Thoughts On Wealth in America

“A true revolution of values will soon cause us to question the fairness and justice of many of our past and present policies. On the one hand, we are called to play the Good Samaritan on life’s roadside, but that will be only an initial act. One day we must come to see that the whole Jericho road must be transformed so that men and women will not be constantly beaten and robbed as they make their journey on life’s highway. True compassion is more than flinging a coin to a beggar. It comes to see that an edifice which produces beggars needs restructuring. A true revolution of values will soon look uneasily on the glaring contrast of poverty and wealth.” ~ Dr. Martin Luther King 1967

As Washington battles to cut spending and politicians babble about the “nanny state” I am thinking today about the reality of our top heavy society. Is the “Jericho Road” far worse than it was in 1967?

Relevant to the time frame of Dr. King’s words the minimum wage had its highest buying power in 1968. The minimum wage in 1968 was $1.60 per hour. Using an online inflation calculator we find that it would take $10.38 to equal the buying power of the 1968 minimum wage. Our current minimum wage is $7.25 per hour. IF an individual can find one or more employers to accumulate 40 hours a week the minimum wage would only earn $290 per week before taxes. Since the trend with employers is to keep the number of full time workers to a minimum by employing more part time people getting 40 hours a week often requires multiple jobs and the difficulty of coordinating transportation and child care to do so.

A few decades ago it was possible for a person with a high school diploma and a good work ethic to make a decent living, to provide a reasonable home and the basics of life. The work might be hard in a textile mill or some other manufacturing facility but it provided a living wage, health benefits, and self respect. Unfortunately so many in society still view the poor (which is not limited to those below the poverty line) as being solely responsible for their hardships.

The table (left) shows the US Census poverty line for a family of four. With FICA tax deducted you have $1,717 per month. How do you begin to provide a safe place to live, utilities, clothing, food, transportation, and health care for four people on just $399 per week? Yet 19 million people in the US live in extreme poverty, HALF of this.

I have seen many wonderful efforts geared toward meeting the desperate needs of people struggling to survive in our midst. People with big hearts and tireless energy invest their time, money, and talents to address these hardships. But as Dr. King pointed out, these efforts don’t correct the social and corporate priorities that created the suffering. Unfortunately it seems to be getting much worse.

“The income gap in the United States has ballooned: It's wider than any time since 1928, in the days before the stock market crash triggered the Great Depression. The numbers are startling: Top CEO salaries were up 23 percent last year, according to the New York Times; the average worker's pay was up only .5 percent. Meanwhile, the top 0.1 percent of American earners now take in more than 10 percent of the nation's collective income. That puts the U.S. in the same inequality ballpark as developing countries like Cameroon and Ivory Coast.” ~ NPR

How is it supposed to work? Those pushing to cut government entitlements are the very people kicking the supports out from under average Americans that just want to work and take care of their families. How can Americans be self sufficient when the “job creators” are creating jobs in India? How can Americans reach for a better future when cuts are made to education on all levels and higher education is still a luxury and not a right?

In the 1960s CEOs made 30 times the average worker’s wage. In 2011 they average over 300 times the average worker’s wage. More and more employers are cutting medical benefits as insurance companies hand out double digit increases year after year. Oil companies post record profits as most of us struggle to fill our tanks to get to work.

Nothing that is top heavy can stand indefinitely. It will topple. As more and more Americans are broken, discouraged, and disenfranchised the very fabric of our society will continue to weaken.