It is unconscionable that while the ranks of the nation’s poor are growing and American paychecks have shrunk for the third year in a row, the Bush Administration has continued to pander to the wealthy through millionaire tax cuts while having no real plan for low and middle-income Americans. In fact, the Administration has proposed stripping overtime protections from millions of workers, threatening to reduce household income for working families even further.
Today’s reports reflect the tremendous job loss of the last several years. Since President Bush took office, American workers have lost 3.3 million jobs in the private sector, erasing the remarkable job gains of the late 1990s.
The reports show that income for the median household now has fallen for three years in a row, dropping by $491 from 2001 to 2002 and by $1,506 since 1999. It is down to $42,409, from a peak of $43,915 in 1999. The nation’s wealthiest households -- those ranked in the top fifth of all income earners -- still received virtually half of the nation’s total income, or 49.7 percent. Meanwhile, the lowest fifth of households again received only 3.5 percent of total income.
Working families’ prospects for 2003 are not good. So far this year, real wages are falling for the bottom 30 percent and the top 10 percent of wage earners and are stagnant for workers in the middle, according to a recent study by the economic policy institute. Furthermore, a new survey of business by Hewitt Associates shows that workers’ 2003 base salary increases are at the lowest level in 27 years.
The poverty rate jumped to 12.1 percent in 2002. Poverty is up among the most vulnerable Americans, with 12.1 million children and 3.6 million seniors continuing to live in poverty. This development is all the more troubling given the tax and budget policies pushed through by President Bush and Congress that have resulted in cuts in critical protection programs, such as Medicaid’s health benefits for low-income Americans.
Strong job growth at the end of the last decade coincided with important gains in income and declines in poverty for minorities. Today’s reports make it clear that the Bush recession and increases in unemployment have halted and begun to reverse those big gains, with poverty rates up and incomes down for African Americans and Hispanics.
All of this comes on top of other disturbing trends affecting Americans. The official unemployment rate is up to 6.1 percent nationally—from 4.1 percent in January of 2001—and has risen in 49 states and the District of Columbia and merely held steady in the remaining state. The manufacturing sector has lost jobs for 37 straight months, with 2.5 million well paying, middle-class manufacturing jobs gone just since President Bush took office.
The continuing national health care cost crisis has compounded the pain for working families. As incomes have dropped, health insurance costs have soared. Between 2000 and 2002, the real premiums workers pay for family health insurance in the most widely-used type of health plan soared by 20 percent. In addition, employers have been cutting the benefits families get from their health plans and shifting costs onto the sick. As of 2001, 41.2 million Americans were uninsured, an increase of 1.4 million over 2000.
Prospects for the future continue to dim. The President’s tax and budget policies have dug a deep hole for working families and the administration’s failure to come up with a real strategy that creates jobs, instead of handing enormous tax cuts to the wealthy, means families will have a harder time climbing out of that hole. According to a Citizens for Tax Justice report released earlier this week, the Bush tax and budget policies will create a national debt burden of $9,456 per person and $37, 826 per family of four on average just from fiscal years 2002-07, even after counting the average tax savings from the Bush tax cuts.
Contact: Suzanne Ffolkes (202) 637-5018
