In an article entitled "Can You, Too, Join Royal Ranks?" The Wall Street Journal suggested the class divide in the U.S. might be becoming more pronounced than in British society where a prince is about to wed a commoner. In this country, the net worth of the richest Americans on the Forbes 400 list rose 8 percent this year, to $1.37 trillion. The top 20 percent of Americans now own more than 85 percent of the wealth. And, when you consider the debt they carry, the bottom 40 percent of Americans own almost nothing, making this the widest gap since the Depression of the 1930s.
The Great Recession may be over — but it sure doesn’t feel like it. And recent actions by Washington are going to make those of us still working feel worse — and poorer.
Republicans had been blocking an extension of unemployment benefits for 2 million working-class Americans out of work due to no fault of their own, including the 6.4 percent of Hawaii workers who are unemployed.
The Deficit Commission is calling for squeezing Social Security benefits and getting rid of the mortgage interest tax deduction. And President Barack Obama has decided that the wages of federal workers should be frozen, which amounts to a cut because of rising benefit costs.
Federal workers are being asked to take a haircut while millionaires and billionaires are getting off without a scratch. It’s not "shared sacrifice" when:
>> Politicians in Washington are working overtime for the super-rich, calling for an extension of tax cuts for the wealthy — at a price tag of $830 billion over the next 10 years.
>> Corporate profits set a new record of $1.7 trillion in the third quarter — but little if any of that money is going to hire new workers or to invest in America.
>> Wall Street financiers, after wrecking the global economy, are back to their old tricks, planning to give themselves a 5 percent pay increase this year.
A pay freeze for federal employees is not only unfair — it’s unwise. Uncle Sam is our nation’s largest employer, with more than 2.5 million full-time workers. Wal-Mart is a distant second. Lots of Hawaii people work for the federal government: My union, the International Federation of Professional and Technical Engineers (IFPTE) alone represents 600 highly skilled technicians, engineers and architects employed at Pearl Harbor; other IFPTE members work in Honolulu as Social Security and Immigration judges. These are the folks who will take the hit; these are your friends and neighbors.
Consumer spending accounts for 70 percent of U.S. gross domestic product — but consumers can’t spend what they don’t have. If the private sector follows the president’s lead and also cuts back on payrolls, other Hawaii families will be in the same predicament. A race to the bottom, with pay freezes and pay cuts, will mean less consumer spending. That means lower sales, fewer jobs — and lower tax revenues, which could drive the deficit even higher.
What we need is a comprehensive plan that requires wealthy Americans to pay their fair share, encourages corporations to invest profits at home instead of abroad, and puts permanent restraint on Wall Street’s endless capacity for greed.
Let’s get serious about shared sacrifice and not just hit the middle class. This is a war we can win.
Gregory Junemann is president of the International Federation of Professional and Technical Engineers, which represents 70,000 white-collar workers, including 25,000 federal employees. It represents hundreds of civilian employees at Pearl Harbor and other Hawaii-based federal workers such as Social Security and Immigration judges.