Washington, D.C. – Today, Michael Bennet, U.S. Senator for Colorado talked about a troubling trend over the last decade when the economy grew while working family incomes went down, resulting in a one-two-punch to family budgets in the midst of the current recession. Bennet asked Federal Reserve Chairman Ben Bernanke what the Fed is doing to reverse this unacceptable trajectory.
“In Colorado, if you look at the last period of economic growth in this country before we entered this terrible recession, that period of economic growth resulted in an $800 decrease in median family income in our state. So the economy grew, but middle class family income fell as it did across the country,” Bennet said. “We’ve got two recessions we’re trying to recover from – this one, and the last period of economic growth that didn’t drive their income.
Bennet also argued that as the economy grew, the costs of essential items like health insurance, higher education, housing prices and utility bills actually went up, in some cases by as much as 97 percent.
“At the same time in our state the cost of health insurance over that period went up by 97 percent, the cost of higher education went up by 50 percent,” continued Bennet. “So you’ve got an economy that’s driving costs of things that are important to move families ahead, but income is going down and my understanding is that’s the first time our economy has grown in our history and median family income went down.”
Bernanke agreed with Bennet’s assessment of recent economic trends, and suggested that the larger problem is a widening income gap, particularly between those at the top of the spectrum, whose incomes grew, and those in the middle who actually saw a decline. Bernanke also highlighted the important role education can play in reducing income inequality.
“The one thing I think that everyone agrees about is income inequality is to some extent tied to educational skill inequality,” Bernanke said. “We live in a society where technology is advancing, where we’re competing with other countries that have very large pools of unskilled labor and…jobs in manufacturing are no longer a predominant form of employment, so for all those reasons, in order to enjoy the benefits of productivity and higher economic growth, the training skills and education is a critical part of that.”
Highlighting elementary and secondary education, community college, on the job training and other opportunities, Bernanke singled out Bennet as someone uniquely qualified to lead the Senate’s efforts on education reform.
“I agree on the importance of education. It’s one of the sad facts that the legacy of the last decade, in addition to the economic issues we were just talking about. We started the decade… roughly first in college degrees; and ten years later we’re roughly 15th in the world,” Bennet said. “It’s just a reminder of the urgency that we face as this is working itself out in the daily lives of Americans. I think there is enormous anxiety that we’re at risk of being the first generation of Americans to leave less opportunity to our kids and our grandkids.”
Earlier in his line of questioning, Bennet applauded members from both parties, namely Senate Budget Chairman Kent Conrad and Ranking Member Judd Gregg, for their leadership in supporting an independent debt commission. He went on to lament the fact that a bill to create such a commission ultimately failed to receive the votes necessary for passage.
Bennet said, “We just heard the fed chairman talk about the political will in Congress to be able to address this issue. Breathtaking to me as someone new here that two weeks ago we had the chance because of Senator Gregg’s leadership and because of Senator Conrad’s leadership to vote for a bipartisan commission, which is all it was, to look over a period of time and give us recommendations for an up or down vote and we didn’t have the political will as an institution even to support that. I want to thank Senator Gregg for his leadership and I hope we’ll try again because we need to demonstrate the political will you’re talking about, if we’re not going to leave our kids completely diminished set of opportunities.”