Tom Tomorrow |
January’s increase in hiring is good news, but it
masks a bigger and more disturbing story – the continuing downward
mobility of the American middle class.
Most of the new jobs being created are in the
lower-wage sectors of the economy – hospital orderlies and nursing
aides, secretaries and temporary workers, retail and restaurant.
Meanwhile, millions of Americans remain working only because they’ve
agreed to cuts in wages and benefits. Others are settling for jobs that
pay less than the jobs they’ve lost. Entry-level manufacturing jobs are
paying half what entry-level manufacturing jobs paid six years ago.
Other people are falling out of the middle class
because they’ve lost their jobs, and many have also lost their homes.
Almost one in three families with a mortgage is now underwater, holding
their breath against imminent foreclosure.
The percent of Americans in poverty is its highest
in two decades, and more of us are impoverished than at any time in the
last fifty years. A recent analysis of federal data by the New York
Times showed the number of children receiving subsidized lunches rose to
21 million in the last school year, up from 18 million in 2006-2007.
Nearly a dozen states experienced increases of 25 percent or more. Under
federal rules, children from families with incomes up to 130 percent of
the poverty line, $29,055 for a family of four, are eligible.
Experts say the bad economy is the main factor
driving the increase. According to an analysis of census data by the
Center for Labor Market Studies at Northeastern University, 37 percent
of young families with children were in poverty in 2010. It’s likely
that rate has worsened.
Mitt Romney says he’s not concerned about the very poor because they have safety nets to protect them. He says he’s concerned about the middle class. Romney doesn’t seem to realize how much of the middle class is becoming poor.
But Romney doesn’t like safety nets to begin with.
He’s been accusing President Obama of inviting a culture of dependency.
“Over the past three years Barack Obama has been replacing our
merit-based society with an entitlement society,” he says over and over,
arguing that our economic problems stem from a sharp rise in
dependency. Get rid of these benefits and people will work harder.
He and other Republicans point to government data
showing that direct payments to individuals have shot up by almost $600
billion since 2009, a 32 percent increase. And 49 percent
of Americans now live in homes where at least one person is collecting a
federal benefit such as food stamps or unemployment insurance, up from
44 percent in 2008.
But Romney and other Republicans have cause and effect backwards. The reason for the rise in benefits is Americans got clobbered in 2008 and many are still sinking. They and their families need whatever help they can get.
The real scandal, as I’ve said before, is America’s safety nets are too small and shot through with holes. Only 40 percent of the unemployed qualify for unemployment benefits, for example, because they weren’t working full time or long enough on a single job before they were let go. The unemployment system doesn’t recognize how many Americans work part time on several jobs, and move from job to job.
And even those who are lucky enough to be
collecting employment benefits are about to lose them. A record and
growing percent of the unemployed have been jobless for six months or
more, and Republicans in Congress are unwilling to extend their
benefits.
Romney’s budget proposals would shred safety nets
even more. According to an analysis by the Center on Budget and Policy
Priorities, his plan would throw 10 million low-income people off the
benefit rolls for food stamps or cut benefits by thousands of dollars a
year, or some combination. “These cuts would primarily affect very
low-income families with children, seniors and people with
disabilities,” the Center concludes.
At the same time, Romney’s tax plan would boost the incomes of America’s most wealthy citizens, who are already taking home an almost unprecedented share of that nation’s total income. Romney wants to permanently extend George W. Bush’s tax cuts, reduce corporate income tax rates, and eliminate the estate tax. These tax cuts would increase the incomes of people earning more than a million dollars a year by an average of $295,874 annually, according to the nonpartisan Tax Policy Center.
By reducing government revenues, Romney’s tax cuts
would squeeze programs for the poor even further. Extending the Bush tax
cuts will add $1.2 trillion to the nation’s budget deficit in just two
years. That’s the same as the amount that’s supposed to be saved by
automatic spending cuts scheduled to start next year – which, by the
way, will hit the poor especially hard.
Oh, I almost forgot. Romney and other Republicans
also want to repeal of Obama’s health care law, thereby leaving 30
million Americans without health insurance.
The downward mobility of America’s middle class is
the big news, but the GOP apparently hasn’t heard about it. Maybe it’s
too hard to hear about from that far away – and Mitt Romney is certainly
far away. His unearned income last year was more than $20 million.
That’s about as much as the combined earnings of a thousand American
families at or just above the poverty line.
Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He writes a blog at www.robertreich.org. His most recent book is Aftershock.
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