Economy Booming for Billionaires, a Bust for Most
by Holly Sklar
A record 400 Americans are billionaires -- and a record 47 million Americans have no health insurance, while 37 million people live below the official poverty line.
Millionaires are so last millennium. The new Forbes 400 list of the richest Americans includes billionaires only. If your net worth is a mere $999 million, forget it. A billion means a thousand million, and that's the Forbes 400 minimum -- up from $900 million in 2005.
Donald Trump and two of his kids grace the Forbes 400 cover, but ranked at No. 94 with $2.9 billion, Trump is a long way from No. 1 Bill Gates with $53 billion.
The combined wealth of the 400 richest Americans is a record-breaking $1.25 trillion. That's about the same as the combined wealth held by the 57 million households who make up half the U.S. population.
The economy is booming for billionaires. It's a bust for many other Americans.
A record 400 Americans are billionaires -- and a record 47 million Americans have no health insurance. America has 400 billionaires -- and 37 million people below the official poverty line.
The official poverty line for one person was just $9,973 in 2005 (latest data). That wouldn't cover the custom-made men's shoes ($4,128) and Hermes purse ($6,250) on the Forbes Cost of Living Extremely Well Index. The official poverty line of $15,577 for a three-person family is lower than the cost of the Patek Philippe men's gold watch ($17,600).
The Forbes 400 minimum is up $100 million since 2005, but the federal minimum wage has been stuck at $5.15 an hour -- just $10,712 a year -- since 1997. GOP leaders in Congress have been holding a raise for minimum-wage workers hostage to giant tax cuts for wealthy inheritors.
Wealth isn't trickling down. It's flooding up -- from workers to bosses, small investors to big, poorer to richer.
The heirs to Wal-Mart founders Sam and Bud Walton have a combined $82.5 billion \- while the children of Wal-Mart workers swell the ranks of state health insurance programs for the neediest.
In today's corporate America, workers see gutted paychecks and pensions despite rising worker productivity, while CEOs get golden pay, perks, pensions and parachutes. The pay gap between average workers and CEOs has grown nine times wider since the 1970s. The number of billionaires is now at a record high, but the share of national income going to wages and salaries is at a record low.
U.S. corporate profits increased 21 percent in the past year, Market Watch reported in March. "Profits have been so high because almost all of the benefits from productivity improvements are flowing to the owners of capital rather than to the workers," said Market Watch.
The wealthiest 1 percent of Americans (minimum net worth $6 million) owned 62 percent of the nation's business assets, 51 percent of stocks and 70 percent of bonds as of 2004, according to the latest data from the Federal Reserve Survey of Consumer Finances -- which excludes the Forbes 400. That's way up from 1989, when the wealthiest 1 percent owned 54 percent of business assets, 41 percent of stocks and 52 percent of bonds.
Our growing economy is not producing a growing middle class, but a richer aristocracy.
The high point for median household income was $47,671 in 1999, adjusted for inflation. In 2005, median household income was $1,345 less, at $46,326. In the same period, the Forbes 400 gained more than 100 billionaires.Government policies are fueling rising inequality. Taxpayers with incomes above $1 million will see their after-tax income grow by about 6 percent this year thanks to tax cuts the nation can't afford.
In an economy where money is flowing up to the very top, even college-educated workers are going backward. Inflation-adjusted median household income was lower in 2005 than 1999, even when the householder had a bachelor's degree, master's degree, professional degree or doctorate.
The problem is much bigger than the rich getting richer, while the poor get poorer. The really rich are getting richer at the expense of most everyone else.
Solutions include restoring the link between rising worker productivity and pay, raising the miserly minimum wage, narrowing the obscene pay gap between workers and CEOs, rolling back tax cuts for the wealthy -- and stopping the taxation of income from work more than income from capital gains.
Holly Sklar is co-author of A Just Minimum Wage: Good for Workers, Business and Our Future (www.letjusticeroll.org) and Raise the Floor: Wages and Policies That Work for All of Us. She can be reached at hsklar@aol.com.
NLRB Ruling Undermines Economic Security for Workers
by Janis D. Shields, American Friends Service Committee
PHILADELPHIA -- The American Friends Service Committee (AFSC), a Quaker organization with a long history of supporting labor rights, deplores the recent ruling by the National Labor Relations Board (NLRB) which will deny union protection to millions of American workers.
In its October 3 decision in the Oakwood Healthcare, Inc. case, the NLRB allows employers to reclassify many workers as "supervisors," thus denying them the right to be represented by unions. More than eight million workers and over 200 occupations could be affected, according to the Economic Policy Institute.
"This ruling represents a serious effort to undermine economic security for American workers," said Joyce Miller, AFSC assistant general secretary for justice and human rights. "Fair wages and the right to form and join a union are keys to achieving that security."
In their dissent regarding the Oakwood case, two NLRB members warned: "Today's decision threatens to create a new class of workers under Federal labor law: workers who have neither the genuine prerogatives of management, nor the statutory rights of ordinary employees. In that category may fall most professionals (among many other workers) who by 2012 could number almost 34 million, accounting for 23.3 percent of the workforce."
The AFSC has a long history of supporting justice for coal miners, farmworkers, maquila workers and others, dating to the 1920s. AFSC has recently partnered with workers' organizations to promote just federal budget priorities and to oppose the privatization of Social Security.
AFSC is a cofounder of the Let Justice Roll Living Wage Campaign, a growing faith/labor/community coalition which held hundreds of rallies, religious services and prayer breakfasts in October to build support for raising the minimum wage.
According to Rick Wilson, director of the AFSC West Virginia Economic Justice Project, "The labor movement has been vital to the preservation and extension of democracy to millions of workers. Attacking the right to organize not only harms those who are poor, it strikes a blow at middle-class Americans in a time of growing inequality."
Wilson noted that union members generally enjoy higher wages (28.1 percent) and total compensation (43.7 percent) than non-union workers. They are more likely to be covered by health insurance and pensions and to have paid vacations.
According to the AFL-CIO, under the Bush administration the NLRB has chipped away at workers' rights, limiting the eligibility of disabled workers, teaching assistants, temporary workers and others to join unions.
"One of the key concerns of the American Friends Service Committee is the need to promote human rights and dignity in the context of the global economy," noted Joyce Miller. "This can't be done in the United States or anywhere without a free labor movement."
For more information on the Living Wage campaign, visit www.letjusticeroll.org.
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