Wealth Gap + Rising Costs = Worker Frustration
From the Secretary-Treasurer: William Lucy
Corporate profits soared by over 21 percent from 2004 to 2005 — to $1.35 trillion, a 40-year high. The average American CEO earns almost $12 million a year in salary, bonuses and equity-based incentives — 431 times the average worker's salary of $27,485! Compensation for CEOs at 1,500 large U.S. public companies rose 14.5 percent from 2003 to '04. Meanwhile, worker pay continues to stagnate, with no upturn in sight.
What do these numbers mean? The divide between CEOs and working people — between the well-connected and the not connected — continues to widen, decade after decade. The question is not how much worse this huge differential will become, but whether we as a society can withstand it.
We've never been a classless, egalitarian society; there have always been the wealthy and the workers. We know that, unfortunately, there is not necessarily a connection between how much people are paid and the value to society of what they do. (If there were, teachers would be paid a lot more than professional athletes.) But when you consider the cavernous income gap along with the rising cost of health insurance, fuel, and most other goods and services, the effect is that many people are rightfully angry about their current condition and concerned that tomorrow may not be better.
A FADING DREAM?
We've come to expect and even to accept that our children won't achieve the kinds of economic successes that older generations could anticipate. Sure, we continue to tell our kids and grandkids that with hard work, they can achieve the American Dream: a "good" job with "good" benefits and home ownership. But the traditional compact between employer and employee has deteriorated and retirement security is becoming a relic of the past. We hate to consider what younger generations will encounter in 30 or 40 years.
President Bush and those like him seem to have a "let them eat cake" attitude. How else to explain that their only answer to these challenges seems to be to keep cutting taxes for rich folks? In Bush's view of the world, tax cuts for big business and the wealthy produce new and better jobs that will keep our economy humming along. The reality is that the tax cuts in and of themselves have not led to jobs.
In fact, from June 2003 to December 2004, when Bush's "Jobs and Growth Plan" was supposed to produce 1.4 million new positions, fewer were created overall than would have been added without the tax cuts.
POOR PEOPLE & BILLIONAIRES
In its January 2006 report, "Nothing to Be Thankful For," United for a Fair Economy (UFE) points out that tax cuts "fattening the rich do not trickle down to put food on the table for the working class or the middle class." While the cuts certainly have benefited the super-rich, they have done little for the poor. In 2004, the number of poor people in our nation grew by 1 million — and in the same year, according to UFE, nearly 400 more people became billionaires.
Everybody knows that you can't do the same thing over and over again and expect a different result. Yet Bush continues to count on tax cutting as a strategy that will produce positive results when that clearly is not happening.
What we need are new strategies: a higher minimum wage; a sound industrial and manufacturing policy that will ensure good jobs, salaries and benefits; health care reform; investment in our schools and in our infrastructure. Taken together, those steps will give workers hope that the American Dream still lives and that we all can share in it.
