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Downward Mobility

While accomplishing little else of substance in this election year, the House of Representatives voted in June, for the eighth consecutive year, to award all members of Congress cost-of-living increases in their annual salaries amounting to a hefty $168,500, not including the many perks they enjoy.

Washington’s policymakers have not, however, managed to muster a similar bipartisan resolve to raise the federal minimum wage of $5.15 per hour, unchanged since 1997, leaving a family of three $6,000 below the federal poverty line-the lowest proportion of the median annual wage since the years immediately following World War Two.

The human toll of this heartless government policy was illustrated on this Labor Day weekend, when six Chicago siblings, aged three to fourteen, perished in an apartment fire. The source of the fire proved to be the candles this poor family was using for light because they had been without electricity since May.

The mother escaped with one child, and a neighbor was able to rescue another. But more children appeared at a window screaming, “Help! We’re burning!” to helpless bystanders, and arriving firefighters soon found the six dead siblings huddled together in the room where the candle burned.

Downward mobility

This image should shatter media depictions of the U.S. as a predominantly “consumer society.” Those in upper income levels have certainly engaged in a spending spree over the last several years. But those in the lower echelons have been struggling to survive. Class stratification has not been this pronounced since the late 1920s.

Since 1997, the last year in which the minimum wage rose, gasoline prices have risen by 140 percent, and home heating oil by 120 percent. Since 2000, health care premiums have gone up by 73 percent.

But all workers’ wages have been falling in the current economic expansion-declining roughly $2,000 per household since 2000. This marks the first recovery since World War Two that has failed to offer a sustained rise in workers’ wages.

In the first quarter of 2006, wages and salaries accounted for only 45 percent of gross domestic product, falling from nearly 50 percent in the first quarter of 2001 and a record 53.6 percent in the first quarter of 1970, according to the Commerce Department.

New York Times reporters Steven Greenhouse and David Leonhardt commented on August 28, “[W]ages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960s. UBS, the investment bank, recently described the current period as ‘the golden era of profitability.'”

Between 2000 and 2005, the real median income of households headed by persons under the age of 65 fell by 5.4 percent, paralleling the nosedive in incomes during the Reagan era. The U.S. Census Bureau reported in August that wages and salaries fell by 1.8% for men and 1.3% for women last year alone.

Roughly one-fourth of all low-income families with a full-time worker has been unable to pay the rent or mortgage at least once during the past year, and the same number report being unable to put enough food on their families’ tables.

In 2005, the number of Americans without health insurance increased for the fifth straight year. The number of uninsured Americans rose to 46.6 million in 2005, to 15.9 percent from 14.2 percent in 2000.

Economists at Goldman Sachs accurately noted, “The most important contributor to higher profit margins over the past five years has been a decline in labor’s share of national income.”

“There are two economies out there,” political analyst Charles Cook recently described. “One has been just white hot, going great guns. Those are the people who have benefited from globalization, technology, greater productivity and higher corporate earnings.

“And then there’s the working stiffs,” he added, who “just don’t feel like they’re getting ahead despite the fact that they’re working very hard. And there are a lot more people in that group than the other group.”

The bipartisan project

But gaping class inequality cannot be blamed on the Bush administration alone, for this has been a bipartisan project, widening virtually without interruption since the mid-1970s, including during the Clinton-era boom.

As Ezra Klein noted in February’s American Prospect, “while electoral defeats help explain why Democrats couldn’t implement a comprehensive antipoverty strategy, they don’t account for why they couldn’t propose one. It’s not just that Democrats couldn’t bring policies onto the Senate floor. In this case, the backstage was empty too. The Democratic National Committee’s issues page never mentions the word ‘poverty.’ Nor does Harry Reid’s, Nancy Pelosi’s, the House Democratic Caucus, nor the Senate Democratic Caucus. Not a single one identifies poverty as an issue the Democratic Party cares to solve.”

Indeed, Democratic President Bill Clinton ended “welfare as we know it” in 1996, dismantling 60 years of New Deal legislation that obliged the government to assist the poor. It turns out no government agency bothered to follow the subsequent (mis)fortunes of the poorest Americans suddenly released from their “cycle of dependency.”

More than likely, former welfare families make up a substantial proportion of the 43 percent of poor American households now surviving on less than half the official poverty level in 2005-just $7,800 for a family of three.

Workers have not shared in the current economic prosperity that has sent corporate profits soaring in recent years. When the economy flat-lines in the coming months as the housing bubble bursts, the silent depression experienced by working families might finally enter the mainstream of public discourse. And the “golden era of profitability” should meet the same fate as the “Roaring Twenties”-in an explosion of class struggle-to finally begin to reverse the balance of class forces.

SHARON SMITH is the author of Women and Socialism and Subterranean Fire: a History of Working-Class Radicalism in the United States. She can be reached at: sharon@internationalsocialist.org

 

 

 

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