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The Tally Ho

Monday, September 06, 2004

Late, Great Middle Class

Late, Great Middle Class is an op-ed by John Podesta and David Sirota. It appeared in the LA Times today. They write
Since his inauguration, the president has delivered more than 1,000 major addresses, news conferences and short public remarks. Yet he has uttered the phrase "middle class" in only 34 of them. On Thursday night at the convention, he kept the pattern going — the phrase never passed his lips.

Maybe it's just an oversight, but in such a highly scripted White House, is anything left to chance? Omitting references to America's most critical demographic is surely no accident — it's evidence of a tectonic shift in philosophy. No longer part of a bipartisan consensus that government should work to expand opportunity for ordinary Americans, conservatives are instead eliminating those opportunities. Bush's words — or lack thereof — simply punctuate the effort.

Consider, for example, decent wages. The gateway to the middle class is considered to be a salary of about $35,000 a year. Yet the Bush administration has refused to support a serious increase in the minimum wage, which at $5.15 an hour provides a salary of less than $12,000 a year — well below the poverty line. At the same time, the White House has worked to strip workers of federal overtime pay protections, and in budget after budget it has tried to cut billions out of job training programs.

Access to adequate healthcare is another marker of middle-class status. And yet the White House is making it harder to get that care. The president's health savings accounts, which would put money into the consumers' hands, also would allow employers to contribute less to workers' coverage. In other words, annual health insurance deductibles probably would go up. And then there's last year's Medicare reform. According to the Wall Street Journal, the administration included a little- noticed provision in the legislation that allows companies to continue receiving tax breaks even if they severely reduce workers' healthcare coverage.

On prescription drugs, it's a similar story. As prices skyrocket, the president's Medicare bill all but ensured hundreds of billions in profits for the pharmaceutical industry without providing truly comprehensive drug coverage to seniors. The bill did nothing to prevent drug companies from charging Americans the highest prices in the world. When lawmakers tried to give Medicare the power to negotiate discounts, they were blocked by White House allies. And the administration continues to oppose letting Americans purchase lower-priced, FDA-approved medicines from abroad.

Jen from Good Intentions posted a piece from the AJC titled Tell the $5.15 hourly wage its time is up.
This is a troubled period for average American workers. Many find themselves worse off than they were one year ago.

Their hourly wages have shrunk 1 percent — their weekly paychecks 0.7 percent — after inflation. It means that even with raises, workers haven't been able to keep up with the higher cost of gasoline, food, housing and health care.

Those whose pay is tied to the minimum wage are sinking even faster. Minimum-wage employees have not had a raise since Labor Day 1997, when their hourly rate rose to $5.15. Today, they would need to make $6.08 an hour just to stay even with where they were seven years ago.

Sen. Edward Kennedy (D-Mass.) summed it up this summer, as he sought support for a three-step increase that would top out at $7 an hour in 2006: "A fair increase in the minimum wage is long overdue."

He argued that a family of three can't make it on $5.15 an hour, or $10,700 a year. That's almost $5,000 below the government's poverty level for that family, Kennedy pointed out.

The federal wage standard is so far behind the times that a dozen states and Washington, D.C., have felt compelled to enact higher levels, ranging from $5.50 an hour in Illinois to $7.16 in Washington state. Florida and Nevada voters will consider boosts to $6.15 an hour in November.

Kennedy would increase the minimum wage to a modest $5.85, effective this year, to $6.45 in 2005 and then to $7 a year later. His proposal would give a much-needed raise to almost 10 million hourly workers, according to the Economic Policy Institute, a Washington organization that provides "research and ideas for working people."

On the Republican side, published reports have Senate Majority Whip Mitch McConnell (R-Ky.) preparing legislation with an increase in the minimum wage to $6.25 an hour. His office won't confirm whether McConnell will introduce legislation to do so.

The failure of Congress to act on the minimum wage is all the harder to understand because business profits are soaring. They jumped 17 percent to more than a $1 trillion, pre-tax, last year, and they continue to climb this year.

The added expense to business from Kennedy's proposal would be a fraction of profits. The Congressional Budget Office has estimated the raises would cost $1.3 billion in fiscal 2005, $3.6 billion the following year and $6.1 billion in fiscal 2006.


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