It’s about time for a jump start
Friday, August 23, 2013
Our economy has been slowly but steadily recovering. However, too many people still cannot find work, and most workers are experiencing flat wages, even though corporate profits are at an all time high. They watch the stock market and corporate pay and bonuses skyrocketing, and feel left behind. They believe government and media don’t care and are not even noticing. Are they right?
They are correct that they are being left behind, but they are not the only ones noticing. A few years ago, when some economists, politicians and advocates said the economy seemed to favor only the corporations and the wealthiest, they were accused of conducting class warfare. However, now all of the mainstream newspapers and economic observers are talking about it. The American Dream is in danger.
For decades, each generation has done better than the one before. Better education and pay resulted in a higher standard of living. This spurred innovation, growth and more millionaires, as Americans reached for their piece of the dream. Work hard, dream big, succeed.
But lately, that formula is unreliable. Our economy is 70 percent consumer-driven, but with wages flat, workers have not been able to drive the economy like before. USA Today’s May 5, 2013, article, “Profits don’t flow through to wages,” quotes economist Mark Zandy as saying, “For the economy to thrive we need everyone participating.” This article reports that, “Workers who rely on paychecks for their income have been running in place, financially speaking. Adjusting for inflation, an average worker who was paid $49,650 at the end of 2009 is making about $545 less now – and that’s before taxes and deductions.”
CNN Money covered this story in 2011, titling it, “How the middle class became the under class.” They wrote, “Middle-class incomes have been stagnant for at least a generation, while the wealthiest tier has surged ahead at lightning speed.” They added, “Meanwhile, the richest 1 percent of Americans – those making $380,000 or more – have seen their incomes grow 33 percent over the last 20 years, leaving average Americans in the dust.”
CNN Money cites the reasons other articles cite as well – globalization of the economy, technology, the erosion of unions, etc. It also reports that, “Tax cuts enacted during the Bush administration and extended under Obama were also a major windfall for the nation’s richest.”
An International Business Times article, “US worker productivity is rising faster than wage growth,” says it all. They wrote, “U.S. companies have been getting more out of fewer employees, but those workers aren’t enjoying a corresponding increase in their wages.”
These are not left-wing organizations. These are middle to conservative groups who are highlighting a problem in America – the vanishing middle class. When a chief executive officer earns 380 times what the average worker earns, when a CEO earns in one hour what the employee earns in one month, something is wrong, and we need to work on this.
We need to examine trade agreements, end unfair tax breaks and fix what conservative Oklahoma Sen. Tom Coburn wrote about this in his report, “Subsidies of the Rich and Famous.” We must raise the minimum wage to provide more buying power for individuals, which will also help small businesses. We could lower the corporate tax rate, which is merely a suggestion anyway, since so few corporations actually pay at that rate, but then we need to actually collect those taxes.
CNN Money reported on Aug. 12, 2008, that 67 percent of U.S. corporations paid zero federal income taxes, and that outrage continues today. Reward corporations that create jobs here instead of parking their profits off shore. Invest in our nation’s infrastructure. We need to work together to turn this around.
I do not have all the answers. Nobody does. But I know fairness is at our core, and we need to restore this truly American value.
Congresswoman Carol Shea-Porter represents New Hampshire’s 1st District.