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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Cherny: Dems Must Address the ALICE Voters

For an interesting take on an important socio-economic trend that seems to be accelerating,” read “ALICE Americans, slipping out of the middle class” by Andre Cherny, president and co-founder of Democracy: A Journal of Ideas. Writing at WaPo Opinions, Cherny observes:

Americans have traditionally divided the country into three bands of income: rich, poor and a broad middle class in which, despite the protestations of statisticians, almost all Americans felt membership. But the distinct, cohesive middle class of the past is being cleaved in two. Last month the Census Bureau released new data pegging the median U.S. household income at $51,017. That income level is the new dividing line in American life and politics. Those roughly above that line constitute what is left of the traditional American middle class. Those living below that line, but above poverty, are the ALICE class.

Cherny explains that ALICE is an acronym for “Asset Limited, Income Constrained and Employed.” He adds that “ALICE Americans live on the jagged edge of the middle class. But by virtue of their economic situation and outlook on the future, they are becoming as distinct from the relatively more comfortable parts of the middle class as they are from those living in poverty.”
Some might prefer to call this group the “lower middle class.” Whatever you prefer to call it, you cn understand why this is a potentially volatile demographic in terms of voting. Here’s where the political volatility comes in:

Americans have traditionally divided the country into three bands of income: rich, poor and a broad middle class in which, despite the protestations of statisticians, almost all Americans felt membership. But the distinct, cohesive middle class of the past is being cleaved in two. Last month the Census Bureau released new data pegging the median U.S. household income at $51,017. That income level is the new dividing line in American life and politics. Those roughly above that line constitute what is left of the traditional American middle class. Those living below that line, but above poverty, are the ALICE class.
For most of the past 50 years, the income growth lines for the middle 20 percent of Americans and the 20 percent right below them tracked one another. A unified middle class rose and fell together. But increasingly over the past decade, these lines have diverged and a new income gap has grown. While the financial situation for both the bottom 20 percent and the middle of the middle class has stabilized over the past couple of years, the income of the 20 percent in between has continued to fall at such a rate that, as of 2012, their total income growth since 1967 is roughly 60 percent of those below or above them.
Working harder and yet caught between those in poverty who receive government support and a stable, if not thriving, middle class, the ALICE class’s resentments and disappointments continue to grow. The latest survey from the Conference Board shows consumer confidence has sharply risen over the past couple of years for those making more than $50,000. It is has even ticked up for those making less than $35,000. But it has tumbled for those making $35,000 to $50,000. During past periods of recovery, the lower and upper halves of the middle class shared the same level of economic optimism. At some points this year, ALICE Americans have shown 40 percent less confidence than Americans earning more than $50,000 — a historically large gap…Today, their median net worth is only two-thirds of what it was in 1989….the floor has dropped out from under the ALICE class.

Clearly, this is not a group that will have much tolerance for obstruction of needed economic reforms by a party which appears to be driven more by tax breaks for the wealthy than anything else. Hard to see them voting Republican in 2014. However, if they get no substantial relief by 2016, all bets about their political proclivities are off.
Cherny argues that “asset-building is the ladder of opportunity” is the policy principle Dems should address to secure the votes of this demographic. Further, he suggests “An ALICE agenda — including a refundable Saver’s Credit, matching grants for 529 accounts, reduced penalties for savings among those on food stamps and universal children’s savings accounts — could reasonably fit in the platform of either Democrats or Republicans.”
Cherny concludes, “They were trampled in the Bush years; they are still waiting for an upturn during the Obama years. They are up for grabs, looking for leaders who will rebuild what once was a single, surging American middle class.” For all of the talk about the “endangered middle class,” Dems would do well to pay particular attention to advancing reforms for this subgroup of potentially volatile voters.

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