Chairman Miller, Ranking Member McKeon, I thank you for the opportunity to testify, and I commend the committee for targeting the critical challenge of economic inequality and the American middle class. In doing so, you are targeting what many economists and policy makers consider the most important economic challenge we face. Of course, in the current American economy, challenges abound. We are faced with the aftermath of the bursting of a massive housing bubble, and the spillovers from that event are significantly constraining financial markets. The economy, while not officially in recession, is clearly weak in key sectors, most notably in the job market, where employment is down by about 440,000 jobs on net, and unemployment up about a point compared to one year ago to 5.5%. The underemployment rate, a more comprehensive measure of diminished job opportunities was 9.9 % in June. These job market declines, in tandem with spiking prices driven by higher food and energy costs, are leading to real declines in compensation. Simply put, the paychecks of middle-income are falling behind these families ’ economic needs, and their living standards are sliding. Though these problems are of recent vintage, and can to some extent be closely tied t
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