Transcript Slide 1

State of the Economy, 2009
UCC General Synod XXVII
Grand Rapids, MI
June 27, 2009
The Current Crisis Stems From
Longer Trends
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• Unemployment
• Poor quality jobs
• Growing, HUGE inequality in income
Foreclosures, delinquent mortgages
Fraud, greed, excessive risk taking
High debt loads: consumers, banks, businesses
Environmental destruction
Consumerism, materialism
Unemployment, May 2009
• 14.5 million (9.4%) officially
unemployed
• 25.8 million (16.4%) not working
but want to, or want full time work
and only find part time. This is
one in every six people.
• African Americans unemployed at twice the rate
of Euro-Americans, Hispanics 50% higher than
whites.
• Teens: 3 times those of adults.
Foreclosures &
Late Mortgage Payments
In mid 2009:
• 12% of mortgages were
either in foreclosure or
behind in payments
• 48% of subprime, adjustable-rate
mortgages were behind or in foreclosure
Jobs – Low Pay
One quarter of all jobs pay poverty-level
wages, so low a full-time worker cannot
keep a family of four above the federal
poverty level ($21,200 in
2008) -- an hourly wage
below about $10 / hour.
Stagnant wages for “Production” Workers
After growing for about 30 years after WWII, wages for the 80% of workers who
are not professionals or supervisors have stagnated for nearly 30 years
$18.00
$16.01
1978
$12.00
$16.11
2005
$9.00
$6.00
$3.00
$9.00
1947
In June 2008: $16.23 and falling
$0.00
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Average hourly wage, 2005$
$15.00
Jobs – Wage Theft
Employers fail to pay workers for all hours
worked, in violation of the law
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Millions of workers, an “epidemic”
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Few penalties, little enforcement of
inadequate labor laws
Wage Theft in America by Kim
Bobo, New Press, 2009
Jobs – No Union
• 12.4% of all workers in 2008 were
in a union.
• Membership peaked at about one-third of
the workforce in the late 1940s and early
1950s.
• 50 - 60 million workers would like a union
The Labor Movement
The Folks who Brought You the Weekend
and Many Other Things
Jobs – No Jobs
The US imports (buys from other countries) many
more goods and services than we export (sell to
other countries). The difference is the “deficit”
• In 2007: 5.6 million jobs lost due to the trade
deficit, 70% were in manufacturing.
• Producing abroad means high profits for
corporations, somewhat lower prices for
consumers, but loss of
jobs and lower wages
for workers in the US
Health Ins. Coverage Declines
The Uninsured live in
Working Families
Among the 45 million uninsured nonelderly
people in 2007:
• 69% live in families with one or two fulltime workers and 12% live in families with
part-time workers.
• Just 19% have no workers in the family.
Pension Coverage Declines
The pension could be a traditional one or a 401(k) or similar plan
No Pensions
Over half of all workers do
not have an employersponsored pension of any
kind
(Thank the activists of the
1930s for Social Security)
Faster Income Growth at the Top
Even Income Growth, 1947-1979
Average Family Income for each Fifth of Families,
1966-2003 (before taxes)
$350,000
$250,000
$200,000
2003 $
Highest fifth (20%)
$150,000
$100,000
$50,000
$0
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Family
Incomes
Grow
More
Unequal
$300,000
Lowest fifth (20%)
Second fifth
Middle fifth
Fourth fifth
Highest fifth (20%)
Average Family Income for each Fifth of Families,
1966-2003 (before taxes)
$350,000
Top 5%
$250,000
$200,000
2003 $
Highest Fifth (20%)
$150,000
$100,000
$50,000
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Family
Incomes
Grow
More
Unequal
$300,000
Lowest fifth (20%)
Second fifth
Middle fifth
Fourth fifth
Highest fifth (20%)
Top 5%
Income Inequality
The very rich get richer, everyone else gets
what’s let over. The poor stay very poor.
This trend is due to changes
in the structure of the
economy and in political
influence.
It is exacerbated by changes
in tax policy
Income Inequality
• Top 1% of households: annual income up $1
million since 1979 (adjusted for inflation)
• Bottom 80% of households barely up
To return to the distribution of 1979:
• Each household in the top 1% write a check for
$800,000. Each household in the bottom 80%
gets a check for an additional $10,000.
• Do this EACH YEAR
Income Inequality
Or, to arrive at where we are now:
• Each household in the bottom 80% writes
a check for $10,000
• Gives it to a household in the top 1%.
• All together, every household in the top
1% gets $800,000.
• EVERY YEAR since 1979
Little Opportunity for Advancement
Among children of parents in the middle income range,
43% will end up below middle income. Just 33% will rise.
Little Opportunity for Advancement
Among children of parents in the lowest income range, 42% will
not leave this income group. Just 17% will be above the middle
“Family Budget”
• The “Family Budget” is based on modest
but adequate expenses for housing, food,
child care, transportation, health care,
taxes, and miscellaneous items. It varies
by region of the country and family size.
• 30% of families have incomes below the
necessary Family Budget.
Family Budget
• On average, nationwide, working-families with
two parents and two children require an income
of $48,778 to meet the family budget.
• This is roughly, twice the federally defined
poverty line.
• Over three times as many families have income
below the Family Budget as below the poverty
line.
Taxes
• Decline in share of taxes paid by
corporations largely due to tax loopholes
• Decline in taxes paid by wealthy especially
in light of their massive increase in income
• Tax advantages to upper and middle class
compared with lower-income families
Corporate Taxes
• In 2005, the most recent year for which
data are available, U.S. corporate tax
revenue as a share of GDP was only
2.6%, lower than in all but two developed
countries.
• In the 1950s, corporations were
responsible for about 25% of federal tax
receipts compared with 10% today. Tax
loopholes allow corporations to avoid
paying.
Taxes Paid by Wealthy Decline
Taxes Paid by Wealthy Decline
• In 1955, the top 400 taxpayers had an
average income of $12.3 million (in 2006
dollars). They paid 51.2% of this in taxes.
• In 2006, the top 400 taxpayers had an
average income of $263.3 million (in 2006
dollars). They paid 17.2% of this in taxes.
Taxes Paid by Wealthy Decline
• In 2006, the top 1 percent with an average
income of $1.3 million, paid 23% percent
of their income in federal income tax.
• In 1986, the top 1 percent averaged
$507,520 in income in inflation-adjusted
dollars, and paid 33% in federal income
taxes.
Tax Code Benefits Middle/Upper Class
Growing Corporate Power
• Taxes : a marked decline in federal
corporate income taxes.
• Privatization: so corporations can make a
profit on things previously provided
without a profit (water, energy, health
care, solid waste collection, etc).
• Privatization of the military – huge new
source of profit.
Growing Corporate Power
• Influence on Congress: lobbying, tax
breaks, loop holes, relaxation of
regulation (subprime lending, consumer
protections, tort “reform,” bankruptcy law),
policy decisions
• High profits.
Other Issues
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Fraud, greed, excessive risk taking
Environmental destruction
Consumerism, materialism
Bubbles: stocks, housing, credit/debt
The Church has
much to say about
all these issues
Larger Economic Trends
Summarized
• Jobs: too many with low wages and few
benefits, falling or stagnant wages
• Jobs: too few for all the people who want
to work.
• Growing corporate power and changed
role of government – is our government
democratic?
• On-going racial discrimination
• Attacks on unions
People are Hurting
Our economic system – “neoliberal” policies, rules, and
practices – is biased against
workers and working families in
the US and around the world.
The current crisis has
exacerbated and exposed
severe, long-term problems.
People are Hurting
We must address:
• The underlying structure of the economy
that fails many working families
• The cause of the crisis
• The inadequate safety
net
No One Needs to Go Without
God provides abundantly for all our needs
“Do not worry, saying, ‘What will we
eat?’ or ‘What will we drink?’ or ‘What
will we wear?’ … But strive first for the
kingdom of God and God’s
righteousness [justice] and all these
things will be given to you as well.”
Matthew 6: 31,33
Priority Reforms
• Fundamental health care reform
• Pass the Employee Free Choice Act to strengthen
workers’ right to form a union
www.ucc.org/justice/worker-justice/unions/efca.html
• Re-regulate the banking and credit system.
• Action on climate change
• Campaign finance reform, public funding of
campaigns
• New trade and investment agreements
• Your top priority?
Make Work Pay
• Raise the minimum wage to a living wage
• Improve supports for those with very low
wages
– Earned income tax credits
– Child care assistance
– Health insurance
– Housing assistance
– Food stamps
– Transportation
• Safety net for hard times
Strengthen the Right to Organize
Pass the
Employee Free Choice Act
Vote coming in July
http://www.ucc.org/
justice/worker-justice
/unions/efca.html
Federal Income Taxes
• Raise taxes on the
wealthy
• Tax income from
investments (capital gains)
at the same rate as
income from working.
• Close corporate tax
loopholes.
An Economy that Serves All
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A job for everyone who wants one
Every job pays a livable wage
Universal health insurance and pensions
Quality education for all from pre-K to
higher education
• Affordable housing
• Adequate income for those unable to work
• Sustainable production and consumption
An Economy that Serves All
Reclaim our government
so that it truly is
of, by, and for the PEOPLE
Good Things to Keep
• Progressive federal income taxes
Not as progressive as in years past, but
still fall much more heavily on the rich. A
flat tax would eliminate this.
• Social Security needs small
changes only. Preserve the
fundamentals of the program
Ways to Change the World
• Join Justice and Witness Ministries’
Justice & Peace Action Network.
Receive weekly alerts about pending
legislation and other topcis. Click and
send emails to elected officials. Keep up
on important issues. Sign up at
http://www.ucc.org/justice/join-the-network/
• Become a JWM Justice Leader
http://www.ucc.org/justice/training/
Ways to Change the World
Encourage your congregation to engage in
congregation-based community organizing.
http://www.ucc.org/justice/cbco/
Ways to Change the World
• Join labor-religious-community alliances
affiliated with one of these two national
networks:
Jobs with Justice
www.jwj.org
Interfaith Worker Justice
www.iwj.org
Ways to Change the World
Learn, discern, explore, listen for God’s call:
Just Neighbors
http://www.familypromise.org/program/just-neighbors
Just Faith
http://www.justfaith.org/JF124.html
Edith Rasell, PhD
Minister for Workplace Justice
Justice and Witness Ministries
United Church of Christ
700 Prospect Ave E.
Cleveland, OH 44115-1100
[email protected]
866-822-8224, ext. 3709