Galvanize America


Galvanize America 

Richard Mauro, 1/9/17, originally posted 3/20/17, revised 6/1/17. www.GalvanizeAmerica.com  Please share with all who may have an interest.

A dark haze has descended upon America’s working and middle classes due to a destructive combination of economic and political factors. For the last several decades, Americans have experienced stagnation in their wages1 and a decline in their standard of living. This downturn has not been unavoidable or by accident - far from it. It has been as a direct result of policies pushed by Republicans in an unrelenting manner such as killing minimum wages increases, and pushing “right-to-work” legislation (should be known as “right-to-work for less” laws). These subpar wages have had a profound negative affect on working and middle class Americans. Forty-three million Americans (including 14.5 million children) now live in poverty2 despite many holding full-time jobs. The chronic strain of attempting to make ends meet in near impossible circumstances and individuals and families doing without many basic essentials takes a heavy personal toll. The drop-out rate3, rates of stress, depression, and many physical ailments4, and the crime rate5 all rise along with increases in the poverty rate. Lastly, economic despair results in a loss of hope for the future and general degradation of the quality of life. Poor wages do not diminish only individuals and families however. Impacts to our nation’s budget deficit and general financial solvency are also profound. Substandard wages result in a necessary dependency of many Americans on public safety net programs such as food stamps, public housing, etc. Conversely, workers earning low wages rightfully pay less in many taxes. This combination of greater expenditures for needed social programs and less tax revenue strains government budgets, increases deficits, and threatens our country’s ability to fund other highly important functions such as national defense and upkeep and upgrading of our nation’s infrastructure. Finally, poor wages place an onerous drag on the economy. It is impossible for a consumer driven economy to function well if the consumers have no or little money. We see the impact of this in the sluggish growth the U.S. economy has for the most part experienced since the assault on working and middle class incomes began about 20 years ago. The reason for wage declines in America during the last two decades is not because the money is simply not available to pay employees. It is because businesses, which in fact have been enjoying record profits in recent years, are continually paying employees a smaller percentage of the revenue they generate. In other words, though American workers on average have been continually making their bosses wealthier, their bosses have responded by continually giving them less.

A second important factor harming the fortunes and hopes of working and middle class Americans is the ridiculous cost of higher education. A young person in our country, pursuing a dream and a career by earning a bachelor’s degree at a public university, can now expect to graduate with student loan debt that averages $30,1006. The cost of secondary education at our nation’s public universities has increased a nearly unimaginable 110% since 1994, despite the overall inflation rate during this time being only about 42%7. This financial burden takes a heavy toll on individuals, our economy and our country. Recent graduates, saddled with this debt and facing the aforementioned lower wage jobs in the current economy, have little money to spend on life’s necessities or important milestones. Plans for marriage, to purchase first homes, new cars, etc., are often delayed as many young people in what has become an unfortunate cliché for this generation, cannot afford to move out of their parents homes. Recent college graduates were once prime drivers of our economy. Flush with optimism and pocket money before taking on the budget constraints of family life, businesses targeted the abundance of disposable income among new professionals in their advertising. Of course the financial ability of this class of individuals to drive the economy in a similar manner today is much diminished. The excessive cost of secondary education dissuades many people from pursuing it in the first place. This of course is the exact opposite response that is desired for our nation as the economy of the future will demand more professional and highly trained technical employees, not less. It is encouraging that the Democratic party in recent years has acknowledged the magnitude of this problem and is proposing measures that can help. The Republican Party, not surprisingly, is basically ignoring the situation as it does not impact the wealthy to near the same extent.

Affordable healthcare is a prime concern to virtually all working Americans. We as a nation pay on average more than twice as much for medical care and are ranked lower in our health care system than other developed countries8. Our life expectancy numbers are not so admirable either9, and our infant mortality rate is horrible ranking last among industrialized nations10. Not coincidentally we are one of the few developed nations utilizing private insurance companies as our primary method of delivery and payment for healthcare services. Between 1990 and 2013 alone, healthcare costs in our country increased nearly four times11 while the general inflation rate during this time did not even double12. Incidentally, a significant portion of the cost of medical care in this country goes to insurance companies who provide virtually no direct medical procedures. This hyper increase in the cost of medical care of course resulted in more and more employers dropping medical coverage for their employees, and dramatically increasing deductibles, copays, and restrictions (e.g. designated providers, prior approvals, etc.) for those who were able to retain coverage through their jobs. The high cost of insurance and stringent pre-existing condition policies designed to maximize insurance company profits left many who did not receive coverage through their employment unable to procure health insurance. As the pool of uninsured individuals grew, medical costs grew at an even higher rate as medical providers sought to recoup expenses in treating the uninsured by charging more to the insured. Obamacare was a reasonable measure to address this situation and to provide a safety net to all Americans who for any number of reasons may find themselves in the ranks of the uninsured. And in fact, medical costs in the initial years after the Affordable Health Care Act came into effect rose at a lower average annual rate than during the preceding 13 years (since 2000)13. Obamacare has some issues, but nothing that both parties working together in good faith in the best interest of Americans couldn’t solve with a reasonable effort. But of course anything that actually benefits working and non-wealthy Americans must be opposed by the Republican Party. In this case specific reasons were an irrational dis-like of President Obama leading to obstructionism simply for the sake of obstructionism, and a general contempt for the real needs of middle class and lower income Americans. As most are aware, the Republican controlled House of Representatives has recently passed a so called “healthcare” bill that is basically a moral insult to working class, middle class, and other nonwealthy Americans. It would throw 23 million of us off health insurance by 2026, cut Medicaid by $834 million, drastically increase costs for the elderly and others that need health insurance the most, and a major reason that premiums may be very mildly lower after nine years for some people is that so many sick people will be forced off coverage14. The final outrage of the legislation is that most of the money taken away from everyday Americans for health care is redirected into a $664 billion tax cut primarily for the wealthy and medical corporations. Many commentators indicate to not be too alarmed at this point because the bill as is will likely not be passed by the Senate. But the reality is that the Senate is still controlled by Republicans and the fact that the bill was even proposed, much less passed, by the House lays bare the warped priorities of many of them. Though the Senate will likely mitigate some of the harshest aspects of the bill, the trend of reducing or denying coverage to those who need it most will likely be retained to further enrich the already well-to-do. Democratic senators need to get off their duffs to put forth concrete solutions to mend the weaker aspects of Obamacare, and all Amercans need to vigorously insist that health care in this country is improved for all of us, not diminished.

Retirement plans for working Americans over the last 30 years have progressively diminished also. For example, from the early 1990’s until 2011 the number of private sector employees who were covered by defined benefit pension plans declined by approximately half15. These plans, which often required mandatory participation by employees, by and large provided reasonable and greater retirement benefits than the 401k based plans of today that have replaced them to a great extent. The former pensions by and large allowed people to retire in dignity and often at an early enough age to thoroughly enjoy life and pursue other dreams with adequate income to meet life’s needs, and usually with secure health insurance coverage. The situation for most working Americans today is much different. The numbers tell us that a future retirement crises is brewing as in recent years fully 68% of working-age Americans do not participate in an employer sponsored retirement plan, and many that do are not saving enough to maintain their standard of living after retirement16. Some reasons for this are that the lower wage jobs of today’s economy simply don’t provide enough money to make adequate contributions towards retirement and meet life’s other basic needs, and corporations, once again despite record profits of recent years, are providing considerably less overall toward their employee’s retirement plans than they did formerly. Given the current looming crisis, it behooves our nation to strengthen Social Security retirement benefits to ensure that they alone will permit retiree’s to meet their basic life’s needs, and that in combination with other retirement income or benefits will allow a good standard of living and quality of life for America’s older population. Despite this need most Republicans at the federal level continue to push the lie that if we don’t cut social security benefits the system will lose solvency. That is because they abjectly refuse to acknowledge that there are literally hundreds of reasonable approaches to increasing revenue into social security. Start by simply paying Americans decent, fair wages. If the wage rate in this country during the last 40 years had kept pace with the increases in the productivity of American workers17 then greater payroll tax contributions by both employees and employers would likely have kept the social security system out of the difficult situation it is in today. Beyond this, pick one or a limited combination of any reasonable and appropriate taxes (yes, some taxes are actually good because the benefits they provide to people far outweigh their costs, and grown-ups actually realize that important things need to be paid for) that will save the Social Security system at the current or greater level of benefits well into the future. Some possibilities include doing away with the social security tax exemption for income over $127,200 or raising this exemption, or increasing the percentage businesses pay into social security on salaries of their employees by 2%. The latter proposal is quite justified considering the reductions many businesses have made in sponsoring or contributing to retirement plans in recent decades.

Immigration reform as virtually all know is a volatile, emotional topic. However it really does not have to be this way. All it really takes, like so many other issues, is reasonable people, with compassion, who work together, compromise and put the good of the country ahead of often petty, local politics. This country was actually very close to adopting a reasonable plan and compromise in 2013 with the work of the bi-partisan “Gang of Eight” committee. However this effort died due mainly to general dysfunction within the Republican party, and a subset of Republican legislators who pandered to the most hateful and extreme elements of their local constituents at the expense of the country. We all, and especially on the Republican side, should acknowledge that the vast majority of immigrants, legal or not, that come into this country are good people who are simply looking for a better life for themselves and their families, or, God forbid, escaping desperate, often life threatening situations due to turmoil in their home countries. Democrats on the other hand, should admit that the presence of large numbers of immigrants, legal and otherwise, does to an extent suppress wages for American workers, few Americans support open borders, and it makes no sense to have laws which are systematically ignored. The majority of undocumented immigrants in the country today arrived here during the George W. Bush era. This was not an accident. The Bush Administration, ever pandering to businesses and ignoring all other issues, winked and nodded and largely looked the other way as large numbers of undocumented workers entered the country. The reason for lack of enforcement by the Bush administration was very simple and a purpose near and dear to most Republicans at the national level – secure a large pool of inexpensive labor for businesses. In other words, one could argue that the government was complicit in the influx of illegal immigration at the time. So where does that leave us now? It leaves us with a large sub-population within our country, most of whom are very good people and behave as well or better than any American citizen, who are thoroughly immersed in a largely positive way in the economic and social fabric our country and communities, yet occupy within our nation a substandard status and very uncertain future. Many come from families in which children by way of being born in America are full citizens yet parents and other relatives are not. This diminished standing benefits neither our country nor certainly the people themselves. Constraints on their rights and opportunities limits the degree to which they can succeed and contribute to the nation. They do require various government services yet because of their situation often contribute less in tax payments than what they would as citizens. I did indicate that the presence of large numbers of recent immigrants, whether they be undocumented, legal, or on temporary work visas, does to an extent suppress wages. It is a simple economic principal that when the supply of something is high (in this case available labor) the price paid for that commodity goes down compared to when it is more scarce. But when large numbers of undocumented immigrants have been in our nation for a long time, and have become a largely positive, integral part of or our economy and society, tearing them away from our country now would likely do more harm than good. Likewise, how can a nation that can and should consider itself moral support policies that forcibly tear families apart, especially children who are legal citizens from their parents. I believe the solution is fairly simple and straight-forward. Immigration reform within this country should include a grace period in which undocumented persons who have lived in our nation for a long period of time (e.g. two years or so) without getting into criminal trouble should be presented with a reasonable path to citizenship. This is not amnesty. The process would include a modest fine or other punishment for violating immigration laws and reasonable standards in terms of proficiency with English and knowledge of our history and system of government. A procedure similar to what was proposed by the Gang of Eight. However, following the grace period it should be made clear that immigration laws will be strictly enforced, including provisions to punish employers who hire undocumented workers. Immigration quotas, including temporary work visas, should be tight initially, and based upon both the unemployment rate and a measure of the quality of jobs available to be sure the vast majority of Americans are living above the poverty line and have a decent standard of living. Provisions of course could be made to allow certain political refugees into the nation and in some cases to allow those with specialized skills that are critically needed in our country. Immigration quotas would be increased appropriately in the future when and if objectives for quality jobs in our country are accomplished, so that we can ensure that both long-time and new citizens of our nation can enjoy the standard of living that our country was once known for.

A final factor I wish to discuss in relation to the decline of the working and middle classes is the impact of big money contributors in our elections. Senator Bernie Sanders of course made this a core issue in his presidential campaign and focused much attention upon it. Most I believe intuitively understand that large corporations and wealthy individuals making big money contributions to political candidates is not a good thing, but I don’t think that many comprehend how thoroughly corrosive it is to the policy making decisions of many elected officials. Politicians in both parties are influenced by big money contributors, but most Republican officials at the national and many at the state level are basically owned by them. This is evidenced by their lack of support for virtually any policy such as minimum wage increases, affordable access to health care, tuition relief, etc., that directly benefit working Americans. Conversely virtually every policy they endorse is a benefit or perk for corporations or the wealthy. They call for never-ending tax cuts for large businesses and the well-to-do despite the fact that that we face a deficit problem and the one thing our economy has had no shortage of for the last 10 years or so is profits by businesses or money for the wealthy. The tax codes are rife with special, unfair deductions and perks for corporations that provide big money for campaigns. Medicare cannot negotiate for cheaper drug costs despite many elderly being unable afford life-saving medicine and pharmaceutical companies making virtually obscene profits. Hedge fund managers and financiers pay a much lower tax rate on profits than most other high-earning professions because of the financial lobby’s political clout. There are literally thousands of examples such as these of laws and policies designed to appease large campaign contributors that make our government more expensive, more unfair, and squeeze the economic life out of most working Americans. Abraham Lincoln said it first, and Bernie Sanders repeated it, but it is true that we will likely not see true government “of the people, by the people, and for the people” again until effective campaign finance reform becomes reality.

So, the American people on a combination of fronts have seen their standard of living and quality of life systematically degraded. Though some factors preceded this, it began in earnest with the start of the George W. Bush administration in 2001. During this time, America was railroaded into a costly (both in terms of lives lost and money), unnecessary war, we watched a national balanced budget descend into a large deficit due to the war and ill-advised tax cuts primarily for the rich, working and middle class Americans watched their incomes steadily flat-line or shrink while corporations and the wealthy saw profits and incomes soar, and finally we finished that presidency with a huge recession that saw millions of Americans lose their jobs and many of the others see the stuffing get knocked out of their personal financial worth, all because of pure, unregulated, unrestrained, greed of the banking system. President Obama stopped the economic hemorrhaging and oversaw a steady climb to improved prosperity. He put forth proposals to do even better in terms of minimum wage increases and tuition relief to name a few but at every term was met with pure, unmitigated obstructionism by Republican members of congress. Their disgusting display of governance rife with petty politics and irrational dis-like of Obama trumped the good of the country and brought much worthwhile progress of the nation in many sectors to a virtual standstill. Of course the most recent chapter in our country’s politics is that a large number of Americans (though not the majority or even a plurality), due I believe to pure frustration with dysfunctional government due to obstruction and difficult personal economic situations, have elected a president who is a pathological liar, fraud, often an immature clown, and I believe is dangerous to the country for multiple reasons. Of course he is the President, and no matter how personally revulsive we need to make an effort to work with him and find common ground when possible, but it is difficult to imagine this being successful when he possesses the personal qualities outlined and has insulted so many Americans. Likewise to this point, his proposals concerning the major economic issues facing working Americans choose to ignore problems (low minimum wage, high cost of tuition, retirement crisis) or make things worse (repeal Obamacare, big tax cuts for the rich which will skyrocket the deficit (and the middle class will have to pay for it)), and do virtually nothing to improve the standard of living for most of us.

Most all working Americans have felt the sting of “of the rich, by the rich, for the rich” policies pushed by the Republicans during the last 20 years. But Gen X and Millennials have suffered the most under these practices. They are the first American generations that can expect to see their standard of living decline in relation to their parents, and have borne the brunt of low wages, high education costs, poor retirement plans, and of course their heads will be the main ones on the chopping block when the Republicans put forth their brilliant ideas to cut social security benefits they have earned. In a way it is a shame that Baby Boomers, myself included, have sat by or even supported these policies that have cut the economics legs out from under their children’s generation and have weakened our country. It is time to no longer put stock in the idea that our elected officials will do what is best for us and our country simply because they should. We shouldn’t lose hope that this will once again happen one day but the disappointment of recent decades cannot be ignored. It is time for working Americans to band together to strive for our common good. To use conventional political processes (in general when Democrats are in charge) when possible but to not go silent and to use protest (peaceful), ballot initiatives, educational outreach, and put forth convincing arguments when they are not. I propose to start an organization called “Galvanize America” dedicated to restoring the economic well-being of our nation’s working and middle classes. Specifically, it will be devoted to:

1. Restoring decent and fair wages in our country by establishing a living wage above the poverty rate for all American jobs, and a tiered and well-structured wage scale above the minimum to reward employees for hard work, advancement, and seniority in the workplace.

2. Assuring affordable, quality higher education and technical training for all Americans who want to pursue these paths and put forth good effort.

3. Ensuring affordable, quality healthcare for all Americans.

4. Strengthening Social Security retirement benefits to be sure that individuals who have worked throughout their lives and their spouses will have a decent standard of living in retirement. 

5. Passing comprehensive immigration reform that includes a window during which time undocumented persons who have established roots in our country and have not gotten into criminal trouble may be offered a reasonable path to full citizenship. Following closure of the window strongly enforce immigration laws and base immigration numbers, including temporary work visas, on the rate of quality jobs available to Americans in our economy. 

6. Passing campaign finance reform to limit contributions to candidates by businesses and the wealthy and to truly restore government “of the people, by the people, for the people” once again. 

What has happened to America’s working people during the past couple of decades truly is inexcusable and has harmed our quality of life and weakened our country and economy. But what we can accomplish if we band together will be impressive and will restore our working and middle classes. We are small now but strong and willing to work. Please join us. Go to www.GalvanizeAmerica.com

Sources

1. Economic Policy Institute: State of working in America data library, median/average wages. 2016.

2. U.S. Census Bureau, Income and poverty in the United States: 2015.

3. Kewa/Ramani, Angelina, Jennifer Laird, Nicole Ifill, and Chris Chapman. Trends in high school dropout and completion rates in the United States: 1972 – 2009. National Center for Educational Statistics.

4. My Family Plate. Poverty and health: obesity, stress, disease. 12/11/2010. www.myfamilyplate.com .

5. SAGE Publications. Poverty, not the teenage brain, accounts for high rates of teen crime. Science Daily. 5 March 2015. www.sciencedaily.com .

6. The Institute for College Access and Success, Project on Student Debt, Student debt and the class of 2015.

7. Why college costs are so high and rising. 6/16/2015. www.cnbc.com .

8. Firger, Jessica. U.S. healthcare system ranks lowest in international survey. www.cbsnews.com . Their source: Davis, K., K. Stremilkis, D. Squires, and C. Schoen. Mirror, mirror, on the wall: how the performance of the U.S. healthcare system compares internationally. 2014 update. The Commonwealth Fund. June 2014.

9. List of countries by life expectancy. Last modified Jan. 19, 2017. www.wikipedia.org .

10. Castiillo, Michelle. U.S. has the highest first day infant mortality rate out of the industrialized world, group reports. 7 May, 2013. www.cbsnews.com .

11. Statistic Brain. Health insurance cost statistics, 4 September, 2016. www.statisticbrain.com . Their source: Kaiser Family Foundation, National Conference of State Legislatures.

12. McMahon, Tim. Inflation rate calculator. 18 March, 2014. www.inflationdata.com .

13. Peterson-Kaiser Health System Tracker. Measuring the performance of the U.S. health care system. Health system explorer. Kaiser Family Foundation. 12/7/2016. www.healthsystemtracker.org .

14. Congressional Budget Office, cost estimate for H.R. 1628, American Health Care Act of 2017, as passed by the House of Representatives on May 4, 2017. May 24, 2017. www.cbo.gov/publications .

15. Wlatrowski, William J. Monthly Labor Review, December 2012. The last private industry pension plans: a visual essay. Charts/graphs from U.S. Bureau of Labor Statistics.

16. Saad-Lessler, Joelle, Teresa Ghilarducci, and Kate Bahn. Schwartz Center for Economic Analysis. Are U.S. workers ready for retirement? Trends in plan sponsorship, participation, and preparedness.

17. www.inequality.org/income-inequality . Their source: Economic Policy Institute, analysis of Bureau of Labor Statistics and Bureau of Economic Analysis data, January 2015.


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