On Labor Day, the Economic Policy Institute issued its Report on The State of Working America. This year’s Report offered sobering statistics on American workers’ declining living standards, and the growing disparity between the very wealthy and the rest of Americans. It documented an economy plagued by slow job and wage growth – even though productivity is at a record high. It revealed an economy where corporate America benefited at the expense of working America.
Among the most troubling findings were those that showed continued erosion in the standard of living for middle class workers and the poor since 2000.
- Between 2000 and 2004 (the latest data available) the income of those families right in the middle fell by 3% (after adjusting for inflation).
- At the same time household incomes for the top 1% of Americans grew. One factor that contributed to their growing wealth was the Administration’s tax policy. This year, for example, tax cuts saved workers in the bottom 20% of the income bracket only $63 dollars compared to a savings of roughly $44,477 for the wealthiest 1% of Americans.
- While workers’ wages stagnated or declined, this period saw payments to CEO’s skyrocket to 262 times the average worker’s wages. To put it in perspective, “in 2005 a CEO earned more in one workday (there are 260 in a year) than what the average worker earned in 52 weeks.”
- During the 1990s, the U.S. poverty rate declined, however, between 2000 and 2004 poverty rates rose marking the “first time that poverty rose through each of the first three years of a recovery.” This is just one more example of the growing disparity between the rich and poor. Compared to other countries the U.S also lost ground. By 2004, the U.S. boasted the second highest per capita income among the Organization for Economic Cooperation and Development (OECD) countries but, in sharp contrast, had the highest overall poverty rate (37 million Americans – 12.7 percent of the population – including 13 million children). The Report noted, “The de-emphasis on redistributive social policies only exacerbates the high levels of poverty and income inequality in the United States.”
Also contributing to the decline in working America’s standard of living was the loss of critical benefits.
- The number of workers earning a pension through their jobs declined, and the quality of the pension plans suffered as companies shifted to defined contribution pension plans from more secure defined benefit pension plans.
- Health care costs continued to skyrocket, and the ranks of the uninsured or underinsured grew. Although the United States spends more than most countries on health care, by 2004 roughly 46 million Americans had no health insurance, and an estimated 40% of adults surveyed said they “have gone without needed care due to costs.”
The ground lost by working families since 2000 ties back to the anti-union, pro-business sentiment ushered in with the 2000 election. Although the Report documents the union-advantage in terms of higher wages, job quality, and access to pension and health benefits, it notes there are fewer unionized workers today. The Report points out that this “deunionization has affected wages and compensation across all groups, but particularly among blue-collar and high school-educated male workers.”
The November election offers all workers an opportunity to shift some of the wealth and power back into the hands of those that labor each day to build our schools, teach our children, keep us safe, and care for the sick and elderly. It is our opportunity to make our voices heard and our votes count.
This section provides information on the candidates’ voting records on working family issues. WE WILL DECIDE the future of working families if you exercise your right to vote on November 7th.
Source: The State of Working America is prepared every two years and monitors the economy’s impact on workers and their families.
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