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Despite Some Good Economic News, The Status Quo Is Not Enough

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Reprinted from Campaign For America's Future

State of the Economy
State of the Economy
(Image by free pictures of money)
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Should Democrats present themselves as fighters for a transformative economic vision, or as skilled managers whose job is to restore and maintain the status quo of the last several decades? The question came up again last week, when new economic data for 2015 was released.

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President Obama told a Philadelphia crowd:

"... last year, across every age, every race in America, incomes rose and the poverty rate fell ...the typical household income of Americans rose by $2,800, which is the single biggest one-year increase on record ... We lifted 3.5 million people out of poverty. That's the largest one-year drop in poverty since 1968. The uninsured rate is the lowest it has been since they kept record. The pay gap between men and women shrank to the lowest level ever."

It's all true, and it's a welcome burst of unexpected good news. These are major advances by any standard.

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The View From Main Street

But there are lingering problems. Median household income is still lower than it was in 2007. In fact, it's lower than it was 20 years ago. Moreover, as the Economic Policy Institute's Elise Gould points out, most of the income growth occurred at the top. Wage inequality continued to rise last year.

As The New York Times reported, "Americans in the bottom half were still well below where they stood at the turn of the century even as those at the top chalked up significant gains."

Many parts of the country are still wrestling with extreme poverty and lagging incomes. Americans pay more today for needs like health care and higher education than they did in the 1990s.

At 14.5 percent, our poverty rate is still higher than the latest reported figures for most Western European countries. (Only austerity-battered Greece and Spain fare worse.) States like Mississippi (with a 22 percent poverty rate) and Arkansas (at 19.1 percent) are much worse off than any developed nation. And, as Shawn Fremstad points out, the federal poverty measurement undercounts America's poor.

Obama's comments will probably play well in states like Connecticut, New Jersey, Maryland, Massachusetts and California -- all in the top 10 for key economic indicators. But they won't resonate in the struggling states that are more inclined to vote for Donald Trump.

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The Long Decline

The 2015 census figures suggest that, after seven years of a painfully slow recovery, we're returning to pre-2008 conditions at a faster rate than expected. But shouldn't we aspire to more than that? As this chart shows, hourly wages have been lagging behind productivity since the late 1970s:

Source: Economic Policy Institute

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Host of 'The Breakdown,' Writer, and Senior Fellow, Campaign for America's Future

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