|
The Great Divide*
A COALITION REPRINT:
5 July 2000
by Robert B. Reich, Hexter Professor of Social
and Economy Policy, Florence Heller Graduate School, Brandeis
University; former Secretary of Labor; and member of the Advisory
Board, National Jobs for All Coalition.
Fed chief Alan Greenspan fears that all this prosperity is causing
consumers to buy more than the economy can produce, which means
that inflation is just around the corner. So Greenspan and his
pals at the Fed have hiked interest rates five times since last
June in an attempt to slow things down. The word on the street
is that they'll hike rates again when they meet in May, and continue
raising them until consumers calm down.
Now switch your sights to the 400 janitors who recently blocked
traffic in Los Angeles to complain about their pay. They earn
$6.80 to $7.90 per hour--less than $16,000 a year. Adjusted for
inflation, that's less than janitors earned 15 years ago. The
cleaning companies say they can't afford a dollar more, but the
janitors have been watching the rents soar in the office buildings
they take care of--the same offices in which executives and professionals
are pulling in larger and larger multiples of the janitors' take.
Janitors aren't the only ones working harder for less. More than
two million Americans work in nursing homes--bathing and feeding
frail elderly people, cleaning their bedsores, lifting them out
of bed and into wheelchairs, and changing their diapers. They
earn, on average, between $7 and $8 an hour, about the same as
janitors. Some 700,000 people work as home health care aides,
attending to the elderly, sick, or disabled at home. Their pay
averages between $8 and $10 an hour--less than $20,000 a year.
Another 1.3 million Americans work in hospitals as orderlies and
attendants, at about the same rate. Adjusted for inflation, most
of them also are earning less than they did 15 years ago.
An estimated 2.3 million Americans are paid to care for young
children in child care centers or organized play groups, or as
nannies. They feed the children, change their diapers, sing songs
to them, read to them, and tend to their bruises (physical scrapes
as well as occasional hurt feelings). The median wage of child
care workers is $6.60 an hour, usually without benefits-- less
than funeral attendants ($7.30 an hour) and pest controllers ($10.60
an hour). More than 700,000 social workers attend to individuals
and families with severe problems--alcohol and drug abuse, domestic
violence, and mental illness. Average pay: between $8 and $15
an hour.
Why are top lawyers, executives, financiers, and dot-com impresarios
earning so much more than ever before while the nation's caretakers
are earning less? Economists will tell you it's just supply and
demand. People who think for a living are in short supply and
demand for them is rising, while people who take care of buildings
and other people are in abundant supply and demand for them is
weak. The head of the L.A. building owners' association threatens
that if unionized janitors demand too much, the owners will just
switch to nonunionized janitors. But at Smith Barney, in New York,
when a 23-year-old junior banker writes a memo "presenting
the collective views of his co-workers," demanding more pay
and perks, the firm's top brass roll over.
Greenspan is worrying about the wrong people. America's caretakers
and others like them haven't participated in the economic boom.
They haven't gotten a raise in years. Most don't own any shares
of stock, so they haven't ridden the boom-ing market. Many rent
their homes, so they haven't benefited from the big rise in home
prices. In raising interest rates, Greenspan is hurting people
on the bottom rungs of the income ladder by making them pay more
for first mortgages, car loans, and other borrowing. And when
he succeeds in slowing the economy, they'll be among the first
to lose their jobs.
The big spenders are at the other end of the income ladder, where
most of the money has gone. This year the richest 2.7 million
Americans, comprising the top 1 percent, will have as many after-tax
dollars to spend as the bottom 100 million put together, and they'll
have 40 percent of the nation's wealth. The top fifth of earners
will have over half the nation's income and almost all its wealth.
If Greenspan wants to put a damper on excessive s pending brought
on by too much income and wealth, he ought to set his sights higher.
He should urge Congress to make the income tax code more progressive,
increase capital gains taxes, and pass a wealth tax on households
whose net worth exceeds a million dollars.
*Copyright © 2000 by The American Prospect, Inc. Reprinted
with permission from The American Prospect vol. 11 no. 12, May
8, 2000.
The Coalition's reprint series includes articles
of interest to our supporters. Reprints do not necessarily reflect
the views of the Coalition in every detail.
|
