Many people say that perception is reality. This makes sense, as anyone's perception of the truth or reality can remain unaffected by facts so long as those facts remain unknown. That said, I doubt that President Bush ever asked an aide for a memo on poverty statistics or economic inequality in the United States. If he ever did, he would realize that his drive for an "ownership society," by which he seems to mean high home ownership rates, has a key requirement yet to be achieved: before people can own something, they need to be able to afford it.
Congress last increased the minimum wage to $5.15 an hour in 1997. Today's minimum wage is worth only about two-thirds of what it was in 1968. Had the minimum wage been tied to inflation since 1968, its value would now stand at $8.65 an hour. That's quite a raise.
Keeping up with inflation would be good. But keeping up with rising productivity, the ratio of labor production to hours worked or workers employed, would be better. Doing so would ensure that workers maintained a certain percentage of the wealth they produced, thus preventing a widening of the wealth gap. By this measure, the minimum wage would have to be $13.80 to match today's workers' unparalleled productivity, and just 72 cents less to keep proportional pace with corporate profits since 1968. Clearly in the last 35 years, those at the top have taken a larger amount of labor's productivity for themselves.
While the Bush administration is seemingly unaware of these facts, it continues to promote Horatio Alger's image of the American Dream, particularly with regard to two of Bush's most recent appointments. Alberto Gonzales, Bush's nominee for attorney general, grew up in a two-bedroom house with seven siblings raised by parents who had not made it past sixth grade. Bush's nominee for Commerce Secretary, Carlos Gutierrez, rose from selling Kellogg's cereal from his van in Mexico City to become its CEO years later.
Both of these men fit the "rags-to-riches" prototype like the proverbial glove. And while there is no doubt that such storybook lives still exist, the fact is that it has become harder to get ahead in the United States today.
How much harder? There are currently 2.6 million workers in the United States who work full-time yet live below the poverty level. According to USA Today, this number has risen by 45 percent since 1978. Living above poverty is a minimum handhold on the economic ladder. Below this there is less access to insurance or medical care and terrible consequences for an individual's health. Those living in poverty are also more likely to live in poorly funded, low-performing school districts.
With declining real wages, is it any wonder personal bankruptcies rose by 185 percent since 1980? The Charlotte Observer reports that 27 percent of families who earn less than $10,000 have a credit card debt totaling over 40 percent of the their income. It's hard to get ahead tomorrow when you are stuck paying for yesterday.
Let's review: Bush's goal for domestic policy is to create an ownership society. But ownership is hard to come by when one is earning minimum wage: $11,000 a year for full-time work, fully $7,000 less than what it takes to lift a family of four out of poverty. This amounts to nothing more than government-endorsed poverty wages. Without reasonable pay, buying on credit is often a low-income worker's best option - and a fine way to ensure that the nation's workers will remain stuck in debt.
So much for turning Bush's perception of an ownership society into a reality.
