The economy of the Rocky Mountain West,
particularly in the states of the Northern Rockies, has thrived
because of our burgeoning middle class. For more than half a
century people who were once low-income earners have found their
way onto the “up” escalator and into the middle class.
A continuing series of enlightened
strategies by both the public and private sectors have steadily
carried westerners and many other Americans from near poverty
to middle class and even beyond toward wealth. It is the vitality,
productivity and spending power of middle-income people here
in the West that has spurred our economy, protected our small
businesses and, yes, made multi-millionaires in the Rockies and
The most recent news is that
last year, 2004, middle-income workers suffered an across-the-board
pay cut for the first time in 14 years. That news has had a disquieting
effect on economists, Wall Street, organized labor, and others
who appreciate the value of middle-income purchasing power to
the West’s economy.
However, it is starkly obvious
that not everyone is losing access to the escalator. Corporate
bonuses, skyrocketing salaries, stock options, and numerous other
payouts have assured upper income earners of some very good years.
A recent study by the Economic Policy Institute finds that in
2004 an astonishing 95% of workers found no after-inflation increase
in their pay envelopes, while the top wage earners were doing
very well indeed with salary increases and bonuses for chief
corporate executives skyrocketing more than 14%.
With the increasing inflationary
pressures on the rise, most notably the $2.15 per gallon for
gasoline, soaring prices for new homes, and a staggering 7% per
year increase in healthcare costs, the middle-income squeeze
is on. Astonishingly the President and the U.S. Congress seem
determined to reverse gears and put the “up” escalator
on the downward path, while continuing to line the pockets of
the already rich. A $290 billion tax cut for the wealthiest sliver
of Americans is poised to pass the Congress and be joyfully signed
by George W. Bush. At the same time, cuts are proposed for Social
Security, Medicaid, job training and effort after effort that
have historically moved people from economic hard times into
the middle class.
These strategies, both public
and private are not random but rather are purposeful. They are
bad economics for America and particularly harmful here in the
West where middle-income workers represent the region’s bread
Pat Williams served nine terms as a U.S. Representative
from Montana. After his retirement, he returned to Montana and
is teaching at the University of Montana where he also serves
as a Senior Fellow at the Center for the Rocky Mountain West.