through PLAs can significantly enhance the economy and efficiency of Federal Construction projects.

    As Secretary of Labor Hilda Solis said, "Project Labor Agreements are a win-win; they benefit businesses, workers and taxpayers. I've seen the track record in cities like Los Angeles -- high quality work on projects done on time, on budget and good job and training opportunities that strengthen our communities."

    The final rule that technically implements the President's EO goes on the books tomorrow. It builds on the extensive use of PLAs by Federal Agencies, the Department of Energy and the Tennessee Valley Authority, the use of PLAs in the private sector and the extensive use of PLAs in state and municipal construction projects.

    As of the summer of 2009, 21 of 25 Department of Energy construction projects were, or were slated to be, covered by PLAs. As Ines Triay, Assistant Energy Secretary for Environmental Management put it, "PLAs have been a valuable tool for the accomplishment of the environmental clean-up and management mission of the Department of Energy. They contribute to the economy and efficiency of Department of Energy construction projects by ensuring timely completion of our projects within budget. They also lead to lower rates of injuries and illnesses."

    The Tennessee Valley Authority has used Project Labor Agreements on its construction projects for nearly 19 years. In the nearly 200 million person hours of work on Tennessee Valley Authority construction projects using Project Labor Agreements, there have been no formal strikes or any organized work stoppages. The rate of injuries on these projects has also been significantly reduced.

    Project Labor Agreements have been used at the State and municipal levels in all 50 States and the District of Columbia. Use of PLAs at the State and local level has been connected to an array of construction projects covering an expanding range and size of projects -- from schools, hospitals, roads, bridges and police buildings to convention centers, courthouses, manufacturing facilities, airports, power plants, transit systems, stadiums, and a prison.  And increasingly, PLAs have included provisions that ensure access to construction careers -- good safe jobs and valuable job training -- to all members of the community.

    Project Labor Agreements have also been used by the private sector for a variety of construction projects that are similar in nature to those undertaken in the public sector, including for manufacturing plants, power plants, parking structures, and stadiums. The EO and the final rule now enable Agencies to consider whether their projects might gain some of the benefits found in the private, state and local construction sectors as well.

    Despite their growing use in the private, state and local sectors, Federal use of Project Labor Agreements has been curtailed twice since 1992, including most of the past two decades. Many agency contracting offices have little knowledge of or experience with PLAs. To boost implementation of the President's Executive Order, the Middle Class Task Force convened an Inter-agency PLA Working Group to provide technical assistance to agencies on PLAs.

    The working group currently includes the Department of Energy, the Department of Labor, the Department of Commerce, the Department of Justice, the Department of Housing and Urban Development, the Department of Agriculture, the Department of Transportation, the Department of the Interior, the Tennessee Valley Authority, the National Aeronautics and Space Administration, the General Services Administration, the Department of Defense and the Office of Management and Budget.  The Department of Labor is also funding a survey of key participants in the contracting process to help us better understand how best to use PLAs in the future.
    The Middle Class Task Force Working Group on PLAs will continue to compile resources and provide assistance to Agencies as they work to implement EO 13502, helping to coordinate large projects while generating efficiency gains for businesses, the government and taxpayers.

    Jared Bernstein is Chief Economic Advisor to the Vice President 

  • Workplace Flexibility at the White House

    Yesterday, as noted by Valerie Jarrett in her post this afternoon, the White House hosted a first-of-its-kind forum on workplace flexibility.  Businesses (large and small), employees, advocates, labor leaders and experts spent the afternoon discussing why workplace flexibility matters – and trading information about options that are working in the workplace, such as telecommuting, flextime, job sharing, helping with childcare and eldercare, and predictable scheduling.

    I finished the day with three strong impressions:  a lot has been tried, tested and learned about workplace flexibility in the last decade;  there is a business case for flexibility and basic protections that allow workers to balance work and caregiving responsibilities; and this issue matters for everyone (men and women, managers and workers, people with kids and without, hourly workers and salaried workers).

    Yesterday’s forum was testament to the evolution in thinking and policy development around flexibility that has occurred in the last decade.  First, it was pretty extraordinary to have the First Lady and President host a discussion on workplace flexibility at the White House.  But beyond that, there was also recognition by all participants that this is not a niche “mommy” issue or even just an issue for parents.   As the President noted yesterday, flexibility affects the strength of our economy, the well-being of communities and the health of families. 

    One of the things that was most compelling about the discussion yesterday was the evidence companies brought to it.  In one breakout session, Dick Clark of JetBlue noted that as a relatively new company JetBlue had benefited from the work of many forum attendees, like Johnson & Johnson, that pioneered flexibility policies.  They applied what they learned, creating a highly flexible environment in their reservation center.  The result?  High employee productivity and engagement, and - critically important for their business – better customer service.  

    This example, and the dozens like it brought to the discussion, underscore the business case for flexibility. I was struck by the level of consensus among the employers at the table that flexibility policies increase engagement, productivity, and retention.  The excellent Council of Economic Advisors report released yesterday also found that companies with flexible work arrangements can actually have lower turnover and absenteeism, higher productivity and healthier workers.

    But workplace flexibility also makes sense for the economic security of the middle class – as the Middle Class Task Force has laid out in various reports.  More than ever families need both parents to work in order to maintain a middle class lifestyle.  This is especially true after a decade in which income growth for the middle class has been flat.  Two-thirds of American families with children are headed by two working parents or a single working parent.  Women are in the workforce in virtually equal numbers as men.  Of course, not everyone has children.  But as a friend recently pointed out, almost all of us have parents.  Nearly one-fifth of employed people in 2009 were caregivers who provided care for a person over the age of 50.   Put simply, the new normal for American families and workers is juggling family caregiving, lifelong learning and work.  In his remarks yesterday, the President acknowledged this - and reiterated the call for the enactment of two Middle Class Task Force proposals that will help improve middle class family economic security:  increasing the Child and Dependent Care Tax credit for middle class families and providing more support for people caring for elderly family members or a person with a disability. 

    These proposals and workplace flexibility make sense for all workers -not just parents and families.   If you don’t have kids, you might have parents you need to care for, an evening class to attend or a community activity that you care about.  As the President said, “workplace flexibility isn’t just a women’s issue… it reflects our priorities as a society.”

    Terrell McSweeny is Domestic Policy Advisor to the Vice President

  • A Victory for Students and Their Families

    Today, the President signed the Health Care and Education Reconciliation Act, which will end wasteful government subsidies to private student lenders and invest the savings in making college more affordable.  Over the last few months, the Middle Class Task Force has traveled the country extolling the benefits of this policy, which is a cornerstone of the President’s domestic agenda.

    Right now, the government spends billions of dollars a year subsidizing financial institutions that make guaranteed federal student loans.  According to the Congressional Budget Office, the legislation signed by the President today will generate nearly $68 billion in savings over the next 11 years by finally putting an end to these subsidies.

    We are pleased to report that part of the savings will be used to expand the Income Based Repayment program for federal student loans.  This expansion was one of the key Middle Class Task Force policy recommendations in the FY 11 Budget and the President signed it into law just two months after we first proposed it.  Borrowers who choose the Income Based Repayment program will have their monthly payments capped at 10 percent of the income they have left over after covering basic needs, and any remaining debt will be forgiven after 20 years.  Public service workers – like teachers, nurses and members of our armed forces – will have their remaining debt forgiven after 10 years. 

    These changes will not be implemented immediately, but they still represent as major step forward for borrowers with unmanageable debt burdens.  In the meantime, borrowers will continue to benefit from the existing structure of the Income Based Repayment program, which was launched last summer.  You can learn more about the program here.

    This expansion is just one of several critical investments provided for in the Health Care and Education Reconciliation Act. We will also invest more than $40 billion to ensure that all eligible students receive Pell Grants and that these awards keep up with college costs.  The legislation provides new funding for community colleges to develop online courses, build partnerships with local employers, and take other steps to help students get the skills and credentials they need to succeed. And the legislation provides additional support to Historically Black Colleges and Universities and Minority Serving Institutions.

    We will make all these investments while actually reducing the deficit. It’s a win for taxpayers and it is another important victory for America’s middle class families.

    Brian Levine is the Deputy Domestic Policy Advisor to the Vice President