KPC News Service
America’s middle class is shrinking, a study earlier this month confirmed.
Northeast Indiana may be slipping even faster than the rest of the nation.
The Pew Research Center reported the alarming statistics. The share of American households defined as middle income may have slipped below 50 percent. Nationally, the definition of middle income ranges between $48,000 and $144,000 for a family of four.
Nationwide, the median income of all U.S. households in 2014 had fallen to at 8 percent less than in 1999.
Our region is especially vulnerable because we’re some of the last Americans who actually make things.
Pew reported that the Elkhart-Goshen metropolitan area derived 56 percent of its gross domestic product in 2014 from the manufacturing sector. That compares to the national average of only 12 percent of GDP from manufacturing.
In part because of manufacturing, the Elkhart-Goshen ranks 9th in the nation for its share of middle-income families at 61 percent.
The Fort Wayne area also depends heavily on manufacturing, but since the turn of the century, it has seen a 23 percent drop in manufacturing employment, Pew reported.
As a result, Pew said, the Fort Wayne area ranked sixth-worst in loss of economic status from 2000-2014.
These trends gained extra attention in February when United Technologies Corp. said it would move 2,100 jobs from Carrier and UTEC in Indiana to Monterrey, Mexico, to save on labor costs.
Indiana’s Democratic U.S. Sen. Joe Donnelly reacted to all of this with a set of recommendations last week. Donnelly wants to reward companies that invest in the United States and discourage corporations from shipping jobs to foreign countries.
“We have an obligation to try to prevent the next Carrier and ensure that federal policies are designed to benefit the U.S. economy and that we encourage investment in the foundation of our economy — American workers, their families, and communities,” Donnelly said.
In brief, his plan features four points:
• When corporations abandon American workers and send jobs abroad, those corporations should not be permitted to write off moving costs.
• When corporations send jobs outside or borders, taxpayers should be reimbursed for recent grants and tax breaks. Going forward, tax breaks should go to companies that invest in America.
• When awarding federal contracts, the selection process should consider “whether the bidding corporation has pursued cheaper foreign labor at the expense of American workers in the past.”
• Tax breaks should be awarded to companies that “re-shore” jobs by returning them from foreign countries to low-income and rural communities in the United States.
“Congress can help retain and create good-paying jobs by investing in infrastructure, education and workforce development; by developing tax policies that encourage long- term performance; and through the careful creation of smart regulatory policies that protect consumers while allowing business growth,” Donnelly said.
Indiana’s Republican U.S. Sen. Dan Coats also has his eye on the state and national challenges.
“The government must take steps today to help strengthen the economy and incentivize job creation,” Coats said recently. I am committed to promoting a pro-growth agenda that includes simplifying the tax code, reducing taxes, approving pending trade agreements, expanding domestic energy resources and eliminating harmful regulations. These are some of the many steps Congress can take to provide the certainty job creators need to plan, invest and hire.”
American voters in 2016 are demonstrating their concerns that middle-class Americans are losing ground as traditional jobs disappear.
Not everyone may agree on the solutions. All of our economic problems can’t be traced to corporate greed. Free trade policies that take the blame for job losses can bring benefits — such as low-cost consumer goods — as a trade-off, but in northern Indiana, it’s often our jobs that are being traded.
We applaud our Senators for offering constructive suggestions and paying attention to a fundamental topic, at a time when so many leaders are distracting us with trivial issues. If Americans were keeping pace economically, our political attitudes might be a lot less divisive.