The policies of the Democratic Party benefit working people, while the policies of the Republican Party benefit the "investor class."
Despite a growing economy and rising productivity, hourly wages adjusted for inflation have declined 2 percent since 2003. Corporate profits, meanwhile, are at their highest share of gross domestic product since the 1960’s.
Source: "Kicked While Down" - NY Times - October 7, 2006



Entry-level wages for college and high school graduates fell by more than 4 percent from 2001 to 2005, after factoring in inflation, according to an analysis of Labor Department data by the Economic Policy Institute. In addition, the percentage of college graduates receiving health and pension benefits in their entry-level jobs has dropped sharply.

Some labor experts say wage stagnation and the sharp increase in housing costs over the past decade have delayed workers ages 20 to 35 from buying their first homes.

[J]ust one-third of workers with high school diplomas receive health coverage in entry-level jobs, down from two-thirds in 1979.

Census Bureau data released last week underlined the difficulties for young workers, showing that median income for families with at least one parent age 25 to 34 fell $3,009 from 2000 to 2005, sliding to $48,405, a 5.9 percent drop, after having jumped 12 percent in the late 1990’s.

The nation’s personal savings sank below zero last year for the first time since the Depression, meaning Americans spent more than they earned. But for households under 35, the saving rate has plunged to minus 16 percent, which means they are spending 16 percent more than they are earning.

For men with high school diplomas, entry-level pay fell by 3.3 percent, to $10.93, from 2001 to 2005, according to the Economic Policy Institute. For female high school graduates, entry-level pay fell by 4.9 percent, to $9.08 an hour.
Source: "Many Entry-Level Workers Feel Pinch of Rough Market" By STEVEN GREENHOUSE - NY Times - September 4, 2006



With the economy beginning to slow, the current expansion has a chance to become the first sustained period of economic growth since World War II that fails to offer a prolonged increase in real wages for most workers.

The median hourly wage for American workers has declined 2 percent since 2003, after factoring in inflation. The drop has been especially notable, economists say, because productivity — the amount that an average worker produces in an hour and the basic wellspring of a nation’s living standards — has risen steadily over the same period.

As a result, wages and salaries now make up the lowest share of the nation’s gross domestic product since the government began recording the data in 1947, while corporate profits have climbed to their highest share since the 1960’s. UBS, the investment bank, recently described the current period as “the golden era of profitability.”

Economists offer various reasons for the stagnation of wages. Although the economy continues to add jobs, global trade, immigration, layoffs and technology — as well as the insecurity caused by them — appear to have eroded workers’ bargaining power.

Trade unions are much weaker than they once were, while the buying power of the minimum wage is at a 50-year low. And health care is far more expensive than it was a decade ago, causing companies to spend more on benefits at the expense of wages.

Together, these forces have caused a growing share of the economy to go to companies instead of workers’ paychecks.

In another recent report on the boom in profits, economists at Goldman Sachs wrote, “The most important contributor to higher profit margins over the past five years has been a decline in labor’s share of national income.”

But in recent years, the productivity gains have continued while the pay increases have not kept up. Worker productivity rose 16.6 percent from 2000 to 2005, while total compensation for the median worker rose 7.2 percent, according to Labor Department statistics analyzed by the Economic Policy Institute, a liberal research group. Benefits accounted for most of the increase.

“If I had to sum it up,” said Jared Bernstein, a senior economist at the institute, “it comes down to bargaining power and the lack of ability of many in the work force to claim their fair share of growth.”

Nominal wages have accelerated in the last year, but the spike in oil costs has eaten up the gains. Now the job market appears to be weakening, after a protracted series of interest-rate increases by the Federal Reserve.

Average family income, adjusted for inflation, has continued to advance at a good clip, a fact Mr. Bush has cited when speaking about the economy. But these gains are a result mainly of increases at the top of the income spectrum that pull up the overall numbers. Even for workers at the 90th percentile of earners — making about $80,000 a year — inflation has outpaced their pay increases over the last three years, according to the Labor Department.

“There are two economies out there,” Mr. Cook, the political analyst, said. “One has been just white hot, going great guns. Those are the people who have benefited from globalization, technology, greater productivity and higher corporate earnings.

“And then there’s the working stiffs,’’ he added, “who just don’t feel like they’re getting ahead despite the fact that they’re working very hard. And there are a lot more people in that group than the other group.”

In 2004, the top 1 percent of earners — a group that includes many chief executives — received 11.2 percent of all wage income, up from 8.7 percent a decade earlier and less than 6 percent three decades ago, according to Emmanuel Saez and Thomas Piketty, economists who analyzed the tax data.

At the same time, [new Treasury secretary, Henry M. Paulson Jr.] said that the Bush administration was not responsible for the situation, pointing out that inequality had been increasing for many years. “It is neither fair nor useful,” Mr. Paulson said, “to blame any political party.”
Source: "Real Wages Fail to Match a Rise in Productivity" By STEVEN GREENHOUSE and DAVID LEONHARDT - NY Times - August 28, 2006



The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others.

But six I.R.S. estate tax lawyers whose jobs are likely to be eliminated said in interviews that the cuts were just the latest moves behind the scenes at the I.R.S. to shield people with political connections and complex tax-avoidance devices from thorough audits.

Estate tax lawyers are the most productive tax law enforcement personnel at the I.R.S., according to Mr. Brown. For each hour they work, they find an average of $2,200 of taxes that people owe the government.

Over the last five years, officials at both the I.R.S. and the Treasury have told Congress that cheating among the highest-income Americans is a major and growing problem.
Source: "I.R.S. to Cut Tax Auditors" By DAVID CAY JOHNSTON - NY Times - July 23, 2006



Today, more than 40 percent of total income is going to the wealthiest 10 percent, their biggest share of the nation's pie in at least 65 years.

Unchecked inequality may also tend to create still more inequality. Edward L. Glaeser, a professor of economics at Harvard, argues that as the rich become richer and acquire greater political influence, they may support policies that make themselves even wealthier at the expense of others. In a paper published last July, he said, "If the rich can influence political outcomes through lobbying activities or membership in special interest groups, then more inequality could lead to less redistribution rather than more."

In the United States, there is plenty of evidence that this has been occurring. Bush administration policies that have already reduced the estate tax and cut the top income and capital gains tax rates benefit the well-to-do. It seems hardly an accident that the gap between rich and poor has widened.
Source: "Income Inequality, and Its Cost" By ANNA BERNASEK - NY Times - June 25, 2006



When you hear the Republicans say they want to "get government off the people's backs," what they really mean is that they want to "get the people off the corporations backs."


The tax cut bill that Senate and House leaders have generally agreed upon is expected to save Americans at the center of the income distribution an average of $20 each, according to estimates by the Tax Policy Center, a nonprofit research organization in Washington.

The top tenth of 1 percent, whose average income is $5.3 million, would save an average of $82,415. Those in the top group would see their tax bill cut 4.8 percent, while Americans at the center of the income distribution — the middle fifth of taxpayers, who will earn an average of $36,000 this year — could expect a 0.4 percent reduction in their tax bill, or about $20.

Those who make less than $75,000 — which includes about 75 percent of all taxpayers — would save, at most, $110 each. Those making more than $1 million would save, on average, almost $42,000.

Significant tax cuts would go to those making $75,000 to $1 million because the bill would restore for one year, and also expand, relief from the alternative minimum tax, a separate and often more costly tax system.
Source: "Analysis of Tax Bill Finds More Benefits for the Rich" By DAVID CAY JOHNSTON - NY Times - May 5, 2006



During the period from 1979 to 2000, the wealthiest 1% of Americans saw their income increase 184%, while the poorest 20% saw their income increase 6%.
Source: Congressional Budget Office via CNN - 7/14/04



For every additional dollar earned by the bottom 90 percent of the population between 1950 and 1970, those in the top 0.01 percent earned an additional $162. That gap has since skyrocketed. For every additional dollar earned by the bottom 90 percent between 1990 and 2002, Mr. Johnston wrote, each taxpayer in that top bracket brought in an extra $18,000.

Economic mobility in the United States - the extent to which individuals and families move from one social class to another - is no higher than in Britain or France, and lower than in some Scandinavian countries. Maybe we should be studying the Scandinavian dream.

"Under the Bush tax cuts, the 400 taxpayers with the highest incomes - a minimum of $87 million in 2000, the last year for which the government will release such data - now pay income, Medicare and Social Security taxes amounting to virtually the same percentage of their incomes as people making $50,000 to $75,000. Those earning more than $10 million a year now pay a lesser share of their income in these taxes than those making $100,000 to $200,000."
Source: "The Mobility Myth" - By BOB HERBERT - NY Times - June 6, 2005



[Thomas] Jefferson [third president and founder of the Democratic Party], in a letter to William B. Giles, December 26, 1825, saw a danger that moneyed men might change the very structure of government in the interest of those "who, having nothing in them of the feelings or principles of '76, now look to a single and splendid government of an aristocracy, founded on banking institutions, and moneyed incorporations under the guise and cloak of their favored branches of manufacturers, commerce and navigation, riding and ruling over the plundered ploughman and beggared yeomanry."
Source: "The Birth Of Modern America" by Douglas T. Miller - 1970



Almost every contested issue on the American political landscape today can be boiled down to one source: the division of the nations wealth.

Defining the Upper, Middle and Lower Classes

An analysis of political affiliation according to income groups requires a categorization of the population by income levels. The standard grouping used for most discussions relies on three designations; the upper, middle and lower income groups. A reasonable method for determining these groups is to divide the general population by thirds according to individual income. According to US Census figures for 2000, roughly one third of Americans with income over 15 years of age earn $1-13,000, one third earn $13,000 - $32,000 and one third earn over $32,000. Therefore, assuming that the three commonly referred to income classes are divided evenly by population, the cutoff point between lower and middle income Americans would be $13,000 and the cutoff point between middle and upper income Americans is $32,000. (Roughly 17% earn over $50,000, while roughly 3.5% earn over $100,000.)

Lower Class $0 - $13,000
Middle Class $13,000 - $32,000
Upper Class $32,000 +



Half of employed Americans earn $35,000 or less.
(Congress earns $158,000, putting them in the top 5% of earners)
Source: PBS "Now" - 7/2/04



The correlation between party and class

It seems only natural that the people at the top of the spectrum would support government policy and policy makers who favor a wide disparity of income with those at the top netting a disproportionate amount, while the people at the middle and lower rungs would support those who would divide the pie more evenly. A brief examination of the makeup of the two major political parties in America will soon dispel this assumption.

Today our national political scene is dominated by two major political parties, the Democrats and the Republicans. Among the nations voting public, we appear to be divided equally. As of this writing, the White House is occupied by a Republican although the Democratic candidate won the popular vote by a slim majority of only 540,000 votes. The Republican party holds a narrow majority in the 108th House of Representatives (229 Republicans, 205 Democrats, 1 Independent) and the 108th Senate (51 Republicans, 48 Democrats, 1 Independent). This constitutes a virtual tie.

One might assume from this statistical balance in the most visible components of our national government that the policies of each party represent the median level of wealth among those that they represent. However this is demonstrably not the case. The Republican party consistently sides with the financially elite class, while the Democratic party typically represents the working class. Despite the distracting side issues emphasized from time to time by either or both parties, the division of wealth remains the primary philosophical difference between the two parties.

An examination of this fundamental difference requires the definition of several ancillary terms and concepts. One is the methods of wealth distribution that are available to government. The primary wealth distribution policies that fall under the control of the federal government are the powers to tax and spend. By confiscating the money of some individuals and entities in the forms of taxes and fines, and reallocating that money to other individuals in the forms of subsidies, cash payouts and contracts, the federal government shifts the ownership of wealth from one individual or entity to another.



"Analysis shows that 8.1 million lower and middle-income taxpayers, who pay billions of dollars a year in income taxes, will receive no tax reduction under the legislation."
Source: (Robert Greenstein, CBPP, 6/1/2003) via DeanForAmerica.com



Announcing his second big tax cut package in January 2003, Bush stated that "These tax reductions will bring real and immediate benefits to middle-income Americans. Ninety-two million Americans will keep an average of $1,083 more of their own money." But because the package was tilted heavily towards the very wealthy, the average tax cut for households in the middle quintile of the income spectrum was only $217, according to the Urban-Brookings Tax Policy Center.
Source: "The Mendacity Index - Which president told the biggest whoppers?" -- Washington Monthly -- September 2003



Secretary of Labor Elaine Chao has announced the Bush Administration's plan to end the 60-year-old law which requires employers to pay time-and-a-half for overtime.

I'm sure you already knew that -- if you happened to have run across page 15,576 of the Federal Register. According to the Register, where the Bush Administration likes to place its little gifts to major campaign donors, 2.7 million workers will lose their overtime pay for a "benefit" of $1.53 billion. I put "benefit" in quotes because, in the official cost-benefit analysis issued by Bush's Labor Department, the amount employers will now be able to slice out of workers' pockets is tallied on the plus side of the rules change.
Source: GregPalast.com -- "THE GRINCH THAT STOLE LABOR DAY" -- Washington Monthly -- Friday, August 29, 2003



How do conservatives get away with it? Why do voters continue to vote against their own self interest?



The myth of Horatio Alger success is so powerful that few concede they live at the lower levels of financial attainment. If they do, it's just a temporary condition -- or so they believe. A Time-CNN poll conducted during the 2000 presidential election asked voters whether they were in the top 1 percent of income earners. Nineteen percent responded that they were.
Source: WorkingForChange.com -- "Working poor can't expect any help from Washington" -- Cynthia Tucker -- Universal Press Syndicate -- 5/30/03



(Incidentally, Horatio Alger was a second-generation Harvard graduate -- Editor)



The cost of a college education at a four-year public university has risen a devastating 35 percent since George W. Bush took office.

As an added little gift for the new grads, the Bush administration's latest budget-cutting guidelines will lead to a $550 million reduction in federal assistance to those college students in need of financial aid.

Nowhere are these perverted priorities on greater display than in California, where Gov. Arnold Schwarzenegger … has put forth a budget proposal that would, among other things, slash $660 million from the state's public colleges and universities, increase undergraduate tuition over the next three years by more than 30 percent (this on top of a 40 percent tuition increase since 2002), deny admission to 25,000 qualified students, cut financial aid, lead to larger class sizes and fewer course offerings, and eliminate state support for outreach programs that help prepare disadvantaged students for college.
Source: "Graduation 2004: Pomp and crummy circumstances - 'Education president' presides over penny-wise, pound-foolish national education policy" by Arianna Huffington 6/17/04



George Bush comes from a world where money is inherited and hoarded, not earned and spent.
NY Times - 12/23/07


Source: NY Times - 12/23/07
NY Times - 12/23/07


Source: NY Times - 12/23/07
NY Times - 6/25/2006


Source: NY Times - 6/25/2006

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3/29/2024

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