Tag Archives: low wages

The Walton’s wealth equals the bottom 40% of Americans: how the rich amass fortunes

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According to Pat Garofalo at Think Progress, Walmart heirs have a combined wealth equal to the bottom 40% of Americans combined:

“Last year, Sylvia Allegretto, a labor economist at the Center on Wage and Employment Dynamics, found that as of 2007, the Walton family — heirs to the Walmart fortune — had a net worth equal to that of the bottom 30 percent of Americans. And due to the effects of the Great Recession that ratio has gotten substantially worse. New Federal Reserve data analyzed by both Allegretto and Josn Bivens at the Economic Policy Institute shows that the Waltons now hold as much wealth as the bottom 40 percent of Americans combined.”

So? Didn’t they ‘earn’ their wealth — should we punish the Walton family for being this wildly successful? As Garofalo points out, the federal government (i.e. the Republican Party / tax laws) have helped to redistribute money towards the Walton fortune as much as anything:

“At the same time that the Waltons have amassed an ever larger fortune, Congress decided to cut the estate tax, a policy for which the Waltons have been pushingfor years. And now that the estate tax cut is in place, conservatives are doing everything they can to ensure it doesn’t go away, allowing the Waltons to amass even larger amounts of wealth.”

And as president, Mitt Romney would like to redistribute even more money to the Waltons by implementing further tax cuts for those in the elite one percent class (himself included).

Further, let’s not forget that the Walton family fortune has been built on the backs of their low-wage employees:

“[Walmart] employees on average take home pay of under $250 a week. The salary for full-time employees (called “associates”) is $6 to $7.50 an hour for 28-40 hours a week, which is typical in the discount retail industry. This pay scale places employees with families below the poverty line, with the majority of employees’ children qualifying for free lunch at school. When closely examined, this amounts to a form of corporate welfare, as the taxpayer subsidizes the low salaries. One-third are part-time employees – limited to less than 28 hours of work per week – and are not eligible for benefits.”

So every taxpayer, in any community where a Walmart is located, has helped to subsidize the Walton family’s employees — and by extension, the Walton family fortune.  Instead of expecting them to pay their workers a living wage and provide affordable benefits (remember labor unions?), taxpayers have helped the Waltons pocket a selfishly unequal amount of their profits. Profits, by the way, which are created by selling goods from other countries, like China:

“Despite a well-publicized “Made in the U.S.A.” campaign, 85 percent of the stores’ items are made overseas, often in Third World sweatshops. In fact, only after Wal-Mart’s “Buy American” ad campaign was in full swing did the company become the country’s largest importer of Chinese goods in any industry. By taking its orders abroad, Wal-Mart has forced many U.S. manufacturers out of business.”

The Walton family is a basic story of how many in the elite one percent acquire their fortunes (ingenuity and hard work or by cheating with a lot of help from others including all levels of government). It’s this kind of information, ultimately, that people like Mitt Romney would like to withhold from public scrutiny. One doesn’t willingly reveal how one’s fortune was made, where it came from, who was sacrificed, and how it’s being used now by turning over one’s tax returns to the rabble. That could turn out to be rather distasteful.

Does America REALLY want what Texas has?

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Robert Reich | How to Create More Jobs By Lowering Wages: Texas and America:

[...] While Texas leads the nation in job growth, a majority of Texas’s workforce is paid hourly wages rather than salaries. And the median hourly wage there was $11.20, compared to the national median of $12.50 an hour.

Texas has also been specializing in minimum-wage jobs. From 2007 to 2010, the number of minimum wage workers there rose from 221,000 to 550,000 – that’s an increase of nearly 150 percent. And 9.5 percent of Texas workers earn the minimum wage or below – compared to about 6 percent for the rest of the nation, according to the Bureau of Labor Statistics. The state also has the highest percentage of workers without health insurance. Texas schools rank 44th in the nation in per-pupil spending.

The Perry model of creating more jobs through low wages seems to be catching on around America.

According to a report out today from the Commerce Department, the median income of U.S. households fell 2.3 percent last year – to the lowest level in fifteen years (adjusted for inflation). That’s the third straight year of declining household incomes. Part of this is loss of jobs. Part is loss of earnings.

More and more Americans are retaining their jobs by settling for lower wages and benefits, or going without cost-of-living increases. Or they’ve lost a higher-paying job and have taken one that pays less. Or they’ve joined the great army of contingent workers, self-employed “consultants,” temps, and contract workers – without healthcare benefits, without pensions, without job security, without decent wages.

It’s no great feat to create lots of lousy jobs. A few years ago Michele Bachmann remarked that if the minimum wage were repealed “we could potentially virtually wipe out unemployment completely because we would be able to offer jobs at whatever level.”

I keep on hearing conservative economists say Americans have priced themselves out of the global high-tech labor market. That’s baloney. The productivity of American workers continues to soar. The problem is fewer and fewer Americans are sharing the gains. The ratio of corporate profits to wages is the highest it’s been since before the Great Depression.

Besides, how can lower incomes possibly be an answer to America’s economic problem? Lower incomes mean less overall demand for goods and services — which translates into even fewer jobs and even lower wages.

In short, the Perry (and Bachmann) model of job growth condemns Americans to lower and lower living standards. That’s nothing to crow about.

How is this not a war on the middle-class and income redistribution, bottom to top?

The Texas Miracle: #1 in adults lacking diplomas, tied #1 for low-wages, #1 for medically uninsured, #4 for poverty

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OF COURSE, IT REALLY IS A MIRACLE FOR TEXAS EMPLOYERS: they get to pay some of the lowest wages in the country, provide zero health benefits to their employees, have little or no regulation, and — bonus! — they have a governor who’s willing to slash education spending rather than raise their taxes. Harold Meyerson breaks down the sad facts:

Consider the Texas that Perry holds up to the rest of the nation for admiration. It has the fourth-highest poverty rate of any state. It tied with Mississippi last year for the highest percentage of workers in minimum-wage jobs. It ranks first in adults without high school diplomas. Twenty-six percent of Texans have no health insurance — the highest percentage of medically uninsured residents of any state. It leads the nation in the percentage of children who lack medical insurance. Texas has an inordinate number of employers who provide no insurance to their workers, partly because insurance rates are high, thanks to an absence of regulations.

Perry seems quite comfortable with the state’s lagging performance in what we might term the pursuit-of-happiness index. Consider his indifference toward education: In 2008, the state comptroller found that 12 percent of Texans lacked high school diplomas and that the level would rise to 30 percent by 2040 unless the state’s commitment to education was considerably increased. This year, though, when confronted with a $27 billion budget deficit, Perry did not raise taxes but instead slashed $4 billion from K-12 schools. In this regard, the equation of Perry with China’s leaders is unfair to China: The Chinese understand that the better educated their people become, the more high-skill and high-compensating jobs their nation will attain. No such understanding seems to have permeated Perry’s brain.

[...] What Perry either ignores or doesn’t know is how greatly Texas has benefited from the investments and regulations of the federal government he despises. He grew up, he tells all who will listen, on a small, hardscrabble Texas farm. But it was Franklin Roosevelt’s Rural Electrification Administration that brought electricity to those farms, which, left to the mercies of the market, would have remained dark for decades. The New Deal threw money at Texas, bringing it dams, highways and schoolhouses. The cumulative effect of policies such as the federal minimum wage has been to diminish the disparity that long existed between the industrialized North and the more poverty-stricken South.

Perry wants to unravel the national social contract and once again have us go state by state, with the low-wage, low-reg states dragging down the others, much as Chinese mercantilism has dragged down wages and living standards across the United States. He is the 21st-century, homegrown version of the Manchurian candidate.

Read the rest…


image: think-progress

Related:

Rick “Secede With Me” Perry: Big Money donors and job creation in Texas

Did you know one major factor in Rick Perry’s ‘Texas Miracle’ was government jobs?