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The Real Opportunity Is With the Middle Class

12/10/2013 03:06 pm ET | Updated Feb 09, 2014

In Paul Krugman's Dec. 6th New York Times opinion piece, "Obama Gets Real" he notes that "a relentlessly growing deficit of opportunity is a bigger threat to our future than our rapidly shrinking fiscal deficit." The U.S. added 203,000 jobs in November and unemployment hovers at seven percent yet the labor force participation rate, which reflects those who have dropped-out of the workforce and are not captured in the statistics, remains at the lowest level in more than thirty years.

We can agree on Krugman's premise: erosion of opportunity is corrosive to society. But in this environment his policy prescriptions are unlikely to start a meaningful debate, let alone move the nation forward. With split control of Congress, both sides seem to focus on pleasing their base supporters and prefer to claim the issue for the next election cycle rather than seriously address solutions and meaningful action.

A fix for people at the lowest rung on the economy, while vitally important, will not provide the needed lasting solution for American economic resurgence. Rather, we should look at another glaring "inconvenient truth" - there is limited opportunity for people in the middle. Mean household income for 60 percent of households has stagnated at $50,000 and below since the 1980s, while costs have grown significantly. Addressing opportunities and solutions directed to people in the middle will, in fact, help strengthen the economy.

The last few decades have been characterized by the business model of maximized productivity and minimized labor costs. Focus needs to be paid to the source of middle income jobs-businesses-to discover those that actually offer good jobs with pathways and growth opportunities into, and within, the middle class.

We set out to find examples of businesses that buck the trend and that maximize profit and productivity by investing in labor. To date, we've highlighted close to ninety employers in manufacturing, health care and other industries that focus on investing in their people. While there are significant differences between the sectors, we found some common themes.

First, they develop products and services that are customized to better meet market demand at competitive prices. Second, they design core systems that enable them to succeed. Finally - and here's the key - they view their employees, many with little more than a high-school diploma, as valued assets in meeting their goals. They invest in training, they provide decent compensation well above minimum wage and offer pathways of advancement. They recognize that it's the people that make it possible to be better, faster and competitively priced.

These companies may be the exception in a universe of six million U.S. businesses, but I wonder what would it take for the balance to tip and this became the norm in American business? It just may be easier than getting a divided Congress to act.

Blog posts are authored by Hitachi Foundation staff and do not necessarily reflect the views or opinions of the Foundation Board, Hitachi, Ltd., Hitachi America, Ltd., or any Hitachi company affiliate.

This blog post originally appeared in The Hitachi Foundation's Good Work Blog