Essay by Martha Quillen
Economy – September 2003 – Colorado Central Magazine
ORDINARY WORKING PEOPLE can’t afford to live in Aspen, but that’s okay; Aspen is grander than diamond toothpicks. It’s a little more sobering, however, to realize that most families couldn’t really afford to move to Salida these days, either. Salida is a gorgeous resort town, though, so that’s not entirely surprising.
But if you’re one of those Central Colorado residents who think you’ll just move to a more prosperous but cheaper place if utilities and expenses here get too costly, think again. The real tragedy today is that many working people can’t afford to live anywhere in the country.
Back when Bush the elder was president, news commentators fussed because CEOs typically made more than 40 times as much as factory workers. Managers were getting richer while workers received less and less for their efforts (and when management really messed up, workers lost their pensions while CEOs walked off with millions).
Something was clearly wrong with the American economy a dozen years ago.
And it hasn’t been fixed. On the contrary, things have gotten worse. Today, the highest-paid managers in a corporation typically make more than 400 times as much as workers on the line.
In The Working Class Majority: America’s Best Kept Secret, author Michael Zweig cites statistics from Business Week that say executives made 41 times more than average factory workers when Ronald Reagan was elected; 141 times more by 1995; and 419 times more by 1998.
And the decline in labor conditions goes beyond mere income discrepancy.
“In the last two decades the working class has experienced lower real incomes, longer hours at work, fewer protections by unions or government regulations, and inferior schools,” Zweig says.
And he isn’t the only writer expressing concern. There’s definitely no shortage of books bemoaning America’s lopsided economy.
Charles M. Kelly, author of Class War in America is so rabid about recent economic policies, he practically foams. According to Kelly, conservatives and Wall Street favor record profits, unemployment, and stagnant wages. Kelly despises Alan Greenspan’s tendency to refer not to “inflation,” but to “wage inflation” — as if workers making a decent living wage were a threat to the American economy.
“The charter of corporate bureaucrats,” Kelly maintains, “is to do anything to maximize profits, even if the net result is harm to workers, their communities, or the society at large.”
KEVIN PHILLIPS, a rising young GOP strategist in the ’70s, switched course to write The Politics of Rich and Poor, in which he criticized the political transfer of massive amounts of wealth to the already wealthy.
And the titles of his subsequent books speak for themselves. Phillips is the author of: Arrogant Capital: Washington, Wall Street and the Frustration of American Politics; plus Boiling Point: Democrats, Republicans, and the Decline of Middle Class Prosperity; and Wealth and Democracy: A Political History of the American Rich.”
Donald Bartlett and James B. Steele deplore the “dismantling of the middle class” in America: What Went Wrong?
In her book, Nickel and Dimed, Barbara Ehrenreich takes a more personal view of what’s wrong with our economy by working as a maid, a Wal-Mart clerk, and a waitress and trying to get by on working class wages (but failing miserably).
And of course, Michael Moore continues to rail against American injustice and inequality.
There are also books by Milton and Rose Friedman, Thomas Sowell, and other conservatives who champion competitive capitalism, and books which enthusiastically relate the success stories of America’s newest millionaires, and books about how to make money and invest in the stock market.
But read as you may, you won’t find many books which claim that typical American workers are doing well.
On the contrary, in Rich Dad, Poor Dad, a treatise on the investment strategies of a wealthy father — which is one of America’s most popular instruction manuals on how to make millions — Robert Kiyosaki actually says the opposite. According to him, uninformed losers are the “ones who get up every day and diligently go to work and pay taxes.”
And as for paying taxes: “The rich don’t … the poor and middle class do.”
In Kiyosaki’s world, wealth is properly reserved for those who study markets, take risks, and invest; wealth seldom comes to those who merely excel in school, work hard, and pay taxes.
“The main cause of poverty or financial struggle is fear and ignorance, not the economy, or the government, or the rich,” Kiyosaki contends. Then he promises that you can have it all — money, golf and power — if you just learn to play the game the way the wealthy do.
BUT IF EVERYBODY FOLLOWED Kiyosaki’s advice, who would erect the buildings that he and his rich followers buy and sell? Who would manufacture the luxuries they crave?
Obviously, not everyone can be a successful capitalist. Some of us have to produce the stuff that the millionaires invest in.
But Kiyosaki isn’t the only financial advisor who regards modern workers as unproductive and ineffectual. In fact, Robert Reich, President Clinton’s Secretary of Labor, implied that very thing in his book, Locked in the Cabinet. Reich strongly supported re-education programs for displaced, “unskilled” workers. But in doing so, he ignored some obvious truths.
First, although mining and manufacturing jobs are being lost to mechanization, some unemployed mechanics and machine operators have skills that are still in high demand — except their jobs have been moved to less expensive, foreign countries.
And many highly educated professionals are also in trouble these days. Currently, foreign doctors, engineers and technicians from troubled hotspots are seeking work in the U.S., and corporations are trimming expenses to serve stockholders rather than employees and customers. Doctors working for HMOs are losing prestige, authority and income; middle managers are losing jobs; and engineers and technicians are looking for work. Thus, we’ve got downsizing and job insecurity for all.
Likewise, many of the jobs that unemployed Americans are being retrained to perform are actually repetitive data entry positions that require minimal skills and pay minimum wage. But there just aren’t very many secure careers in the United States today — except for cooking and cleaning, and similar occupations that offer low pay and no benefits.
AT THIS POINT, America’s fastest growing job market lies in low-income service jobs. So what is it that all of those pompous politicians want to retrain people to do? Peel potatoes?
Today, Americans work more hours than they used to, and unions seem powerless. Instead of one wage-earner, it often takes a man and woman — and sometimes even a working child or two — to keep a family afloat.
From the early seventies until the late 1990s, wages in the U.S. failed to keep pace with inflation, and housing prices soared beyond the reach of many families. Today, no one knows how many homeless people live in cars, cities, and campgrounds.
And many of the offenses which beget our huge crime rate are basically economic: from illicit drug sales, to theft, prostitution, vagrancy, forgery, embezzlement, fraud, insider trading, and dealing in stolen property.
In the 1980s, Reagan debilitated unions by quelling strikes. In the ’90s, trade agreements sanctioned by Clinton increased third-world competition for American jobs. And in the new millennium, President Bush cut taxes for many beleaguered families.
But our country is trillions of dollars in debt once again, and the U.S. is spending billions in Iraq. The feds have slashed domestic funding, and now, state and local governments are hard-pressed to finance traditional services. Consequently, college tuition has increased, and this fall parents will have to buy more school supplies.
Throughout the country, federal, state and local governments are reassessing their budgets. And in all probability, most Americans will probably have to spend their federal tax refund and hundreds of dollars more to keep their schools, hospitals, parks, licensing offices, libraries, and campgrounds running.
In the long run, only the very wealthy — with huge refunds — are likely to benefit from recent tax cuts. Meanwhile, local and state taxes and fees will probably rise.
But that eventuality was hardly a secret. On the contrary, according to the wisdom of talk-show philosophers, the fabulously wealthy deserved a break because they had been paying almost all of our taxes.
Of course, you’ve no doubt heard the tales about people who want a refund even though they don’t pay taxes. But such stories are not entirely candid.
After all, everyone pays taxes, because there are taxes on housing, gasoline, prescription drugs, and even food. And despite all of that sniveling by conservatives, the working poor usually contribute a higher percentage of their income to taxes than the rich do — because American workers pay ample sales, property, and social security taxes.
But apparently some Americans won’t be satisfied until the working poor bear a higher percentage of income tax, too.
Unfortunately, however, those same conservatives don’t seem upset when American workers don’t get their fair share of income.
Although business boomed in the 90s, workers did not reap many rewards. “Workers stopped sharing economic growth after 1972,” Michael Zweig reports. Despite national increases in output and productivity, real wages fell.
In 1998 and ’99, middle-class Americans finally got a raise as wages crept ahead of inflation, but their good fortune was short-lived and meager. The wealthy, on the other hand, made out like bandits throughout the ’90s.
In order to simplify records, statisticians divide Americans into five quintiles based upon income. From 1968 to 1997 the bottom four quintiles lost out; only the wealthiest surged ahead.
According to Kevin Phillips, “By several measurements, the United States in the late twentieth century led all other major industrial countries in the gap dividing the upper fifth of the population from the lower [four-fifths]…”
In 1989, the top 4% of Americans earned as much as the entire bottom half.
By 1997, the top 10% of Americans held 73.2% of the country’s entire net worth.
BUT THAT’S THE WAY IT IS — and the way it has been for a long time. The rich revel in profits, while the working class barely hangs on. And that’s been especially true in Colorado. In fact, people in L.A., Santa Fé, and Montana now worry about “Aspenization,” a term coined to describe what happens when rich people move into a community and prices sky-rocket.
And unfortunately, Salida’s stats look worse than most. Despite the million-dollar second homes adorning our ridges, wages in our region are low. According to the U.S. census, in 1999 median family income in Salida (meaning half of families made more and half less) was $38,240; in the U.S. it was $49,600; and in Colorado, it was $55,883.
All of the counties in our region (Alamosa, Chaffee, Custer, Frémont, Gunnison, Lake, Mineral, Rio Grande, and Saguache) fell below the state median except Park, and we suspect that’s due to Bailey, Conifer and Pine rather than Fairplay. Saguache came in lowest with $29,405 and Gunnison highest at $51,950.
Oh, well…. Presuming the alarmists are right about the direction things are going in our country, maybe we can make money teaching others how to get by on less.
Under Reagan Americans got downsizing. Under Clinton jobs went overseas. Under both Republicans and Democrats, working Americans have lost ground.
That trend has been well-documented by conservatives and liberals, in books, magazines, government reports, and The Wall Street Journal. But the most interesting book I’ve happened upon regarding this subject is The Myth of the Middle Class by Richard Parker.
Written way back in 1972, Parker’s book makes it clear that trends we tend to blame on Reaganomics, globalization, downsizing, and NAFTA are actually not new. According to Parker, there was never a dominant middle class in the United States; it’s existence was merely a myth.
INSTEAD, there has always been a substantial underclass in our country, consisting of people we more or less ignore. In the beginning, slaves, indentured servants, native Americans, and backwoodsmen labored without adequate compensation, food, housing, or respect. Then, as the country became more industrialized, immigrant laborers, southern Negroes, and the rural poor toiled in poverty.
Parker readily admits that conditions in early America were better than those in Victorian England, where primitive industrialization created appalling conditions. Yet even so, he presents an impressive case to prove that poverty and deprivation were not uncommon in early America — or even in the early 1970s when he wrote his book.
Parker contends that a “stable moneyed aristocracy” exists in the U.S., and most of the citizens we regard as middle class aren’t.
As he sees it, at least one-third of all Americans have always gotten by without adequate housing, health care, and education. And many — or perhaps even most — Americans have never been “comfortable.”
From the very first, the wealthy in America had access to better education, health care, legal advice, and representation. In short, U.S. political policy has always favored those who can pay well.
But The Myth of the Middle Class, focuses on modern Americans, because Parker believed they were in grave jeopardy. In his view, popular economist John Kenneth Galbraith and other 1950s and ’60s mentors made things more difficult for the working class by characterizing Americans as affluent, shallow, and given to excess and luxury.
For America’s gentry, that was no doubt true.
But soon politicians and the popular press subscribed to that view and ignored the hard-pressed common citizens who lived on hamburger, macaroni and cheap white bread, in inadequately maintained houses, while avoiding doctors and dentists in order to save money for serious emergencies.
Yet even so, John F. Kennedy and Lyndon Johnson developed an interest in diminishing poverty (after an influential book revealed pockets of grinding poverty in the American heartland).
In reality, a frighteningly large proportion of Americans lived in dangerous, deficient and/or overcrowded housing; ate inadequate, starchy diets, low in fresh fruits, vegetables and protein; and couldn’t afford modern hospitals or medical advances. For the majority of Americans, schools were inadequate; wages meager; workdays long; and despite all of the talk about opportunity, the deck has always been stacked against upward mobility.
But Kennedy put the matter into the hands of his technical experts.
And when Lyndon Johnson declared war on poverty, he retained Kennedy’s aristocratic advisors.
ACCORDING TO PARKER, “technically trained elites have invaded not only the economy, but the politics of America. The Economic Opportunity Act, instead of ‘bringing together political combatants to hear their claims,’ represents an important shift in the sources of public policy….”
After the 1960s, the presumed experts on inadequate income, poverty, scarcity, and deprivation were politicians with doctorates, former college professors, and aristocrats.
Before that era, workers and union representatives sat in on political meetings. But afterwards their needs were represented by “experts.” Parker regards this phenomenon as “patronizing” and “elitist” and an affront to democratic principals, which he likens to previous attempts to silence “the mob” and “rabble.”
This trend, in Parker’s mind, essentially silenced the working classes. They no longer had a voice — and weren’t even welcome at the table.
According to Parker, the situation was already untenable when he published his book in 1972. By 1965 wealth was concentrating into fewer and fewer hands. The total wealth of the richest 2% was greater than the U.S. Gross National Product. And “trickle down” economic theories (which apparently predated President Reagan) weren’t working.
By the early ’70s, workers paid a higher percentage of taxes than anyone else — because food, housing and gasoline were taxed more than luxuries.
And workers didn’t get the full benefit of publicly funded hospitals and education. In a 1962 study, “45% of all cases hospitalized under union insurance plans received substandard care.”
Moreover, loopholes and lawyers allowed the rich to pay far fewer taxes than the system implied they should. And to make matters worse, it had become fashionable to blame the poor for their plight. According to political elites, those who failed “did so not because of the defects of the social system but because of personal inadequacies.”
Parker concluded that under the circumstances, it was high time we gave a political voice back to the common man — because the democratic elites had entirely lost sight of American ideals (which presumably included justice and equality).
BUT PARKER WROTE his polemic more than thirty years ago, and nothing happened. Citizens didn’t start clamoring for more representation — any more than they do today.
Instead, Americans remained silent. And today many don’t even bother to vote.
Since deficiencies are nothing new to working Americans, one might assume that they are basically content living frugally and seeking more important things from life than money. But the powers that be make living on America’s stagnant wages almost impossible.
Housing, health care and utility prices have soared, and communities have adapted more rigid and costly standards for home repairs, day care providers, and vehicle emissions and safety.
Understandably enough, communities and property owners want to maximize the value of real estate. Zoning generally discourages trailers, and neighborhood covenants favor starter castles. But that puts home ownership beyond the reach of many families. And societal standards have risen, too. Now it’s assumed that children deserve a hospital delivery, indoor plumbing, seatbelts, and good teeth. Nowadays, it’s mighty expensive to raise a family.
Yet Americans seldom join unions, or clamor for better wages, or picket, or write their congressmen, or boycott products and businesses.
But they do express their anger with one another.
From the very beginning, corporate interests have pitted working Americans against each other. According to Colorado, A History of the Centennial State: “Corporate motives for importing Japanese laborers were, as always, the same — the availability of cheap, reliable labor. Displaced employees also reacted predictably. At the Chandler mine in Frémont County, a mob attacked Japanese in 1902.”
In It’s Your Misfortune and None of My Own, Richard White wrote: “Bottom-tier jobs became, almost by definition, minority jobs because employees argued that minorities were racially suited to them … Chinese, Mexicans, Filipinos, and other nonwhite workers were supposedly suited to agricultural stoop labor by their small size, tolerance for heat, stoicism, minimal wants, and lack of ambition. Conversely, whites argued that minorities lacked the qualities — ambition, skill, and intelligence — necessary for better jobs.”
Today, we blame high health care costs on smokers, the uninsured, and those who bring “frivolous” law suits. We blame homelessness, unemployment, and poverty on people’s sloth, ignorance, and poor family values. Environmentalists are deemed responsible for lay-offs, unemployment, and downsizing. Foreigners and immigrants are despised for stealing our jobs. Miners, loggers and farmers are blamed for destroying the environment.
Instead of blaming insufficient wages, miserly benefits, regressive taxation, and poor corporate values for our woes, we bicker and blame one another. And thus the rich get richer, and everyone else falls behind.
So what can we do?
Well, Richard Parker has suggested one avenue: We can speak out, protest, and make demands. We can campaign and clamor for our fair share — just like corporations and lobbyists clamor for theirs.
But to change anything, American workers would have to recognize their common interests and band together.
And at this point, working Americans seem so divided over war, religion, environmentalism, gay marriage, monetary matters, and morals that it’s impossible to imagine that happening.
So what will happen?
WAGES WILL GROW as rapidly as trees above timberline — for those lucky enough to stay employed — while the price of houses, utilities, home repairs, property taxes, tuition, hospitals, ambulances, and the like will bound ahead.
Tax breaks for the rich will mean the dying middle class will have to pay more to make sure that children are educated (and so our streets aren’t littered with the bodies of the poor, the handicapped and the elderly).
Health care will soon be beyond the means of anyone not employed by a major corporation.
And in Central Colorado, waitresses, cooks, secretaries, and clerks will be commuting to upscale resorts from service slums.
And finally, in the not too distant future, democracy as we know it will be gone because the whole damned country will be divided into trendy, well-to-do villages and shabby backwaters where schools, medical care, streets, and services will be inferior — and where congressmen, commissioners, lawyers, doctors, and emergency workers fear to tread.
In the meantime, wealthy campaign contributors are lunching with their congressmen, and corporate lobbyists are working on the hill — arranging more tax breaks, and bail outs, and government contracts — because money is powerful.
But so are numbers.
So for those of us who can’t afford yachts and congressmen the obvious question is: How will we curb our self-destructive impulses and learn to work together?
Damned if I know.
–Martha Quillen
