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Listen to a different view on Bushs' economy! MIDDLE-CLASS BLUES
Maxed-Out Families and the Fading American Dream
By Perry L. Weed | November 1, 2006 (page 1/3)
Editor's note: President Bush never misses an opportunity to tout the economic growth and job gains of the last few years. The Dow may be at record highs, but there's an ugly truth behind the myth of today's economic "good times." We asked occasional contributor Perry L. Weed to tease out the real story from the current economic data. Weed is a retired Washington economist and lawyer whose thirty years in the nation's capital included Senate and House staff assignments and a position at the U.S. Department of Commerce.
The familiar rhetoric of "two Americas" is all too real if you examine changes in the U.S. economy over the past thirty years. Although the economy is 150 percent larger than it was three decades ago, an overwhelming share of increases in income and wealth has flowed to a relatively small fraction of Americans. The U.S. has become the most unequal of rich nations. The high tide of prosperity for the middle class began receding in the mid-1970s, and their economic security is now in full retreat.
Being middle class once meant working hard, getting ahead, achieving financial and retirement security and expecting one's children to do as well or even better. Now, after three decades of flat or falling real wages for most Americans, more than half of middle-income Americans think things will be worse for their children and future generations.
Average hourly wages and salaries of production and non-supervisory workers have fallen 5 percent since 1973. The Census Bureau's recent annual report showed that, adjusted for inflation, the earnings of U.S. men were lower in 2005 than in 1973. The same report, however, had very good news for the top one-fifth of American households. They received more than half the nation's income last year, with most of that concentrated in the top 5 percent.
GOOD JOBS GONE—The new "service sector" jobs, which for years have been replacing manufacturing jobs, pay less and offer fewer benefits. Already almost two-thirds of Americans report that they live from paycheck to paycheck. One-half say that no matter how hard they work, they cannot get ahead. Pension protection, employee health insurance and job security are eroding.
This shift toward service jobs has doubled in the last twenty-five years. Of the thirty occupations projected by the U.S. Department of Labor to see the greatest growth between now and 2014, most are in the service sector requiring only short-term on-the-job training and are categorized as either low or very low paying. Only a few are in high-tech areas and only six require as much as a bachelor's degree. These new service jobs are mostly in retail sales and customer service, and include janitors and cleaners, waiters, restaurant workers, home health aides and nursing assistants.
On the other end of the spectrum, CEOs saw a pay increase of almost 300 percent between 1990 and 2005. American executives now skim off over 10 percent of corporate gains for themselves. Recently the ratio of the pay of the chief executive of America's top corporations to that of a production worker reached an unprecedented 431 to 1, on average, an annual rate of $11.8 million to $27,460.
THE END OF INCOME PARITY—After World War II, Americans produced the world's first truly middle-class nation. In the thirty years following the war, the real income of all American families, including the poor and almost poor, doubled. The nation, by every economic measure, was becoming more equal. That has all changed. For the past thirty years, the trend toward economic inequality has rolled back the post-war progress that had moved the nation toward a more equitable distribution of income and wealth. For the least wealthy 50 percent of families, according to a 2006 Federal Reserve report, the share of total U.S. family wealth has fallen to a meager 2.5 percent. The wealthiest 10 percent hold 63 percent of family assets. This income and wealth gap is growing with an unrestrained force—and is wider than in any other advanced country. America has regressed in spirit to the Gilded Age, at the end of the nineteenth century, with its flagrant excesses. The last fifteen years alone have witnessed the most colossal amassing of huge fortunes in U.S. history. The nation now boasts more than 400 billionaires.
WAR ON THE MIDDLE CLASS—Why are we sinking into greater inequality? The interests of business, finance and the wealthy predominate and have nearly eliminated such mediating and countervailing forces as organized labor and a responsive government, forces that have historically provided balance and social support. The bargaining power of workers has shriveled. Elected officials have been captured by moneyed interests. The rewards of globalization have mostly flowed to shareholders and their enablers. Bankruptcy laws, as they are now used by the airlines and auto-parts industries in particular, hasten worker losses and weaken unions. The social beliefs that favored equality and progressive taxation have broken down. For the past twenty-five years, U.S. government policies have consistently favored the wealthy at the expense of working families, notably in tax, healthcare and retirement policies. And yet, in our national dialogue, public discourse about inequality is abruptly shut down, whenever it arises, as un-American class warfare.
The Bush administration has pushed regulations that strip millions of workers of overtime pay, has encouraged union-busting, has advanced tort reform favoring corporations and has done the bidding of credit card companies in passing revisions to bankruptcy laws that further incapacitate distressed debtors. And, of course, there is the failure to raise the minimum wage, stuck at $5.15 per hour since 1997, with its purchasing power severely reduced by inflation since then. Since 1973, the real minimum wage has decreased by nearly one-fifth. At the current minimum wage, a wage earner with two children would have to work 150 hours a week to raise the household income above the poverty line.
Taken together, the rewards of our recent economic recovery, the productivity gains, advances in technology and recent business-friendly federal domestic policies have merged to widen the divide between the prosperous—the top 20 percent of households—and the struggling majority of American families. The economic good times touted by the Bush administration do not reflect what these families experience in their daily lives: that is, flat real wages, greatly increased costs for basic necessities, lower-paying jobs, and diminishing savings and wealth accumulation.
Meanwhile, corporations—and their highest-echelon personnel—are grabbing an increasing share of the economic pie. The top 5 percent of the wealthiest American families now receive 20 percent of total U.S. income, up from 15 percent in 1974. In 2001, 7 percent of national income went to corporate profits; in 2006, 13 percent. In the past five years, domestic corporate profits have soared by an extraordinary 72 percent.
The evidence mounts that the benefits of the U.S. economy and its global agenda are flowing inordinately to corporate investors, top managers, and their professional enablers at a cost to ordinary Americans in low wages, outsourced jobs, broken promises, lower living standards, deteriorating towns and cities, and unsustainable levels of foreign debt. Even though business productivity has risen 16.6 percent, earnings for 80 percent of working American families are nevertheless actually lower than they were five years ago. The household-income gains over the past thirty years can mostly be traced to employees' longer work hours and the money from married women entering the paid workforce. In 1970, 41 percent of wives participated in the labor force; now, in order to make ends meet, over 60 percent work. And all this is happening as the business cycle peaks and "times are good."
Most Americans daily experience a financial squeeze and the frenzied demands of their jobs and private lives. They see globalization fracturing the traditional linkages of skills, education and wages. They see the longstanding social contract with business and government unraveling in the form of stagnant wages, unaffordable health care, soaring energy costs, the cost of education spiraling out of reach and with it the promise of upward mobility, and the gradual demise of pension, retirement and health plans—the mainstays for aging Americans. In short, their standard of living is declining or threatened. Yet political and media elites wonder aloud in bewilderment why Americans are wrestling with economic insecurity. Most Americans get it, however. They realize their country is on the wrong track and that its government institutions and elected leaders are failing them!
For all the big talk by the leaders of the Christian right, Bush was not re-elected by the faithful, as there were nowhere near enough of them to pull it off. Nationwide, there were 4 million evangelicals who hadn't voted for Bush/Cheney in 2000, and Karl Rove wooed them. Even if he got them all, however, that triumph would not explain the miracle of Bush's picking up 11 million more votes than he'd allegedly won against Al Gore. This insufficiency is clearer still when we recall the incumbent's record disapproval ratings. Hovering in the high mid-40s, Bush's negatives were worse than Lyndon Johnson's in 1968 and Jimmy Carter's in 1980. On the other hand, Democrats were extraordinarily united. At registering new voters, they trounced the GOP by as much as 5 to 1 in big swing states. By contrast, Bush's party was divided, with many eminent Republicans, both moderates and hardcore conservatives, either coming out for Kerry or for neither of them!
Maxed-Out Families and the Fading American Dream
By Perry L. Weed | November 1, 2006 (page 1/3)
Editor's note: President Bush never misses an opportunity to tout the economic growth and job gains of the last few years. The Dow may be at record highs, but there's an ugly truth behind the myth of today's economic "good times." We asked occasional contributor Perry L. Weed to tease out the real story from the current economic data. Weed is a retired Washington economist and lawyer whose thirty years in the nation's capital included Senate and House staff assignments and a position at the U.S. Department of Commerce.
The familiar rhetoric of "two Americas" is all too real if you examine changes in the U.S. economy over the past thirty years. Although the economy is 150 percent larger than it was three decades ago, an overwhelming share of increases in income and wealth has flowed to a relatively small fraction of Americans. The U.S. has become the most unequal of rich nations. The high tide of prosperity for the middle class began receding in the mid-1970s, and their economic security is now in full retreat.
Being middle class once meant working hard, getting ahead, achieving financial and retirement security and expecting one's children to do as well or even better. Now, after three decades of flat or falling real wages for most Americans, more than half of middle-income Americans think things will be worse for their children and future generations.
Average hourly wages and salaries of production and non-supervisory workers have fallen 5 percent since 1973. The Census Bureau's recent annual report showed that, adjusted for inflation, the earnings of U.S. men were lower in 2005 than in 1973. The same report, however, had very good news for the top one-fifth of American households. They received more than half the nation's income last year, with most of that concentrated in the top 5 percent.
GOOD JOBS GONE—The new "service sector" jobs, which for years have been replacing manufacturing jobs, pay less and offer fewer benefits. Already almost two-thirds of Americans report that they live from paycheck to paycheck. One-half say that no matter how hard they work, they cannot get ahead. Pension protection, employee health insurance and job security are eroding.
This shift toward service jobs has doubled in the last twenty-five years. Of the thirty occupations projected by the U.S. Department of Labor to see the greatest growth between now and 2014, most are in the service sector requiring only short-term on-the-job training and are categorized as either low or very low paying. Only a few are in high-tech areas and only six require as much as a bachelor's degree. These new service jobs are mostly in retail sales and customer service, and include janitors and cleaners, waiters, restaurant workers, home health aides and nursing assistants.
On the other end of the spectrum, CEOs saw a pay increase of almost 300 percent between 1990 and 2005. American executives now skim off over 10 percent of corporate gains for themselves. Recently the ratio of the pay of the chief executive of America's top corporations to that of a production worker reached an unprecedented 431 to 1, on average, an annual rate of $11.8 million to $27,460.
THE END OF INCOME PARITY—After World War II, Americans produced the world's first truly middle-class nation. In the thirty years following the war, the real income of all American families, including the poor and almost poor, doubled. The nation, by every economic measure, was becoming more equal. That has all changed. For the past thirty years, the trend toward economic inequality has rolled back the post-war progress that had moved the nation toward a more equitable distribution of income and wealth. For the least wealthy 50 percent of families, according to a 2006 Federal Reserve report, the share of total U.S. family wealth has fallen to a meager 2.5 percent. The wealthiest 10 percent hold 63 percent of family assets. This income and wealth gap is growing with an unrestrained force—and is wider than in any other advanced country. America has regressed in spirit to the Gilded Age, at the end of the nineteenth century, with its flagrant excesses. The last fifteen years alone have witnessed the most colossal amassing of huge fortunes in U.S. history. The nation now boasts more than 400 billionaires.
WAR ON THE MIDDLE CLASS—Why are we sinking into greater inequality? The interests of business, finance and the wealthy predominate and have nearly eliminated such mediating and countervailing forces as organized labor and a responsive government, forces that have historically provided balance and social support. The bargaining power of workers has shriveled. Elected officials have been captured by moneyed interests. The rewards of globalization have mostly flowed to shareholders and their enablers. Bankruptcy laws, as they are now used by the airlines and auto-parts industries in particular, hasten worker losses and weaken unions. The social beliefs that favored equality and progressive taxation have broken down. For the past twenty-five years, U.S. government policies have consistently favored the wealthy at the expense of working families, notably in tax, healthcare and retirement policies. And yet, in our national dialogue, public discourse about inequality is abruptly shut down, whenever it arises, as un-American class warfare.
The Bush administration has pushed regulations that strip millions of workers of overtime pay, has encouraged union-busting, has advanced tort reform favoring corporations and has done the bidding of credit card companies in passing revisions to bankruptcy laws that further incapacitate distressed debtors. And, of course, there is the failure to raise the minimum wage, stuck at $5.15 per hour since 1997, with its purchasing power severely reduced by inflation since then. Since 1973, the real minimum wage has decreased by nearly one-fifth. At the current minimum wage, a wage earner with two children would have to work 150 hours a week to raise the household income above the poverty line.
Taken together, the rewards of our recent economic recovery, the productivity gains, advances in technology and recent business-friendly federal domestic policies have merged to widen the divide between the prosperous—the top 20 percent of households—and the struggling majority of American families. The economic good times touted by the Bush administration do not reflect what these families experience in their daily lives: that is, flat real wages, greatly increased costs for basic necessities, lower-paying jobs, and diminishing savings and wealth accumulation.
Meanwhile, corporations—and their highest-echelon personnel—are grabbing an increasing share of the economic pie. The top 5 percent of the wealthiest American families now receive 20 percent of total U.S. income, up from 15 percent in 1974. In 2001, 7 percent of national income went to corporate profits; in 2006, 13 percent. In the past five years, domestic corporate profits have soared by an extraordinary 72 percent.
The evidence mounts that the benefits of the U.S. economy and its global agenda are flowing inordinately to corporate investors, top managers, and their professional enablers at a cost to ordinary Americans in low wages, outsourced jobs, broken promises, lower living standards, deteriorating towns and cities, and unsustainable levels of foreign debt. Even though business productivity has risen 16.6 percent, earnings for 80 percent of working American families are nevertheless actually lower than they were five years ago. The household-income gains over the past thirty years can mostly be traced to employees' longer work hours and the money from married women entering the paid workforce. In 1970, 41 percent of wives participated in the labor force; now, in order to make ends meet, over 60 percent work. And all this is happening as the business cycle peaks and "times are good."
Most Americans daily experience a financial squeeze and the frenzied demands of their jobs and private lives. They see globalization fracturing the traditional linkages of skills, education and wages. They see the longstanding social contract with business and government unraveling in the form of stagnant wages, unaffordable health care, soaring energy costs, the cost of education spiraling out of reach and with it the promise of upward mobility, and the gradual demise of pension, retirement and health plans—the mainstays for aging Americans. In short, their standard of living is declining or threatened. Yet political and media elites wonder aloud in bewilderment why Americans are wrestling with economic insecurity. Most Americans get it, however. They realize their country is on the wrong track and that its government institutions and elected leaders are failing them!
For all the big talk by the leaders of the Christian right, Bush was not re-elected by the faithful, as there were nowhere near enough of them to pull it off. Nationwide, there were 4 million evangelicals who hadn't voted for Bush/Cheney in 2000, and Karl Rove wooed them. Even if he got them all, however, that triumph would not explain the miracle of Bush's picking up 11 million more votes than he'd allegedly won against Al Gore. This insufficiency is clearer still when we recall the incumbent's record disapproval ratings. Hovering in the high mid-40s, Bush's negatives were worse than Lyndon Johnson's in 1968 and Jimmy Carter's in 1980. On the other hand, Democrats were extraordinarily united. At registering new voters, they trounced the GOP by as much as 5 to 1 in big swing states. By contrast, Bush's party was divided, with many eminent Republicans, both moderates and hardcore conservatives, either coming out for Kerry or for neither of them!
You seem to sneak your plagiarism into responses in the middle of threads... If you cannot see the difference, it doesn't surprise me...