Working Class Americans Need a Hand Up, Not a Handout | Opinion

If the midterms taught us anything, it's how much angst people have about the economy. We've seen this firsthand. When traveling the country, we often talk to people in rustbelt cities and declining rural, once-industrial communities. They are being impacted by rising interest rates, rates that have risen faster than we've seen in decades.

Take Frank and Mike, two mid-fifties white men we met who drive part-time to make a few extra bucks. Both once had steady jobs, but their factories shut down, and thanks to some combination of technological change, globalization, and financial engineering, Frank and Mike haven't been able to find equivalent full-time jobs—in decades.

In a time of supposedly historic low unemployment rates and rising wages, they and their families have been hanging on by their fingernails.

Frank and Mike are emblematic of what's been falling below the radar of policymakers for some time: Middle- and low-income Americans are materially worse off over at least the last two decades than government headline statistics would have us believe. And that includes, of course, blue-collar workers.

To assess how this group is faring, the Ludwig Institute for Shared Economic Prosperity (LISEP) created the True Living Cost (TLC) index that includes only the key items a family must have to subsist, such as food and fuel, housing, and healthcare. The findings are astonishing: Over the last 20-plus years, inflation has punished this group by 50 percent more than the Consumer Price Index (CPI) indicates over the same period.

The same is true with earnings. In fact, since 2001, the buying power of the median earner has decreased by 6.4 percent, while the CPI says it has increased by 9.4 percent.

Looking at unemployment, it was 3.7 percent in October 2022, according to the Bureau of Labor Statistics. But many people make less than a poverty wage and can't find full-time work, though they want it. And if you include them, true unemployment rises to 23.6 percent.

SAN PEDRO, CALIFORNIA - APRIL 22: The Teamsters Port Division, in collaboration with Labor Community Services and the Los Angeles Regional Food Bank hosts a food distribution for port truck drivers impacted by the coronavirus shutdown measures. Kevin Winter/Getty Images

Moreover, often good-hearted attempts to assist lower-income Americans are very narrow in scope, focused on the elderly, the poorest, and those who have historically been the targets of discrimination. These Americans certainly deserve government help. But despite the bleak situation for so many blue-collar families, they are typically left out of these programs.

For example, the recent Biden administration higher education debt forgiveness effort is for people who went to college and who make less than $125,000 a year. Frank and Mike and lots of folks like them either already paid off their debt or could never afford college in the first place. It would be of no benefit for them and their families.

Such targeted responses often leave out large swaths of the population who want a hand up, not a handout. Frank and Mike don't really want government assistance. What they want is a steady, living-wage job and the dignity that comes with it.

Policymakers in Washington have failed them. We believe this is the case, at least in part, because headline statistics paint a rosier picture about their situation than is reality.

We represent both political parties. We believe Democrats and Republicans must carefully consider all geographic, ethnic, and racial groups that make up middle- and low-income America if we are to ensure that nobody is left behind and if we are to succeed in creating a fairer and more just country.

As we look to a new Congress in 2023, we will see divided government. Voters made this choice for a reason. If we are to respect the wishes of the electorate, every reasonable policy step should be taken to encourage the kinds of living-wage jobs that Frank and Mike enjoyed once upon a time.

Gene Ludwig is the founder and Chairman of the Ludwig Institute for Shared Economic Prosperity. He was Comptroller of the Currency during the Clinton administration.

Frank Zarb is the former Chairman and CEO of the NASDAQ stock exchange and was energy czar during the Ford administration.

The views expressed in this article are the writers' own.