Forget the glitzy façade and look at the United States from an average person’s
Setbacks, catastrophe, and ruin are hitting working people from every direction. The
economy has been worsening since 2001, but the first half of 2008 brought enormous
price increases, accelerated loss of homes, floods, massive layoffs, and spiking
The government’s response has been a predictable smoke-and-mirrors effort to hide
the widening cracks in the system, and deflect workers’ unrest with yet another tiny,
Lena Rodriguez, 80, works at a Burger King Restaurant
in Florida. Photo by Jim Reed, The Tampa Tribune.
A diversion, not a solution. In February, President Bush signed a $152 billion
“Economic Stimulus Act” passed by Congress. Tax rebate checks of $300 to $1,200 will
go to low- and middle-income individuals and families, who will receive extra money if
there are children.
As is typical for any measure advertised as relief for everyday people, this legislation
includes tax benefits for business. Companies will be able to write off twice as much
capital spending as before, which will shrink tax income to state and federal treasuries
and restrict money available for vital services.
The final “growth package” did not include funds proposed by some in Congress to
extend unemployment benefits and to repair the nation’s aging infrastructure, for example
bridges and schools, which also would have created jobs.
Workers certainly welcome the rebate checks, but they aren’t rushing out to buy new
consumer goods. The majority of people this writer interviewed in Seattle, for instance,
plan to pay bills and buy only essentials.
Said a hospital clerk, 62, “My son lost his job and his family moved in with us. I’m
using the money to buy the kids some clothes — and food. Those kids eat up a storm.” A
bookstore clerk, 27, reported, “My husband and I work fulltime but we don’t have health
insurance. We still owe $6,900 on a medical bill and that’s where the money will go.” A
nursing assistant, 29: “What else? Food, gas, food, gas.”
The current state of the States. As is true everywhere around the world, new burdens
continue to pile up in the U.S. on the backs of those least able to bear them.
• Poverty and hunger. According to the latest government figures (for 2006), about 10%
of U.S. residents live below the poverty level. But the rate for single-parent households
headed by women is 28% — more than one out of four. In some inner cities and
depressed rural areas, 30% or more of the people are impoverished.
The Department of Agriculture estimates that 17% of U.S. children don’t have enough
to eat. Food banks — volunteer hunger-relief organizations — are swamped. And, of the
25 million people they serve, more than two out of three live in households where at least
one person is employed.
“The working poor increasingly have to choose between rent, electricity, medicine and
groceries,” said a food bank spokesperson in late May.
A record 28 million people — one in 11 — now survive on government food stamps,
exchangeable in stores for groceries. The program is supposed to supplement a food
budget, but many families rely entirely on the stamp “income” — which averages about
$1 per person per meal.
In the first three months of this year alone, food prices jumped by 5.3%. Advocates have
pressured Congress to pass a mid-year boost in stamp benefits and revise the formula for
setting the monthly allowances.
These are emergency measures worth fighting for, especially given economists’
projection that U.S. food prices will increase by 9% in each of the coming years. But how
can a solution for domestic hunger be expected without at the same time vanquishing the
worldwide crisis of food prices?
• Home foreclosures. The aggressive peddling of sub-prime mortgages by lenders
created a real-estate bubble that drove home prices up 35-53% in recent years. These
price-inflated homes were heavily marketed to the poor, people of color, and buyers with
bad or no credit. No down payment was required, and buyers got a low interest rate for
two years followed by a floating interest rate. When these rates jumped to double digits,
mortgage defaults and foreclosures began ripping through the country.
Since April 2007, foreclosure filings have increased by 65% — affecting at least one out
of every 519 households. Neighborhoods where foreclosures proliferate suffer a double
blow, because when people lose their homes and move away, local businesses lay off
employees or close their doors.
The U.S. government responded to the mortgage crisis with $220 billion for major
failing banks and brokerages. Financial help for defaulting homeowners remains under
• Medical jeopardy and bankruptcy. Between 2000 and 2005, individual bankruptcies
rose 68%. Little wonder, with total consumer credit debt at $12.8 trillion!
Medical bills account for half of personal bankruptcy filings; 48 million people in the
U.S. have no health insurance. The majority of those who do have insurance are vastly
underinsured for major illnesses and accidents.
Nearly half of all private-sector workers — including 75% of low-wage earners — do not
get a single day of paid sick leave.
• Vanishing income, receding retirement. Real wages — wages adjusted for inflation
— are falling. And they’re falling unequally. Median incomes for white families fell by
$745 between 2000 and 2006; for African Americans, by $2,766.
Then, during the first quarter of 2008, precipitous drops in the value of homes and stocks
emptied U.S. households of $1.7 trillion of their combined wealth.
This hurts a broad swathe of the population, but has a special sting for the “baby
boomers,” the largest demographic clump in U.S. history. As their retirement beckons,
sources of post-employment income are drying up, with pension funds down nearly 5%
and stocks and mutual funds down 9%. And plunging real-estate prices threaten the plans
of retirees who hoped to live on money generated by selling their homes.
• Fewer jobs, worse conditions. The current official unemployment rate is 5.5%, about
8.5 million people. This figure is wildly inaccurate: it counts only those currently
receiving unemployment payments, and not the multitudes who no longer get benefit
checks but remain chronically unemployed.
Between 2000 and 2006, over 3 million manufacturing jobs were lost. So far this year,
high fuel prices and recession have caused an 8% drop in auto sales, which means that
auto companies are laying off increasing numbers of workers. Overall, tens of thousands
are being let go each month.
For those fortunate enough to have jobs, wages, hours, and working conditions are
worsening. This is largely because of the decline in unions, which now represent only
12% of the workforce. Laid-off workers often have to settle for new jobs paying half or
less of what they formerly earned.
The road to working class resurgence. The U.S. working class has a long tradition of
innovation and militancy. The hardships of the Depression stimulated irrepressible labor
battles that won sweeping reforms.
To create such a movement today is beyond the imagination of union leaders remote from
their members and wholly invested in the Democratic Party — which has proved time
and again that it is simply the “other” party of CEOs and bankers. When change comes, it
will come instead from the initiative of the workers inside and outside of the unions who
need it most: women and immigrants, people of color and diverse sexualities, the young
who are struggling to find their first jobs and the old who are anxious about retirement.
Their actions on their own behalf, and on behalf of the whole working class, cannot come