PROBLEM STATEMENTS:

As the next potential Governor of the State of Tennessee, I will be intentional in stopping the economic hemorrhage regarding middle-class families.

(a) Tennessee needs a Governor who is focused on families and businesses that are not billionaires. Tennessee belongs to all of us. Our state must be made whole again!

(b) Middle-class families are deteriorating in the State of Tennessee due to inflation and the high cost of living.

(c) Unions are being attacked, which was the foundation for building Middle-Class families.

(d) Financial distress is causing long-term harm through, for example, negative impacts on health.

(e) Rural Tennesseans must be allowed to thrive and reap the benefits of the Tennessee budget to ascertain wealth and become middle-class families. Rural Tennesseans should not be left out of the prosperity loop in Tennessee.

MIDDLE CLASS STABILIZATION INITIATIVE - Increase Access to Opportunities that grow Middle-Class Families. Housing and Economic Development Stabilization & Sustainability Plan must take place in Tennessee.

The United States is home to some of the most expensive cities in the world, and middle-class residents are struggling to afford a decent life for themselves and their families. According to our latest analysis, one-third of the American middle class cannot afford the cost of necessities as of 2023.

The American middle class is facing a significant financial squeeze, with roughly one-third struggling to afford basics like housing, food, and childcare due to persistent inflation, which has left costs (25%) higher than in 2020. Rising expenses for essentials and stagnant wage growth have eroded purchasing power, with many households living paycheck-to-paycheck.

The nation’s affordability crisis has not spared middle-class families, one-third of which struggle to afford basic necessities such as food, housing, and childcare.

Across the 160 U.S. metro areas studied, at least 20% of middle-class earners cannot afford to live in that place, after adjusting for local income ranges and price variations.

The share of struggling middle-class families varies by race: 27% of white families, 39% of Black families, 41% of Asian American families, 46% of Native American families, and 50% of Latino or Hispanic families are unable to afford basic necessities.

Policy interventions to support affordability and address racial disparities can be found at both the national and local level.

The United States is home to some of the most expensive cities in the world, and middle-class residents are struggling to afford a decent life for themselves and their families. According to our latest analysis, one-third of the American middle class cannot afford the cost of necessities as of 2023.

Approximately 39% to 44% of Tennessee households, including many in the middle class, are experiencing significant financial hardship, often termed "ALICE" (Asset Limited, Income Constrained, Employed), as they struggle to afford necessities like housing and childcare despite being employed. Rising costs for housing and transportation often exceed 50% of income for moderate-income families, forcing a reliance on debt and causing Tennessee to rank 4th in the nation for financial distress.

Key Factors Contributing to Financial Strain

• Cost of Living vs. Wages: While the state has experienced economic growth, wages for many, particularly in the 20 most common occupations, have not kept pace with rising living expenses.

• High Debt Levels: Tennessee households have seen a 44% increase in debt since 2010, averaging over $50,000 per household, with 34% struggling to pay regular bills and many turning to credit cards to meet basic needs.

• Housing and Transportation Costs: A significant number of Tennesseans are cost-burdened, spending over half their income on these two necessities.

• Inflation and Emergency Savings: A majority of residents (67%) are worried about having enough money for emergencies, with inflation significantly impacting daily expenses.

• Insurance Costs: Changes to federal subsidies could significantly increase healthcare costs, placing additional pressure on middle-class budgets.

Geographic and Demographic Impact

• In 33 Tennessee counties, over half of all households fail to meet basic survival budgets.

• The middle-class income range varies by area, with, for example, Memphis seeing a slight decrease in the range compared to 2019, while Nashville's required income has grown.

Consequences for Tennessee Families

• Increased Delinquency: High levels of debt have led to increased delinquency rates, with many families struggling with both secured (housing/auto) and unsecured debt.

• Lack of Savings: A large portion of the population is unable to save for retirement or emergencies.

• Long-term Effects: Financial distress is causing long-term harm through, for example, negative impacts on health, according to Think Tennessee's 2024 debt policy brief. 

Using cost-of-living estimates from the Economic Policy Institute and demographic data from the U.S. Census Bureau, this report examines the affordability of 160 U.S. metro areas for middle-class households. Middle-class households are those with incomes within the middle 60% of income earners. Our analysis finds that in each metro area, at least 20% of the middle class cannot afford to live in that place, even after adjusting income ranges to account for local price variations.

This report also examines the state of affordability for middle-class families across racial groups, finding that affordability across the country is often further out of reach for families of color.

Key factors contributing to this, as highlighted in studies from organizations like the Brookings Institution and the Wall Street Journal, include: 

Shrinking Class Size: The share of adults in middle-income households fell from 61% in 1971 to 50% in 2021. While some of this decline represents a shift to the upper class, many are struggling to maintain their standard of living.

Persistent Inflation: Costs for essentials such as housing, car repairs, and groceries have significantly outpaced income growth, notes The Wall Street Journal.

Debt Dependency: Over (56%) of middle-class households in certain income brackets carry credit card debt, often using it to cover daily expenses, according to data cited by Nasdaq.

Affordability Crisis: In many US metro areas, over (20%) of middle-class earners cannot afford to live in their area, as reported by Brookings.

Long-Term Impact

The traditional middle-class lifestyle—owning a home, saving for retirement, and providing for children—is becoming increasingly unattainable, leading to a loss of financial security and increased anxiety among families.

Almost all Americans take on debt during their lifetime, but not all forms of debt are harmful to their financial health. Debt can help people to become homeowners, attend college, purchase vehicles, and start new businesses. When debt payments are high compared to one's earnings, however, it can lead to delinquencies, collections, and bankruptcy. This can damage a person’s credit score, push them towards predatory loans, and lead them to put off life milestones like buying homes and having children; all of these outcomes can harm both people’s lives and the economy’s long-term health.

Tennesseans hold too much distressed debt. The state's residents now hold over $51,000 in debt per capita; increasing debt levels are harming families.

1. Per capita debt in Tennessee has increased 44% since 2010; Tennesseans are over $50,000 in debt.

2. Tennessee’s average household debt ($51,160) is lower than the national average ($59,580); however, Tennessee has more debt that is in collections (32%) than the nation as a whole (26%), and debt in collections is even higher for Tennessee communities of color (47%).

3. Debt in Tennessee is not distributed equally; the average debt-to-income ratio of Tennessee metro counties is 1.8, lower than rural counties at 2.0.

4. Tennessee has many characteristics that increase the likelihood of high levels of debt and delinquencies, including low-income, high rates of unbanked households, high rates of cost-burdened households, and high rates of uninsured people.

5. High rates of debt and delinquencies are harming Tennessee families through long-term detrimental financial consequences, negative health impacts, and may result in reduced economic growth. Tennessee ranks 49th in non-business bankruptcies.

Atwater's Goal and Strategies:

(a) As the next potential Governor of the State of Tennessee, I will build stronger relationships with Unions across the State of Tennessee. Unions are the historical vehicle that built middle-class families.

(b) MIDDLE CLASS STABILIZATION INITIATIVE: I will stop the deterioration of financial and housing loss in the middle-class arena by placing metrics and stop-gaps to prevent further damage.

(c) Set up community committees in the State of Tennessee to assess the hardship tunnel of the affordability crisis.

Stopping the deterioration of the middle class requires a multi-pronged approach focused on raising real wages, reducing the high cost of living, and protecting workers from rapid economic shifts.

Atwater's strategies to reverse this trend include:

1. Boosting Wages & Job Security

• Strengthening Worker Bargaining Power: Protecting and expanding the ability of workers to organize and collectively bargain.

• Updating Wage Standards: Indexing the minimum wage to inflation so purchasing power does not erode over time.

• Combating Wage Theft: Enforcing stricter penalties on employers who withhold overtime pay or pay workers less than the legal minimum.

2. Lowering the Cost of Living

• Affordable Housing Initiatives: Expanding housing supply through zoning reform, incentivizing new construction, and offering programs to lower mortgage payments.

• Subsidizing Childcare & Education: Capping the percentage of household income families pay for quality childcare and higher education.

• Healthcare Access: Expanding access to universal or government-backed health coverage to limit the risk of devastating medical bills.

3. Adapting to Technological Disruption

• AI & Automation Guardrails: Implementing government policies and incentives to ensure AI and automation are human-centric, augmenting human labor rather than merely replacing it.

• Upskilling and Retraining: Investing in large-scale technical and vocational education to help displaced workers transition into high-growth, technology-resistant fields.

(d) A tax credit for first-time home buyers: Creating a fairer and more efficient framework for housing policy will mean considerable changes to zoning restrictions and a greater supply of affordable housing, as well as a rebalancing of support between mortgage holders and renters.

(e) Work diligently to reform the current system of federal homeownership subsidies to make these tax expenditures more equitable and effective.

(f) As the next Governor of the State of Tennessee, I will be the forerunner of bringing Tennessee into compliance with the needs of Tennesseans by providing paid family leave: Despite widespread support for paid family leave, the U.S. remains the only advanced economy without a paid leave policy at the national level. Several states and private employers have implemented or plan to implement their own paid leave policies. But only about 16 percent of workers receive a defined paid family leave benefit from their employers, and access to leave is uneven across the wage distribution.

(g) I will be an innovative Governor, working with the legislative body to build on existing paid leave policies that tend to package them as social insurance programs, with universal benefits funded through employee payroll taxes. This reduces the burden on employers and thus avoids incentivizing firms to discriminate against women, who are more likely to take leave.

(h) Be a Governor that truly places family first. Tennessee does not have a comprehensive, mandatory state-level paid family and medical leave (PFML) program for all workers. Instead, private-sector employees typically rely on unpaid, job-protected leave through the federal Family and Medical Leave Act (FMLA) or Tennessee's Parental Leave Act.

(i) As the next Governor of the State of Tennessee, this loophole must be addressed. State Parental Leave Act: Employers with 100 or more full-time workers must provide up to 4 months of unpaid leave for pregnancy, childbirth, nursing, and adoption. This leave can be either paid or unpaid, depending on the employer's policy.

The lack of Inclusivity:

Many types of family structures exist in the State of Tennessee that are being left out of this traditional mindset of family and small business.

Tennessee’s Parental Leave Act (T.C.A. § 4-21-408) guarantees eligible employees up to 4 months of unpaid, job-protected leave for pregnancy, childbirth, adoption, and nursing an infant. This leave runs concurrently with the federal Family and Medical Leave Act (FMLA).

Eligibility

To qualify for Tennessee's state parental leave, you must meet the following criteria:

• Company Size: Your employer must have (100) or more full-time employees at your specific job site or location.

• Tenure: You must have been employed full-time by the same company for at least (12) consecutive months.

• Gender: The law applies equally to both male and female employees.