SOURCE: Center for American Progress
CAP Senior Economist Heather Boushey testifies before the Senate Committee on Health, Education, Labor, and Pensions. Read the testimony (CAP Action).
Thank you, Chairman Harkin and Ranking Member Enzi, for inviting me to talk to you about the importance of a broadly prosperous middle class to the future of our nation. My name is Heather Boushey and I’m a Senior Economist at the Center for American Progress Action Fund.
This hearing could not be timelier. Our country has experienced a widening income gap and a hollowing out of our middle class since the late 1970s and these trends threaten our nation’s economic growth and stability.
Many academics, pundits, and politicians point to rising income inequality as a social concern or a concern for the viability of our democracy. Economists, on the other hand, tend to posit that such income gaps between the wealthy and the rest of the citizens in developed countries are not incompatible with economic growth and thus not a key economic concern. The economic argument goes like this: Focusing on income equality for equality’s sake, or because high inequality leaves too many in poverty, or because the wealthy are pulling so far out ahead of the middle class misses the point that, in fact, this may be good for the economy as those at the top of the income scale can make the economy grow if they invest their additional income.
Empirical reality, however, has come into direct conflict with this argument.
CAP Senior Economist Heather Boushey testifies before the Senate Committee on Health, Education, Labor, and Pensions. Read the testimony (CAP Action).