=======================Electronic Edition========================
RACHEL’S HAZARDOUS WASTE NEWS #286
—May 20, 1992—
News and resources for environmental justice.
——
Environmental Research Foundation
P.O. Box 5036, Annapolis, MD 21403
Fax (410) 263-8944; Internet: erf@igc.apc.org
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WHAT WE MUST DO–PART 16: WHERE HAS ALL OUR MONEY GONE?
They tell us we can’t afford to prevent pollution; clean
technology is beyond our means. We can’t get off oil and coal,
even as they parboil the planet. Solar energy could save us, but
we can’t afford it. Alternatives? Nuclear power is all we can
afford, they say.
They say we can’t afford to re-build the light-rail mass transit
our cities enjoyed in the 1920s and 30s. We can only afford more
highways, trucks, and traffic jams, plus 45,000 highway deaths
per year. We can only afford sickening smog; healthy air costs
too much. Cancer prevention? No funds. The money’s tied up in
hospitals and hospices, chemotherapy and crematoria.
Most people can’t afford wholesome food; they will have to get by
on processed junk bulked up with fats and sugars laced with
chemicals and pesticides. We CERTAINLY can’t afford farms that
support families. Economics, don’t you know.
We can’t afford to manufacture durable, serviceable items made
from biodegradable raw materials, items we could dismantle and
recycle and which wouldn’t poison the planet when discarded. More
throw-away poisonous plastic crapola is all we can afford.
Decent education for the many? We can barely afford it for the
few. For a majority, proper preventive health care is beyond
reach; simply unaffordable. That’s just the way it is; times are
tough. Decent housing for all? Too expensive, we’re told. A
million or so homeless is the best we can do.
We must close the libraries just as, some time ago, we shut the
mental institutions and turned the people out. Necessary business
decision. The cost of compassion had gone through the roof. The
treasury is strapped. Government has gone broke. There’s just no
money, we’re told.
Where has all our money gone? MIT [Massachusetts Institute of
Technology] economist Paul Krugman offers this summary:[1] “The
basic story of the US economy between 1977 and 1989 is that there
was fairly substantial economic growth, but most families saw
little increase in their real incomes. They may have been able to
consume more per person, but this was only because they both
worked harder [longer hours] and had fewer children. So where did
the growth in the economy go? The answer is that most of it went
to a few well-off families,” Krugman says.
The Congressional Budget Office elaborates on this theme: Between
1977 and 1989, average family income after taxes increased by 9
percent–from about $27,000 in 1977 to nearly $29,500 in 1989.
True, by 1989 there were more families: In 1977 there had been 81
million families; in 1989 there were 102 million families. But
there was substantial growth BEYOND what was produced by
increased population. Where did the growth go? “Of the $250
billion aggregate [annual] increase in income beyond that
accounted for by population growth, 70 percent went to families
in the top 1 percent of the income distribution….”[2] Now we’re
getting somewhere.
Who are these top 1 percent? To join them, your annual income
must be at least $325,000. Their AVERAGE annual income is
$550,000.
“In 1990 the typical chief executive officer of an American
manufacturing company with annual sales of about $250 million was
paid $633,000 in salary and other forms of compensation. In Japan
and in major countries of Europe the figure was roughly half
that.”[3] Ah, so.
“In terms of income alone, those at the high end of the
distribution experienced huge gains during the decade of the
1980s, as the top 1 percent saw average family income grow by 75
percent, from $312,206 in 1980, to $548,970 in 1990 (both figures
in 1990 dollars); while all those families falling in the bottom
90 percent saw average income grow by just 7 percent, from
$27,451 to $29,334…. Families in the bottom 10 percent saw
their average income decline during the 1980s, from $4791 to
$4295.”[4]
The richest 1 percent of American households owned 37 percent of
all private net worth in 1989, up from 31 percent in 1983. In
other words, in round numbers 1 percent of the people now own 40
percent of all private assets–an astonishingly unequal
distribution of wealth and, of course, of power. By 1989 the top
1 percent (834,000 households with about $5.7 trillion of net
worth) WAS WORTH MORE THAN THE BOTTOM 90 PERCENT OF AMERICANS (84
million households with about $4.8 trillion of net worth). The
top 1 percent owns a disproportionate share of many kinds of
assets: they own 49 percent of all publicly-held stock; they own
62 percent of all business assets; they own 78 percent of all
bonds and trusts; they own 45 percent of all non-residential real
estate.[5] “According to the Congressional Budget Office, the
richest 20 percent of families took MORE THAN 100 PERCENT of the
growth in average family income [that occurred between 1977 and
1989]. How could that be? The bottom 40 percent of the population
actually lost ground,” says a NEW YORK TIMES editorial.[6]
From 1977-1989, the real [per-person] earnings of non-supervisory
workers declined 12 percent, according to the 1991 ECONOMIC
REPORT OF THE PRESIDENT. Young male workers without college
degrees–which is to say, a majority of entrants into the labor
market–experienced real wage declines of 15 percent to 20
percent between 1977 and 1989.[7]
In 1990 the average weekly wage for a production or
non-supervisory worker bought 20 percent less than in 1972,
according to the 1991 ECONOMIC REPORT OF THE PRESIDENT.[8]
In 1980, corporate chief executive officers made roughly 40 times
the average income of average factory workers. By 1989 C.E.O.’s
were making 93 TIMES AS MUCH.[9]
The U.S. Census Bureau sets $12,195 per year (or $6.10 per hour,
40 hours a week, 50 weeks a year) as the wage needed to pull a
family of four out of poverty. (This annual salary is expressed
in 1990 dollars and is adjusted for inflation.) In 1979, 6.5
percent of workers earned below the poverty line; by 1990 the
number had grown to 10.5 percent. In 1990, 14.4 million full-time
workers earned incomes at or below the poverty level. [10]
In 1978, 75 percent of Americans were living in households
earning $18,000 to $55,000–a standard definition of the middle
class; by 1990, only 60 percent of Americans lived in such
families. The middle class has shrunk dramatically, according to
Syracuse University economist Timothy Smeeding and University of
Michigan economist Greg Duncan. [11] And it continues to shrink
today.
In 1989, there were 790,000 taxpayers who reported an adjusted
gross income of $200,000 or more [total reported: $409 billion].
They paid taxes at the rate of 24.1 percent on adjusted gross
income. Just 10 years earlier there had been only 94,000 people
this rich. In 1979 they had paid a tax of 45.3 percent–so during
the 1980s, taxes on the rich were cut roughly by half.
What about the super-rich, those with annual incomes of more than
$1 million per year? Their numbers increased nearly 100-fold,
from 642 in 1970 to 3601 in 1979 to 61,987 in 1989. In 1989 their
adjusted gross income was $159 billion, on which they paid taxes
of $39 billion, for a tax rate of 24.7 percent. Back in 1979,
millionaires paid 50.2 percent tax on their adjusted gross
income. [12] Another tax on the rich cut by half.
Eighty percent of the nation’s households have not gained ground
on inflation since the 1970s. Median family income in 1990 was
$29,943, or $1000 less than it was in 1973. For all but the 20
percent of households with incomes above $80,000 annually, income
has stagnated. [13] The dream has gone bad.
Writing in 1830, Alexis de Toqueville began his observations on
the young nation, DEMOCRACY IN AMERICA, by saying, “Nothing
struck me more forcibly than the general equality of condition
among the people.” All that’s gone now. And with it our dream of
prosperity–or, more importantly, SUFFICIENCY–for all. What to
do?
A surtax of 20 percent on people making $200,000 or more today
would raise $82 billion for the treasury. A more modest surcharge
on those with incomes be-tween $100,000 and $200,000 would bring
the total gain to more than $100 billion. Restoring the 1979 tax
rate of 50.2 percent on people with incomes over $1 million would
yield $40 billion more.
That would give the treasury $140 billion more each year. A lot
could be done with that. Rebuild mass transit; build housing;
care for the sick; reopen libraries; educate people about disease
prevention, self-care, and the importance of nutrition; cut crime
and drugs by creating full employment the way they do in
enlightened countries, making jobs to give people a sense of
dignity and worth; offer loans to rebuild the industrial
infrastructure with clean technology to PREVENT pollution. The
money the nation needs is there. We simply have to recognize what
we must do: seize the day.
–Peter Montague, Ph.D.
[6] “The Rich Get Richer and What to Do About It,” NEW YORK TIMES
April 19, 1992, pg. 10.
[7] 1991 REPORT… quoted in Paul Krugman’s March 30, 1992, memo
cited above, pg. 3.
[11] Richard Morin, “America’s Middle-Class Meltdown,” WASHINGTON
POST Dec. 1, 1991, pgs. C1-C2.
Descriptor terms: mit; paul krugman; poverty; middle class;
timothy smeeding; greg duncan;