The decades-long stretch of increasing income inequality reportedly has eased, but as Michael Loria reported in Wednesday’s Sun-Times, its disastrous effects are keenly felt in Cook County.
A study published Tuesday by the Financial Health Network found that county residents reported higher rates of financial vulnerability — being able to save and pay bills — than the national average, even though they also reported higher-than-average rates of being financially healthy. Black and Latino residents were three to four times more likely to be financially vulnerable.
Income inequality peaked in 2012 and then began to stabilize, Time magazine has reported. But stabilizing isn’t good enough. With so much money flowing to the top tier of earners, where it accumulates, those working ordinary jobs have a hard time getting ahead.
What happens during the budget standoff in Congress could determine whether it becomes harder for average Americans to build wealth and pay their bills.
Republicans are being cagey, as a party, about demanding specific spending cuts in exchange for raising the debt ceiling. However, some Republicans have signaled they want to cut Social Security and Medicare and other government programs while also cutting taxes for the wealthy. They also have talked about a national sales tax of perhaps 30%, which would increase costs for things people buy every day. That would saddle people who punch time clocks with paying for a larger share of running the government while getting less in return. Democrats and President Joe Biden should not stand for that.
As former Ald. Ameya Pawar, now a senior fellow with the Economic Security Project, points out, America has historically low unemployment and yet “lots of suffering” because workers aren’t getting their fair share.
“If you can’t make ends meet and don’t have access to wealth-creating loans, it is hard to build wealth,” Pawar told us. “The idea that the Republicans are using the debt ceiling and [the threat of] default as sort of spear to pare back the social safety net is shameful and a travesty.”
America also needs stronger laws on collective bargaining, which would allow workers to negotiate raises. “There has never been a greater desire to organize out there in the American work force, but the law just makes it impossible,” lawyer Tom Geoghegan told us.
State and city programs to offset income disparities can only go so far. A decreasing federal minimum wage in real dollars, attacks on collective bargaining and other factors have made it harder for average families to get by.
What’s really needed is reform at the federal level, not a fight over the debt ceiling.
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