Senate Hearing Discusses the State of the American Dream

Poverty & Family Economics

By Brianna Gross First Focus Intern Associate

The most basic need of the typical American family is to be able to support and provide for one’s children. John Cox, Pamela Thatcher, and Diedre Melson always believed in the idea of the American Dream: hard work was the key to success and the means to providing for one’s family. However, after the recession of 2008, they quickly learned that hard work no longer necessarily translates to food for their children.

“Take care of your job and your job will take care of you,” was what Cox’s father had taught him, and the motto that Cox had lived by for most of his life. A college educated accountant who earned $60,000 a year, Cox was living the American Dream. As a single father, he owned a home and supported his son Geral. But in 2008 he, along with millions of other Americans, lost his job in the recession. Cox, Thatcher, and Melson all are part of a large middle class who are still struggling to get back on their feet, and who are worried about their children’s future.

Last Thursday, June 6th, Senator Jeff Merkley of Oregon called a hearing of the United States Senate Committee on Banking, Housing, and Urban Affairs to discuss the problems that the middle class are facing. He chose Cox, Thatcher, and Melson to give personal testimony because of their role in the documentary American Winter in which they discussed their families’ struggles since the recession. Senior Policy Analyst of Demos, Amy Traub, Professor of Economics and Public Policy at Princeton University, Dr. Atif Mian, Second Avenue Partner Nick Hanauer, and Executive Director of Nevada Governor’s Office of Economic Development Steve Hill were also called to analyze and provide possible solutions to the economic crisis.

Senator Merkley was joined by the Ranking Member, Senator Dean Heller from Nevada, as well as Senator Elizabeth Warren from Massachusetts. Senator Merkley opened the hearing by introducing the witnesses from American Winter. They were chosen, he said, not because they were the exception, but because they were typical. They represented the millions of others who were in the same situation.

A mother of four, Melson had worked since she was thirteen years old. She went to college straight from high school, but transferred to a career school two and a half years later because she could not afford the tuition costs. In 2008 she was laid off from her job and had to rely on SNAP benefits and housing assistance. She recently found a job answering calls at the 211 info nonprofit service earning thirteen dollars an hour, but that pay alone is still not enough to support her family.

Cox’s main concern after losing his job is keeping his house which is 70 percent underwater, and providing for his son, who has Downs syndrome. He looked for minimum wage jobs, but as a single father, he needs to find a job that works around his son’s school schedule.

“How can the government expect me to earn minimum wage, pay daycare for my Down’s syndrome boy, and put food on the table?” he asked.

Thatcher had to go on SNAP benefits as well as TANF after her husband lost his job in the recession. In her testimony, she talked about the fact that there is a stigma around people who use government assistance; people think that they “abuse the system.” But Thatcher emphasized that it is not the case. Her family cut back on every expense, and though Thatcher’s husband eventually found a job, it was half of what he was earning before.

Melson’s testimony echoed the same sentiment: “We’re the working poor. We try to pay our fairs and pay our dues. But despite our efforts, we are sinking.”

Rising college tuition costs that leave people in debt for years, minimum wage not being enough to support a family, and the lack of job offerings were all problems that were reiterated by almost everyone in the hearing. But the main worry was for the future of their children. Melson told a story about a mother she knew who discouraged her daughter from attending college. When a college degree no longer guarantees a job and comes with debilitating student debt, college no longer seems like the best option. She explained that children in high school today live with the “unnecessary fear” of the financial burden of college.

Senator Warren and Nick Hanauer both stressed how the economy can only be revitalized once the United States invests in the middle class.

“Who is at the center of the economic universe? As sure as the sun is at the center of our solar system, the middle class is at the center of our economic universe,” Hanauer insisted.

Calling it a “virtuous cycle,” Hanauer explained that the middle class are the only people who can create jobs—not the wealthy corporations. According to Hanauer, it is all about supply and demand. Right now, the economy is weak because the middle class has no money to spend. However, if the government invested in the middle class, they could purchase more products, and the demand would increase. Corporations would then be forced to hire more workers. Thus, strengthening the economy must be about “growing from the middle out” as Senator Warren described it, and investing in the middle class.

According to Hanauer, the way to do this is to increase the minimum wage to fifteen dollars an hour. Amy Traub suggested that rebuilding unions would give the middle class more power and would in turn help the economy. Dr. Atif Mian explained the need for more safety nets in the housing market to prevent foreclosures. Finally, Steve Hill suggested that a college degree should not be the only gateway to the middle class, but rather there should be other options such as certificate completions.

As a first step, this hearing put a face and a story to the statistics. Children are directly effected by the economic crisis their families face. Insufficient amounts of food, homelessness, and the stress of living in a family suffering from unemployment has a deep impact on children. It has been five years since the recession, and the middle class is demanding answers for the sake of their children’s future.

See complete testimonies here: http://www.banking.senate.gov/public/index.cfm?FuseAction=Hearings.Hearing&Hearing_id=45e4221b-56fa-4ae5-a707-8279fcadbbf9