Tuesday, February 05, 2008

The Rich Get Richer While the Rest of Us...

You read & see the stats all the time- the middle class is losing its spending power & is on the decline. Wages are flat. Meanwhile the poor are getting poorer. Not good news after the huge expansion of the middle class in the 50'-70's. During these same years, the richest taxpayers suffered large declines while today not only are there more of them, they are much, much richer.

A concrete example of the latter was the number of empty/declining mansions in Newport. They were yours for a song post-war. This was due to high maintance costs and staffing for day-to-day operations in the summer season and even in the winter. The upper income classes also paid the highest income taxes ever under Eisenhower- 91% along with a corporate tax of 45%! And it worked. It was the largest re-distribution of wealth ever undertaken.

So I found this neat website which can be utilized to convert historical money values into today's worth. It has many different types of calculators & is also useful for pound to dollar conversions.

For fun I plugged in my first year teacher's salary. The pay was lousy even in 1970 ($6600). My dad had told me not to take any job that paid less than $10,000 plus benefits. However, he hadn't counted on year two of a recession. BTW, both federal & state gov'ts paid much of my college tuition with most of my loans forgiven for teaching in a "federally impacted" area. No such break today. My loan was 3.5% & guaranteed by the gov't.

I was mildly surprised to realize that the starting salary 35 years later had declined by $2,700/yr. in spending power.

But the good times were not yet over. In 1966 I graduated from h.s. & landed a summer job with the gov't (yep, they had them then for students). I worked at Ft. Holabird in Baltimore City for NSA.

I earned minimum wage, so I was definitely low income. The wage then was $1.60. To match that spending power today, I would need to earn $10.22/hr. The actual federal minimum wage is $5.85. Uh-oh. It's $7.40 in R.I. (and $6.15 in Maryland). Problematic- to put it mildly. No wonder the poor are poorer. They've lost almost $3/hr. in R.I. For a 40 hr. week, 52 wks./yr. that translates into almost $6000/yr. in lost spending power.

What does this mean on a wider basis? It is another example of how soaring ten year corporate profits and top level incomes with unprecendent economic expansion translates into less and lesser for most of us. Along with rising unemployment rates & the current mortgage crisis, that growth has translated into zip (and minus zip) for almost everyone.

To insist that Rhode Island's current economic downturn is solely our own fault is at best naive. For Republicans still to align themselves with the massive failure of "trickle-down" economics resulting in a new Gilded Age is downright dangerous. It is the "Economy, stupid." What we need is "gushing upwards" economic plans rather than praying for the manna to trickle down from the heavens with our fingers crossed.
I believe in a relatively equal society, supported by institutions that limit extremes of wealth and poverty. I believe in democracy, civil liberties, and the rule of law. That makes me a liberal, and I'm proud of it.
....Progressives are those who participate, explicity or implicity in a political coalition that defends and tries to enlarge those institutions. (Paul Krugman, economist & N.Y. Times columnist)

That about says it all. We need to re-evalute our State income tax for a beginning. To lose big monies in tax breaks for the wealthiest is just plain stupid, stupid, stupid. To do this while cutting off kids from medical care or families from a basic safety net (appx. $250 bucks/mo. for a mother with 2 kids), and burying much of us with fees, fines, bridge tolls and other increases (please, NEVER refer to these things as taxes), is shameful. So much for family values.

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