The Economic Policy Institute’s report on “The State of Working America 2004/2005” paints a bleak picture of weak labor markets, a drop in real wages and a decline in job quality.
Bush’s plan to boost job creation is to give millionaires a tax cut averaging $123,000. And this is on top of his earlier tax cuts to the wealthiest 1 percent. This will run up government debt by an unsustainable $5 trillion over the next 10 years, according to economists Peter Orszag, Robert Rubin and Allen Sinai.
Bush’s tax policies accelerate a larger trend, which has doubled the share of national wealth owned by the richest 1 percent, while promoting income inequality, report Edward Wolff and Jared Bernstein. The result, they write, is to “leave the country more class-bound, less democratic, more riven by wealth and income gaps that mean people’s life opportunities are unequal.”
Wolff and Bernstein cite other factors promoting deeper inequality: falling levels of unionization, corporate globalization, a declining minimum wage, lower taxes on corporations, a sharp increase in military spending and a leap in compensation for the top executives.
To survive, families have taken on more debt, with the ratio of household debt to disposable income reaching 108.3 percent.
Low interest rates have fueled a housing bubble, sharply increasing home equity. In the process $4 trillion was “created” in what Dean Baker at the Center of Economic and Policy Research calls “bubble wealth.” This nest egg was tapped to sustain levels of consumption, buying some economic time. But as Baker points out, “There is no doubt that the housing bubble will burst.”
Team Bush is determined to make “working America” absorb all the costs. As the study by the Economic Policy Institute reports, the resultant policies mean a sharp increase in the number of working poor, a reduction in unemployment benefits, a minimum wage kept below the poverty line, a continuing shift of manufacturing jobs overseas, union busting, more part-time work, less overtime pay, fewer benefits, elimination of company pension plans, the disproportionate concentration of Black and Hispanic workers in poverty level jobs, maintenance of the gender gap, and acceleration of the concentration of wealth.
It is the condition of working America that is inspiring demands for universal health care; a national living wage; protection and enhancement of Social Security to make it immune from privatization; employer provided pensions; an end to NAFTA, MAI and FTAA; the guaranteed right to organize and the repeal of all anti-labor legislation; fully funded public education; an end to the criminalization of poverty; progressive taxation; urban reconstruction; and much more.
The author can be reached at economics@cpusa.org.
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