Education and Labor Committee Hears Testimony On The Middle Class Squeeze 

President Bush's View of the Economy

Contradicted by Witness Testimony at Hearing

Wednesday, January 31, 2007

WASHINGTON, DC -- In testimony before the House Education and Labor Committee today, a flight attendant for a major U.S. airline described the difficulties she experienced when her employer used bankruptcy as an excuse to shred its labor contracts and reduce its employees' pay and benefits.

"I am now working longer and longer days as well as having to spend more and more time away from home," testified Rosemary Miller during a hearing about the economic squeeze on America's middle class families. "But not only am I working longer; I'm earning less. My pension has been frozen. My benefits have been reduced . . . And it angers and saddens me that I am going to have to withdraw the small sum that I managed to carefully set aside for my children's first semester of college in order to keep paying the mortgage and keep my house - our home - a little longer."

U.S. Rep. George Miller (D-CA), the chairman of the Education and Labor Committee, convened today's hearing - the full committee's first hearing of the new Congress - to learn from workers and economic experts about the challenges facing the middle class. In his opening remarks at the hearing, Chairman Miller said that strengthening America's middle class is the top priority for the committee this year.

"While the business pages across America report that profits and productivity are up for many corporations, we know that's only half of the economic story," said Chairman Miller. "The other half is the story of how middle class Americans are struggling to make ends meet. I hear from workers who were laid off from a good-paying manufacturing job and wound up in a new job that pays far less than did the one they lost. I hear from workers whose company just dumped their pension plan, forcing them to scramble to find other ways to get by in retirement. I hear from workers whose basic expenses - for housing, food, education, transportation, and healthcare - keep going up, even while their paychecks stay about the same size."

Jacob Hacker, a professor at Yale University, said that American families increasingly "find themselves on a shaky financial tightrope, without an adequate safety net if they lose their footing." This is important, Hacker added, because "economic security is not opposed to economic opportunity. It is a critical cornerstone of opportunity. And restoring a measure of security in the United States today is the key to transforming the nation's great wealth and productivity into an engine for broad-based prosperity and opportunity in a more uncertain economic world."

Eileen Appelbaum, a professor at Rutgers University and the Director of the Center for Women and Work there, noted that the pressures families face today are not purely economic, but also revolve around time. "Middle income families are working longer hours as they try to keep up their living standards," said Appelbaum. "The result is that working families, and especially working mothers, face a time squeeze as well, caught between the demands of being responsible employees and the need to be responsible parents and family members."

And Christian Weller, an economist at the Center for American Progress, discussed how the middle class squeeze is driving up families' indebtedness. "Despite an economic recovery that has already lasted more than five years, middle class families are struggling to pay for a home, health insurance, transportation and their children's college education due to weak labor market gains and sharply higher prices," said Weller. "To pay for these necessary expenditures, middle class families are borrowing record amounts of money, leaving them unable to put away much extra cash for a rainy day."

The Education and Labor Committee will convene another full committee hearing next week to begin discussing solutions to the economic challenges facing America's middle class. Already this month, the House has taken two important steps towards addressing the middle class squeeze by voting to raise the national minimum wage and reduce interest rates on need-based federal student loans for college.

The hearing came the same day that President George W. Bush visited Wall Street to discuss the economy. Chairman Miller said today that the President's continued refusal to acknowledge the challenges facing low- and middle-income families shows how out of touch he is with the economic experiences of most Americans.

"For the second day in a row, the President has painted an incomplete picture of the economy - a picture that continues to ignore the very serious and very real economic hardships facing our nation's middle class families. Again today the President spoke about the need to keep our economy strong, but failed to offer solutions that will address the financial worries of millions of Americans. Ensuring our nation's economic strength begins with ensuring that all families and members of our workforce can share in the benefits of a growing economy," said Miller. "Our nation simply cannot afford a President who refuses to recognize that this economy isn't working for the very people who helped build it."

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