The High Public Cost of Low Wages
According to a study by Ken Jacobs, Ian Perry, and Jenifer MacGillvary at the Labor Center of the University of California, Berkeley, $152.8 billion dollars of the $550 billion dollars spent every year in this country on poverty (27.8%) goes to public support for working families.
The real, hourly median (fifty percent of the American workers made more, fifty percent made less, after inflation has been factored in to keep dollar values constant) wages of the American worker were only five percent higher in 2013 than they were in 1979. However, the bottom ten percent of our population had wages that were five percent lower in 2013 than they were in 1979. Sixty-one percent of all Medicaid (excluding blind, aged or disabled individuals), 32% of all TANF (Temporary Aid to Needy Families), 74% of all EITC (Earned Income Tax Credit), and 36% of all SNAP (Supplemental Nutrition Assistance Program) beneficiaries, belonged to families or individuals who worked in 2013.
So, in spite of what many people believe, most of the reasons given by conservative commentators about the causes of poverty are at best myths, and at worst, outright lies. But as Dr. Josef Goebbels pointed out eighty years ago, a lie, told often enough, with sufficient emphasis, becomes the truth in the minds of those who hear it, and lack the time or the means to check its veracity. For more on the lies that the wealthy and their lapdogs have told America concerning the poor, please check out Professor Jeff Nall's 26 October 2012 Truthout article, "Lies of the Plutocracy: Exploding Five Myths That Dehumanize the Poor," Or read Barbara Ehrenreich's 2003 book, Nickle and Dimed: On (Not) Getting by in America. Ehrenreich spent a year trying to live as one of America's poor, and found how impossible it is to do it.
Today, the top 20 percent of our population makes about 60% of our nation's adjusted gross income (AGI). In 1980, the top twenty percent made only 50% of our nation's AGI. So if someone tries to justify the current income inequality with (as one person I know tried to with me) "Well the top twenty percent produce sixty percent of our retail sales," tell them that they had better: they make sixty percent of the money. The bottom 49 percent of our population have lost 36.1 percent of their share of the nation's AGI between 1980 and 2000, going from 17.68% to 12.99%, while their total federal tax bill decreased by only 25%. So the bottom 49 percent has effectively lost 11.1 of their income to increased taxes and government fees in that twenty year period. And nothing has changed in the last fifteen years.
The majority of the subsidies and "welfare" do not go to the poor ($550 billion per year), but to corporations ($1.2 trillion per year), and the wealthiest Americans (at least $1.6 trillion per year) in deferred taxes from salaries taken as stock options, and money rolled over from capital gains. Thus, our largest corporations and wealthiest citizens cost our government--and us--more than five times what our poor do in terms of lost taxes and government subsidies.
It is no wonder that we have seen the vast shift in wealth from the poor, working and middle classes over the last thirty-five years, and the poor, working and middle classes are losing hope of a better life. The rich should be warned: when the masses run out of hope, is when they run for their guns, and revolution sweeps the ground clean.
As President Kennedy pointed out in his Inaugural address, "If a free society cannot help the many who are poor, it cannot save the few who are rich."
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