Oh!pinion weblog special feature
The increasing economic divide among Americans
Delivered on the House floor by U.S. Rep. Bernie Sanders, I-Vt,
on Oct. 21, 2003.
Mr. Speaker, the corporate media does not talk about it too much, and we do not discuss it terribly much here in the Congress, but the United States of America is rapidly on its way to becoming three separate nations: An increasingly wealthy elite, a small number of people who have incredible wealth and incredible power; a middle class, the vast majority of our people, which is shrinking, where the average person is working longer hours for lower wages; and, at the bottom we have a growing number of Americans who are living in abject poverty, barely keeping their heads above water.
Mr. Speaker, there has always been a wealthy elite in this country, that is not new, and there has always been a gap between the rich and the poor. But the disparities in wealth and income that currently exist in this country have not been seen since the 1920s.
In other words, instead of becoming a more egalitarian country, with a stronger middle class, we are becoming a Nation in which the rich have more wealth and power, the middle class is shrinking, and poverty is growing.
Mr. Speaker, today the wealthiest 1 percent own more wealth than the bottom 95 percent. One percent own more wealth than the bottom 95 percent. The CEOs of large corporations today earn more than 500 times what their employees are making. While workers are being squeezed, being forced to pay more for health insurance, while their pensions are being cut back, the CEOs of large corporations make out like bandits.
Mr. Speaker, the Nation's 13,000 wealthiest families, which constitute 1/100th of 1 percent of the population, receive almost as much income as the bottom 20 million families in the United States. One one-hundredth of 1 percent, more income than the bottom 20 million families. That, to my mind, is not what America is supposed to be.
New data from the Congressional Budget Office shows that the gap between the rich and the poor in terms of income more than doubled from 1979 to 2000. In other words, we are moving in exactly the wrong direction. The gap is such that the wealthiest 1 percent had more money to spend after taxes than the bottom 40 percent. The richest 2.8 million Americans had $950 billion after taxes, or 15.5 percent of the economic pie, while the poorest 110 million had less, 14.4 percent of all after-tax income. Once again, that is not what America is supposed to be. While the rich get richer and receive huge tax breaks from the White House, the middle class is struggling desperately, in my state of Vermont and all over this country.
It is increasingly common to see people work at not one job, but two jobs, and occasionally three jobs. When I was growing up, the expectation for the middle class was that one worker in a family could work 40 hours a week and earn enough income to pay the bills. Well, in the State of Vermont, and all over this country, it is becoming increasingly uncommon when that happens. Much more often than not, wives are forced to work alongside husbands in order to bring in the necessary income, and kids, in many instances, do not get the care that they need.
Unemployment in our country is now at a nine-year high. We are over 6 percent, and there are now over 9 million people who are unemployed. But in truth the real number is higher than that, because there are a lot of people who are working part time because they cannot find full-time jobs, and there are a lot of people who are not part of the statistics because they have given up and are not actively seeking employment.
Mr. Speaker, of the 3.3 million private-sector jobs that have been lost over the last three years, 2.7 million were in the manufacturing sector. This is an issue I want to spend a moment on because what is happening in manufacturing today is a disaster for this country and bodes very poorly for the future of our nation.
Mr. Speaker, the bottom line is -- and this Congress must finally recognize it -- our trade policies are failing. Permanent, normal trade relations with China has been a disaster. NAFTA has been a disaster. Our membership in the World Trade Organization has not worked for the middle class and working families, for this country, and the time is long overdue for the United States Congress to stand up to corporate America, to stand up to the president of the United States, to stand up to all of the editorial pages all over America who have told us, year after year after year, how great unfettered free trade would be.
They were wrong. Their policies have led to enormous economic problems for the middle class in this country. The decline of manufacturing is one of the reasons why our middle class is shrinking and why wages for middle class workers are in decline.
Many people understand the pain involved when we have lost 3 million jobs in the last few years. But we also have got to point out that our trade policies and our overall economic policies have been a disaster for the wages that American workers receive.
Today, American workers in the private sector are earning 8 percent less than they were in 1973. Now, just think for a moment. Think for a moment. In the last 30 years, there has been a revolution in technology. We all know that. We all know what computers have done, what e-mail has done, what faxes have done. We know what robotics in factories have done. In other words, we are a much more productive Nation than we used to be. Every worker is producing more.
Given that reality, why is it that the average worker in the private sector today is earning 8 percent less? That is an issue we have to put right up there on the radar screen, and we need to debate.
Mr. Speaker, manufacturing in this country is currently in a state of collapse. Let us be honest about it. In the last three years, we have lost 2.7 million manufacturing jobs, which comprise 16 percent of the total. That is right. You heard that right. In the last three years, we have lost 16 percent of our manufacturing jobs. At 14.7 million, we are at the lowest number of factory jobs since 1958.
In my own state of Vermont, my small state of Vermont, we have lost some 8,700 manufacturing jobs between January 2001 and August 2003, and the pity of that is that in Vermont, manufacturing jobs pay workers middle class wages. In Vermont, on average, a worker working in manufacturing makes over $42,000 a year. That is a decent wage. We are losing those jobs and the new jobs that we are creating are paying only a fraction of what manufacturing jobs are paying, and almost always provide much, much weaker benefits.
Mr. Speaker, in 2002 the United States had a $435 billion trade deficit -- a $435 billion trade deficit. This year, the trade deficit with China alone -- one country, China -- is expected to be $120 billion, and that number is projected to increase in future years. It has gone up and up and up. The National Association of Manufacturers estimates that if present trends continue, our trade deficit with China will grow to $330 billion in five years.
But our disastrous trade policy is not only costing us millions of decent-paying jobs; it is squeezing wages. It is squeezing wages because many employers are saying if you do not take the cuts in health care, if you do not take the cuts in wages, we are going to move to China, we are going to move to Mexico.
One of the areas where people are being most severely hurt is among young workers without a college education. For entry-level workers without a college level education, the real wages that they have received, that they are now receiving, have dropped by over 20 percent in the last 25 years. And the answer and the reason for that is quite obvious. Twenty-five years ago, 30 years ago, if somebody did not go to college, as most people did not, what they would be able to do is go out and get a job in manufacturing. And millions and millions of workers did that. And with those wages and those benefits they were able to lead a middle class existence and raise their kids with a decent standard of living. But the reality now is that the new jobs that are being created, the jobs at McDonald's and the jobs in Wal-Mart, are not paying people a living wage.
What is happening to our economy today is best illustrated by the fact that some 20 years ago our largest employer was General Motors. And workers in General Motors earned, and still earn today, a living wage. Today, Mr. Speaker, our largest private employer is Wal-Mart. And that is what has happened to the American economy. We have gone from a General Motors economy where workers earned decent wages and decent benefits to a Wal-Mart economy where people earn low wages and poor benefits. Today, Wal-Mart employees earn $8.23 per hour or $13,861 annually. And that, Mr. Speaker, is an income which is below the poverty level.
And that is what the transformation of the American economy is about -- an economy where workers used to work, produced real products, made middle class wages, had good benefits, to a Wal-Mart economy where our largest employer now pays workers poverty wages, minimal benefits, huge turnover.
Frankly, Mr. Speaker, in hindsight it did not take a genius to predict that unfettered free trade with China would be a disaster, which is why I and many other Members in the House have opposed it from the beginning. With educated, hard-working Chinese workers available at 40 or 50 cents an hour, and with corporations having the capability of bringing their Chinese-made products back into this country tariff-free, why would American multinational corporations not shut down their plants in this country and move to China? It did not take a genius, frankly, to think that that would happen.
Should anyone be surprised that Motorola eliminated 42,900 American jobs in 2001 and invested $3.4 billion in China or that IBM has signed deals to train 100,000 software specialists in China over 3 years? Who is shocked that General Electric has thrown tens of thousands of American workers out on the streets while investing $1.5 billion in China.
Honeywell is a sophisticated corporation. Should anybody be really surprised that they have built 13 factories in China or that Ethan Allen furniture has cut jobs at three sawmills and 17 U.S. manufacturing plants, including some in my state of Vermont, as they import more medium-priced furniture from China into the United States? Nobody should be surprised at these developments.
China, for American multinational corporations, is a great place to do business, if by ``doing business'' we mean making products for export to the United States that companies previously made here. Not only are wages extremely low in China, but if workers attempt to stand up for their rights in China and form unions, those workers go to jail. Now, what a great place to do business, where when workers try to organize, they go to jail. What more could a company ask for?
In China today, environmental regulations are almost nonexistent. And while China becomes one of the most polluted countries on Earth, companies that invest in China, they do not have to ``waste money on environmental safeguards.'' In our country we said many years ago to companies you just cannot willy-nilly throw your garbage into our lakes and into our streams. You cannot pollute the air any way you want. You have got to have some environmental safeguards. Those safeguards are expensive. But in China, no problem; you can do whatever you want. Great place to do business.
Mr. Speaker, over the years advocates of unfettered free trade have tried to gloss over the bad news about the decline in factory employment by promising that a new economy was in the making. A new economy was in the making, one in which Americans would be working at good wages in the high-tech field. We have all heard it. Hey, you do not have to worry about them factory jobs anymore. We are the United States of America. We all have new, clean, high-tech computer jobs. All of our young people will go out there, make $50,000, $60,000, $70,000 a year. That is the future for the United States. That is what they told us.
Delivered on the House floor by U.S. Rep. Bernie Sanders, I-Vt,
on Oct. 21, 2003.
Mr. Speaker, the corporate media does not talk about it too much, and we do not discuss it terribly much here in the Congress, but the United States of America is rapidly on its way to becoming three separate nations: An increasingly wealthy elite, a small number of people who have incredible wealth and incredible power; a middle class, the vast majority of our people, which is shrinking, where the average person is working longer hours for lower wages; and, at the bottom we have a growing number of Americans who are living in abject poverty, barely keeping their heads above water.
Mr. Speaker, there has always been a wealthy elite in this country, that is not new, and there has always been a gap between the rich and the poor. But the disparities in wealth and income that currently exist in this country have not been seen since the 1920s.
In other words, instead of becoming a more egalitarian country, with a stronger middle class, we are becoming a Nation in which the rich have more wealth and power, the middle class is shrinking, and poverty is growing.
Mr. Speaker, today the wealthiest 1 percent own more wealth than the bottom 95 percent. One percent own more wealth than the bottom 95 percent. The CEOs of large corporations today earn more than 500 times what their employees are making. While workers are being squeezed, being forced to pay more for health insurance, while their pensions are being cut back, the CEOs of large corporations make out like bandits.
Mr. Speaker, the Nation's 13,000 wealthiest families, which constitute 1/100th of 1 percent of the population, receive almost as much income as the bottom 20 million families in the United States. One one-hundredth of 1 percent, more income than the bottom 20 million families. That, to my mind, is not what America is supposed to be.
New data from the Congressional Budget Office shows that the gap between the rich and the poor in terms of income more than doubled from 1979 to 2000. In other words, we are moving in exactly the wrong direction. The gap is such that the wealthiest 1 percent had more money to spend after taxes than the bottom 40 percent. The richest 2.8 million Americans had $950 billion after taxes, or 15.5 percent of the economic pie, while the poorest 110 million had less, 14.4 percent of all after-tax income. Once again, that is not what America is supposed to be. While the rich get richer and receive huge tax breaks from the White House, the middle class is struggling desperately, in my state of Vermont and all over this country.
It is increasingly common to see people work at not one job, but two jobs, and occasionally three jobs. When I was growing up, the expectation for the middle class was that one worker in a family could work 40 hours a week and earn enough income to pay the bills. Well, in the State of Vermont, and all over this country, it is becoming increasingly uncommon when that happens. Much more often than not, wives are forced to work alongside husbands in order to bring in the necessary income, and kids, in many instances, do not get the care that they need.
Unemployment in our country is now at a nine-year high. We are over 6 percent, and there are now over 9 million people who are unemployed. But in truth the real number is higher than that, because there are a lot of people who are working part time because they cannot find full-time jobs, and there are a lot of people who are not part of the statistics because they have given up and are not actively seeking employment.
Mr. Speaker, of the 3.3 million private-sector jobs that have been lost over the last three years, 2.7 million were in the manufacturing sector. This is an issue I want to spend a moment on because what is happening in manufacturing today is a disaster for this country and bodes very poorly for the future of our nation.
Mr. Speaker, the bottom line is -- and this Congress must finally recognize it -- our trade policies are failing. Permanent, normal trade relations with China has been a disaster. NAFTA has been a disaster. Our membership in the World Trade Organization has not worked for the middle class and working families, for this country, and the time is long overdue for the United States Congress to stand up to corporate America, to stand up to the president of the United States, to stand up to all of the editorial pages all over America who have told us, year after year after year, how great unfettered free trade would be.
They were wrong. Their policies have led to enormous economic problems for the middle class in this country. The decline of manufacturing is one of the reasons why our middle class is shrinking and why wages for middle class workers are in decline.
Many people understand the pain involved when we have lost 3 million jobs in the last few years. But we also have got to point out that our trade policies and our overall economic policies have been a disaster for the wages that American workers receive.
Today, American workers in the private sector are earning 8 percent less than they were in 1973. Now, just think for a moment. Think for a moment. In the last 30 years, there has been a revolution in technology. We all know that. We all know what computers have done, what e-mail has done, what faxes have done. We know what robotics in factories have done. In other words, we are a much more productive Nation than we used to be. Every worker is producing more.
Given that reality, why is it that the average worker in the private sector today is earning 8 percent less? That is an issue we have to put right up there on the radar screen, and we need to debate.
Mr. Speaker, manufacturing in this country is currently in a state of collapse. Let us be honest about it. In the last three years, we have lost 2.7 million manufacturing jobs, which comprise 16 percent of the total. That is right. You heard that right. In the last three years, we have lost 16 percent of our manufacturing jobs. At 14.7 million, we are at the lowest number of factory jobs since 1958.
In my own state of Vermont, my small state of Vermont, we have lost some 8,700 manufacturing jobs between January 2001 and August 2003, and the pity of that is that in Vermont, manufacturing jobs pay workers middle class wages. In Vermont, on average, a worker working in manufacturing makes over $42,000 a year. That is a decent wage. We are losing those jobs and the new jobs that we are creating are paying only a fraction of what manufacturing jobs are paying, and almost always provide much, much weaker benefits.
Mr. Speaker, in 2002 the United States had a $435 billion trade deficit -- a $435 billion trade deficit. This year, the trade deficit with China alone -- one country, China -- is expected to be $120 billion, and that number is projected to increase in future years. It has gone up and up and up. The National Association of Manufacturers estimates that if present trends continue, our trade deficit with China will grow to $330 billion in five years.
But our disastrous trade policy is not only costing us millions of decent-paying jobs; it is squeezing wages. It is squeezing wages because many employers are saying if you do not take the cuts in health care, if you do not take the cuts in wages, we are going to move to China, we are going to move to Mexico.
One of the areas where people are being most severely hurt is among young workers without a college education. For entry-level workers without a college level education, the real wages that they have received, that they are now receiving, have dropped by over 20 percent in the last 25 years. And the answer and the reason for that is quite obvious. Twenty-five years ago, 30 years ago, if somebody did not go to college, as most people did not, what they would be able to do is go out and get a job in manufacturing. And millions and millions of workers did that. And with those wages and those benefits they were able to lead a middle class existence and raise their kids with a decent standard of living. But the reality now is that the new jobs that are being created, the jobs at McDonald's and the jobs in Wal-Mart, are not paying people a living wage.
What is happening to our economy today is best illustrated by the fact that some 20 years ago our largest employer was General Motors. And workers in General Motors earned, and still earn today, a living wage. Today, Mr. Speaker, our largest private employer is Wal-Mart. And that is what has happened to the American economy. We have gone from a General Motors economy where workers earned decent wages and decent benefits to a Wal-Mart economy where people earn low wages and poor benefits. Today, Wal-Mart employees earn $8.23 per hour or $13,861 annually. And that, Mr. Speaker, is an income which is below the poverty level.
And that is what the transformation of the American economy is about -- an economy where workers used to work, produced real products, made middle class wages, had good benefits, to a Wal-Mart economy where our largest employer now pays workers poverty wages, minimal benefits, huge turnover.
Frankly, Mr. Speaker, in hindsight it did not take a genius to predict that unfettered free trade with China would be a disaster, which is why I and many other Members in the House have opposed it from the beginning. With educated, hard-working Chinese workers available at 40 or 50 cents an hour, and with corporations having the capability of bringing their Chinese-made products back into this country tariff-free, why would American multinational corporations not shut down their plants in this country and move to China? It did not take a genius, frankly, to think that that would happen.
Should anyone be surprised that Motorola eliminated 42,900 American jobs in 2001 and invested $3.4 billion in China or that IBM has signed deals to train 100,000 software specialists in China over 3 years? Who is shocked that General Electric has thrown tens of thousands of American workers out on the streets while investing $1.5 billion in China.
Honeywell is a sophisticated corporation. Should anybody be really surprised that they have built 13 factories in China or that Ethan Allen furniture has cut jobs at three sawmills and 17 U.S. manufacturing plants, including some in my state of Vermont, as they import more medium-priced furniture from China into the United States? Nobody should be surprised at these developments.
China, for American multinational corporations, is a great place to do business, if by ``doing business'' we mean making products for export to the United States that companies previously made here. Not only are wages extremely low in China, but if workers attempt to stand up for their rights in China and form unions, those workers go to jail. Now, what a great place to do business, where when workers try to organize, they go to jail. What more could a company ask for?
In China today, environmental regulations are almost nonexistent. And while China becomes one of the most polluted countries on Earth, companies that invest in China, they do not have to ``waste money on environmental safeguards.'' In our country we said many years ago to companies you just cannot willy-nilly throw your garbage into our lakes and into our streams. You cannot pollute the air any way you want. You have got to have some environmental safeguards. Those safeguards are expensive. But in China, no problem; you can do whatever you want. Great place to do business.
Mr. Speaker, over the years advocates of unfettered free trade have tried to gloss over the bad news about the decline in factory employment by promising that a new economy was in the making. A new economy was in the making, one in which Americans would be working at good wages in the high-tech field. We have all heard it. Hey, you do not have to worry about them factory jobs anymore. We are the United States of America. We all have new, clean, high-tech computer jobs. All of our young people will go out there, make $50,000, $60,000, $70,000 a year. That is the future for the United States. That is what they told us.