“Why There’s No Outcry”: At Some Point, Working People, Students, And The Broad Public Will Have Had Enough
People ask me all the time why we don’t have a revolution in America, or at least a major wave of reform similar to that of the Progressive Era or the New Deal or the Great Society.
Middle incomes are sinking, the ranks of the poor are swelling, almost all the economic gains are going to the top, and big money is corrupting our democracy. So why isn’t there more of a ruckus?
The answer is complex, but three reasons stand out.
First, the working class is paralyzed with fear it will lose the jobs and wages it already has.
In earlier decades, the working class fomented reform. The labor movement led the charge for a minimum wage, 40-hour workweek, unemployment insurance, and Social Security.
No longer. Working people don’t dare. The share of working-age Americans holding jobs is now lower than at any time in the last three decades and 76 percent of them are living paycheck to paycheck.
No one has any job security. The last thing they want to do is make a fuss and risk losing the little they have.
Besides, their major means of organizing and protecting themselves — labor unions — have been decimated. Four decades ago more than a third of private-sector workers were unionized. Now, fewer than 7 percent belong to a union.
Second, students don’t dare rock the boat.
In prior decades students were a major force for social change. They played an active role in the Civil Rights movement, the Free Speech movement, and against the Vietnam War.
But today’s students don’t want to make a ruckus. They’re laden with debt. Since 1999, student debt has increased more than 500 percent, yet the average starting salary for graduates has dropped 10 percent, adjusted for inflation. Student debts can’t be cancelled in bankruptcy. A default brings penalties and ruins a credit rating.
To make matters worse, the job market for new graduates remains lousy. Which is why record numbers are still living at home.
Reformers and revolutionaries don’t look forward to living with mom and dad or worrying about credit ratings and job recommendations.
Third and finally, the American public has become so cynical about government that many no longer think reform is possible.
When asked if they believe government will do the right thing most of the time, fewer than 20 percent of Americans agree. Fifty years ago, when that question was first asked on standard surveys, more than 75 percent agreed.
It’s hard to get people worked up to change society or even to change a few laws when they don’t believe government can possibly work.
You’d have to posit a giant conspiracy in order to believe all this was the doing of the forces in America most resistant to positive social change.
It’s possible. of course, that rightwing Republicans, corporate executives, and Wall Street moguls intentionally cut jobs and wages in order to cow average workers, buried students under so much debt they’d never take to the streets, and made most Americans so cynical about government they wouldn’t even try for change.
But it’s more likely they merely allowed all this to unfold, like a giant wet blanket over the outrage and indignation most Americans feel but don’t express.
Change is coming anyway. We cannot abide an ever-greater share of the nation’s income and wealth going to the top while median household incomes continue too drop, one out of five of our children living in dire poverty, and big money taking over our democracy.
At some point, working people, students, and the broad public will have had enough. They will reclaim our economy and our democracy. This has been the central lesson of American history.
Reform is less risky than revolution, but the longer we wait the more likely it will be the latter.
By: Robert Reich, The Robert Reich Blog, January 25, 2014
“Isolated From The Rest Of The Public”: The Tea Party And The Hammock Theory Of Poverty
The increased focus on inequality has shifted the conversation away from deficit/austerity mania and towards a discussion of what government should be doing to boost the economy and protect people from economic harm. And it’s also prompted good new polling that goes deep into public views of the economy, the safety net, inequality, and what government should do about it.
On these topics, this week brought two new polls from Pew Research and CBS News.
I’ve asked both firms for a detailed breakdown of their data, and here’s a striking finding: The ideas and assumptions underlying the GOP economic and poverty agenda are far and away more reflective of the preoccupations of Tea Party Republicans. Meanwhile, non-Tea Party Republicans are much more in line with the rest of the public on these matters.
In short, the Tea Party economic worldview, if such a thing exists, is isolated from the rest of the public, and even to some degree from non-Tea Party Republicans – yet it has an outsized role in shaping the GOP’s overall agenda.
Both the Pew and CBS polls find large majorities believe the income gap is growing, and both find that more Americans want government to do something about it. Both also find solid majority support for raising the minimum wage, extending unemployment benefits, and (in Pew’s case) taxing the rich to help the poor.
Both polls also find that far larger numbers of Republicans don’t think government should act to reduce inequality. This is reflected in the GOP economic agenda. As Jonathan Chait explains, this agenda continues to be premised on the ideas that there is, if anything, too much downward redistribution of wealth, that government shouldn’t interfere in the market by, say, raising the minimum wage, and that safety net programs lull people into dependency (Paul Ryan’s Hammock Theory of Poverty).
But here’s the thing. That basic set of assumptions — and the resulting positions on some of the individual policies being discussed – are held overwhelmingly by Tea Party Republicans; and not nearly as much by non-tea party Republicans. Key findings:
On government action to combat inequality:
* The Pew poll finds Republicans divided on whether government should do a lot or some to reduce inequality, versus doing little or nothing, by 49-46. But tea party Republicans overwhelmingly tilt against government doing something by 66-28, while non-tea party Republicans overwhelmingly favor doing something by 60-35.
* The CBS poll is less pronounced, but even here, Tea Party Republicans overwhelmingly oppose government acting to reduce the gap between rich and poor by 82-17, while non-Tea Party Republicans believe this by 66-29 (so nearly a third of non-Tea party Republicans believe it).
On unemployment benefits:
* The Pew poll finds Republicans oppose extending unemployment benefits by 53-44. But Tea Party Republicans overwhelmingly oppose this by 70-29, while non-Tea Party Republicans support it by 52-44.
* Similarly, the CBS poll finds that Republicans oppose extending unemployment benefits by 49-40. But Tea Party Republicans overwhelmingly oppose it by 58-31. Non-Tea Party Republicans favor extending them by 46-43.
On the Hammock Theory of Poverty:
* The CBS poll finds that Republicans believe unemployment benefits make people less motivated to look for a job by 57-40. But Tea Party Republicans overwhelmingly believe this by 67-32. By contrast, only a minority of non-tea party Republicans believe this (47-51).
* The Pew poll has a similar finding: Republicans believe government aid to the poor does more harm than good by making people dependent on government, rather than doing more good than harm, by 67-27. But Tea Party Republicans overwhelmingly believe this by 84-11, while non-tea party Republicans are somewhat more closely divided, 59-35.
On the minimum wage:
* The Pew poll finds that Republicans favor raising the minimum wage to $10.10 an hour by 54-44. But Tea Party Republicans overwhelmingly oppose this by 65-33. Non-Tea Party Republicans overwhelmingly support it by 65-33. (All the above Pew numbers include Republicans and GOP-leaners).
* The CBS poll is less pronounced, but even here, Tea Party Republicans tilt against a minimum wage hike by 52-47, while non-tea party Republicans favor it by 50-48.
A number of conservative reform types, such as Michael Gerson and Peter Wehner, and Michael Strain, have written at length about the need to break from tea party orthodoxy on economic matters, and to begin to envision an affirmative government role when it comes to strengthening (and reforming) the safety net, and even spending government money to combat the near term jobs emergency. I don’t know if non-tea party Republicans can be reached and split off from the tea party on these matters or not, but it does seem at least plausible, if the above numbers are an accurate picture of things.
Meanwhile, some Republican lawmakers do seem sincere about charting a new course on poverty. But the party agenda remains in thrall to a set of ideas that remain largely the province of a small tea party minority, and are not nearly as widely held among Republicans overall.
By: Greg Sargent, The Plum Line, The Washington Post, January 24, 2014
“A Moral Issue”: Blacks, Latinos To Pay Disproportionate Price Over Blocked Medicaid Expansion
Minorities are disproportionately affected by 25 states’ decision to opt out of Medicaid expansion, a report finds.
Blacks make up 13 percent of the nation’s population but will represent 27 percent of those who will lose out on Medicaid coverage because of these states’ refusal to expand the program’s eligibility to the national standard under Obamacare, according to the 11th Annual Martin Luther King Jr. State of the Dream Report.
Latinos make up 15 percent of the population and 21 percent of the coverage gap. Whites, meanwhile, will be underrepresented—they are 65 percent of the population but have only 47 percent in the gap.
Had the Affordable Care Act been fully implemented, half of the 50 million people who were uninsured before the 2010 law was passed would gain access to coverage through the state and federal health insurance exchanges or the Medicaid expansion. Because of the 2012 Supreme Court decision that ruled states’ expansion of the program optional, 25 states have chosen not to expand Medicaid to include wage earners up to 138 percent of the federal poverty line.
The Medicaid coverage gap will leave out 5 million of the 10 million who would have gained coverage, exacerbating existing racial health disparities in the United States, a focus of Thursday’s report from the equal-rights group United for a Fair Economy.
Poor blacks are 7.3 times—and poor Latinos 5.7 times—as likely as poor whites to live in high-poverty neighborhoods that aggravate health problems. That gap is because of minorities’ limited access to health services and good food, as well as the great stresses from crime and racism, according to the report.
The data also find that 29 percent of Latinos, 19 percent of blacks, 15 percent of Asians, and 11 percent of whites were uninsured in 2012.
Republican governors are leading many of the states that have declined to expand the entitlement program. The federal government has committed to paying 100 percent of the expansion for the first few years, but the governors say they fear the feds will go back on their word, leaving states with unsustainable budget costs.
Other GOP governors have declined to expand the program out of ideological objections to an expansion of the nation’s social safety net.
The report’s authors are frustrated by the blocked expansion.
“With no expanded Medicaid, and little or no assistance to purchase insurance in the health exchanges, the actions of these elected leaders in these states are creating a vast hole in the new health care law—a 25-state coverage gap—through which nearly 5 million low income Americans will now fall,” UFE writes.
“Access to health care is, first and foremost, a moral issue,” the report continues. “It’s a question of right and wrong. Tolerating vast inequalities in health and health care along the lines of race or class sends the disturbing message that we as a society value the lives of people in various groups differently.”
Despite the blocked Medicaid expansion, the Affordable Care Act diminishes the racial health gap by expanding programs to promote diversity in health professions; supports cultural competency training to help doctors communicate with patients of color; and establishes research initiatives to explore the cause of health inequality. It also allows people with preexisting conditions—more common in impoverished neighborhoods due to the quality of life—to gain access to coverage.
But some people who do not have health insurance will continue to live without it. Others will be ineligible because of their immigration status. Still others won’t qualify because of their employment situation. Blacks and Latinos are more likely to work in lower-wage or part-time jobs where they are less likely to receive employer-sponsored coverage.
In addition to the lack of insurance and access to affordable health services, residential segregation and the stress of living in poverty are primary factors contributing to poor health in the black and Latino communities. Those types of communities are commonly found in “food deserts,” or areas of the country where people have little access to a grocery store with fresh produce and instead are surrounded by fast food joints. The report says that half of black neighborhoods lack a full-service grocery.
Among UFE’s recommendations to permanently close the racial health gap are the continued pursuit of a single-payer, universal health insurance system, where employment and work situations would no longer play a role in access, quality, and cost of care. They also, of course, hope to see all 50 states expand Medicaid and take the lead on fully implementing and supporting the Affordable Care Act.
They also propose increasing funding to permanently fund Medicaid at the federal level, heighten funding for outreach and education efforts, and allow undocumented immigrants to take part in the system. More systemic policies—more diverse housing, improved access to services in areas of extreme poverty, raising the minimum wage—would also help address the disparity between the races in overall population health.
By: Clara Ritger, The National Journal, January 16, 2014
“The Undeserving Rich”: Capitalism As Currently Constituted Is Undermining The Foundations Of Middle-Class Society
The reality of rising American inequality is stark. Since the late 1970s real wages for the bottom half of the work force have stagnated or fallen, while the incomes of the top 1 percent have nearly quadrupled (and the incomes of the top 0.1 percent have risen even more). While we can and should have a serious debate about what to do about this situation, the simple fact — American capitalism as currently constituted is undermining the foundations of middle-class society — shouldn’t be up for argument.
But it is, of course. Partly this reflects Upton Sinclair’s famous dictum: It is difficult to get a man to understand something when his salary depends on his not understanding it. But it also, I think, reflects distaste for the implications of the numbers, which seem almost like an open invitation to class warfare — or, if you prefer, a demonstration that class warfare is already underway, with the plutocrats on offense.
The result has been a determined campaign of statistical obfuscation. At its cruder end this campaign comes close to outright falsification; at its more sophisticated end it involves using fancy footwork to propagate what I think of as the myth of the deserving rich.
For an example of de facto falsification, one need look no further than a recent column by Bret Stephens of The Wall Street Journal, which first accused President Obama (wrongly) of making a factual error, then proceeded to assert that rising inequality was no big deal, because everyone has been making big gains. Why, incomes for the bottom fifth of the U.S. population have risen 186 percent since 1979!
If this sounds wrong to you, it should: that’s a nominal number, not corrected for inflation. You can find the inflation-corrected number in the same Census Bureau table; it shows incomes for the bottom fifth actually falling. Oh, and for the record, at the time of writing this elementary error had not been corrected on The Journal’s website.
O.K., that’s what crude obfuscation looks like. What about the fancier version?
I’ve noted before that conservatives seem fixated on the notion that poverty is basically the result of character problems among the poor. This may once have had a grain of truth to it, but for the past three decades and more the main obstacle facing the poor has been the lack of jobs paying decent wages. But the myth of the undeserving poor persists, and so does a counterpart myth, that of the deserving rich.
The story goes like this: America’s affluent are affluent because they made the right lifestyle choices. They got themselves good educations, they got and stayed married, and so on. Basically, affluence is a reward for adhering to the Victorian virtues.
What’s wrong with this story? Even on its own terms, it postulates opportunities that don’t exist. For example, how are children of the poor, or even the working class, supposed to get a good education in an era of declining support for and sharply rising tuition at public universities? Even social indicators like family stability are, to an important extent, economic phenomena: nothing takes a toll on family values like lack of employment opportunities.
But the main thing about this myth is that it misidentifies the winners from growing inequality. White-collar professionals, even if married to each other, are only doing O.K. The big winners are a much smaller group. The Occupy movement popularized the concept of the “1 percent,” which is a good shorthand for the rising elite, but if anything includes too many people: most of the gains of the top 1 percent have in fact gone to an even tinier elite, the top 0.1 percent.
And who are these lucky few? Mainly they’re executives of some kind, especially, although not only, in finance. You can argue about whether these people deserve to be paid so well, but one thing is clear: They didn’t get where they are simply by being prudent, clean and sober.
So how can the myth of the deserving rich be sustained? Mainly through a strategy of distortion by dilution. You almost never see apologists for inequality willing to talk about the 1 percent, let alone the really big winners. Instead, they talk about the top 20 percent, or at best the top 5 percent. These may sound like innocent choices, but they’re not, because they involve lumping in married lawyers with the wolves of Wall Street. The DiCaprio movie of that name, by the way, is wildly popular with finance types, who cheer on the title character — another clue to the realities of our new Gilded Age.
Again, I know that these realities make some people, not all of them hired guns for the plutocracy, uncomfortable, and they’d prefer to paint a different picture. But even if the facts have a well-known populist bias, they’re still the facts — and they must be faced.
By: Paul Krugman, Op-Ed Columnist, The New York Times, January 19, 2014
“Worsening Inequality”: 900 Rich People Won’t Pay Into Social Security For The Rest Of The Year
While almost all working Americans will pay into Social Security through their paychecks throughout the year, the 900 wealthiest people in the country won’t. That’s because the highest-earning 0.0001 percent of the U.S. — many of them corporate CEOs — made $117,000 in the first two days of the year, which is the maximum annual income that is subject to Social Security taxes under federal law.
It’s tough to say for certain who will be a part of this group in 2014, since the most recent available data on Americans’ earnings is from 2012. In that year, 894 individuals nationwide made enough to qualify for membership in this club, according to the Los Angeles Times. Economist Teresa Ghilarducci came up with the calculation, and points out that Forbes data on top earners enables analysts and the public to see some of the members of this group. There were nearly 70 corporate CEOs who made enough to qualify in 2012, including the top officers at companies like Philip Morris, NewsCorp, Starbucks, ComCast, and Pfizer.
They get to live the year free from Social Security taxes because the law says that only the first $117,000 earned in a year can be taxed to fund the retirement program that kept more than 15 million people out of poverty in 2011. Democrats have pushed to raise the cap in recent years from $106,800 in 2009 to the current level. Eliminating the cap entirely could make the program solvent for the next 75 years without cutting a dime from anyone’s benefits — and doing so wouldn’t touch the earnings of 94.2 percent of all American workers.
Despite that option, most of the debates around Social Security in recent years have focused on cutting the program rather than increasing its revenue stream. Yet Americans are facing a retirement crisis. Companies’ shifts from pensions to investment plans for retirees has undermined the financial security of working people while enriching the financial services industry and worsening inequality. For non-white workers who are far less likely to have access to even those paltry 401(k) plans, the picture is even bleaker. Overall more than half of all Americans are projected to see a steep drop in their standard of living upon retirement. There is a $6.6 trillion gap between what working Americans have saved and what they ought to have saved to retire well.
In the face of all of this, Sen. Elizabeth Warren (D-MA) and others have proposed increasing Social Security benefits rather than cutting them.
By: Alan Pyke, Think Progress, January 3, 2014
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