Still not Getting by in Bush's America
August 24, 2004
By Joel Wendland
to recent statistics provided by the U.S. Census Bureau, the gap
between the rich and poor since 1967 has grown by 75 percent. While
the average total household income for families in the bottom 20
percent has grown by $2,500 since 1967, the top 20 percent have
seen their incomes soar by about $62,000.
According to the same report, the share of national income held
by the bottom 20 percent fell to only 3.5 percent. In other words,
approximately 26 million households combined to earn only 3.5 percent
of the total income earned by people in the US.
While income has sunk for the poor, the middle strata have seen
their wages stagnate over the same period. Meanwhile healthcare
costs, housing, education, gas and oil, and food have soared.
This growing disparity is of special concern as the jobs picture
has looked bleak in the last three years. In the first two years
of the Bush presidency, 2.6 million jobs were lost, nearly doubling
the unemployment rate. While the Bush administration points to recent
jobs creation to build a case for its reelection bid, over 1.5 million
jobs remain unaccounted for.
The jobs that have been created, says economist Art Perlo, may
not even cover the number of people who entered the work force for
the first time in the same period. This is certainly the case in
recent months with only 112,000 jobs in June and 32,000 new jobs
in July. At least 140,000 new jobs need to be added "each month
just to absorb new workers," Perlo says.
Further, according to economists, 60 percent of the jobs that
have been created pay less than the national average in wages, the
vast majority are in the low-paying service sector, few provide
benefits such as health care coverage, and as many as 1/5 are temp
jobs. Currently, the national average of weekly wages is at its
lowest point since the official end of the Bush recession in late
Many observers attribute this economic picture to job losses generated
by outsourcing of work offshore. This is partially true, argues
economist Doug Henwood of Left Business Observer in an interview
with Political Affairs, but outsourcing, while a major problem for
working people, accounts for only a relative handful of job losses
in the last three years.
The number of jobs that have been outsourced is in "the low six
figures" in this period, but a normal economy in recovery should
have created about 8 million jobs, says Henwood. The Bush economy
has failed to do so.
In the wake of the long term trend of economic polarization, recent
unemployment, and what the Bureau of Labor Statistics describes
as underutilization (underemployment or having more than one job
to earn a living wage), the Bush administration has followed a narrow,
ideologically driven economic stimulus policy of tax cuts on top
of tax cuts.
In addition to the obvious problem of eliminating hundreds of billions
of dollars from the treasury in the face of needed resources for
the Iraq and Afghanistan misadventures and the transformation of
large budget surpluses into enormous deficits, Bush tax policies
have compounded economic problems for workers, suggests the findings
of a recent Congressional Budget Office (CBO) report.
The budget crisis has first allowed the Bush administration to
adopt its ideological imperative to cut government services. Among
those have been important programs like veterans benefits, funding
for public education, environmental protection and cleanup, child
poverty programs, agricultural subsidy programs, medical research
funding, and so on.
In addition to this, Bush has eliminated hundreds of millions of
dollars from worker training and relocation assistance funding for
unemployed and displaced workers.
If that isn't enough, the direct result of the tax policies has
been to intensify the polarization of wealth and poverty. According
to the CBO, the top one percent of income earners, who average about
$1.2 million each year, received 1/3 of the benefits from the tax
cuts Bush pushed through Congress since 2001. Households in this
income bracket received an average of $78,000 annually from the
tax cut. The top 20 percent, averaging over $200,000, took in 2/3
of the total windfall from the tax cuts.
The bottom 20 percent of wage earners averaged only about $250
in returns in the last three years. The tax benefit to the top 1
percent alone - the very richest of Americans - equals what it would
cost for two wars in Iraq or what experts believe it would cost
for two years to provide every American with health care coverage.
While Republicans claim that these statistics prove that the tax
cuts benefited everyone, it is clear that Bush's tax policies have
shifted the burden of financing federal spending to the working
class. It is we who will have to pay for these tax policies: we
will pay disproportionately to make up for the growing deficit with
higher interest rates, higher tax rates, and more cuts in social
services we all rely on.
Joel Wendland is managing editor of Political
Affairs, blogs at ClassWarNotes,
and can be reached at email@example.com.