Thanksgiving is, we’re reminded, a time to count our blessings. This year, I’m grateful that I emerged basically intact from a recent medical adventure. I’ll spare you the details, other than to thank the healers at Toledo Hospital for their care.
But we also should remember at Thanksgiving, and throughout the year, that many of our neighbors have a lot fewer blessings to count than the rest of us. That doesn’t always just happen; sometimes the game is rigged politically not only to maintain some folks’ advantages, but also to increase them.
The holiday season brings a new report on income inequality from two progressive stalwarts in Washington, the Center on Budget and Policy Priorities and the Economic Policy Institute. The study’s title, “Pulling Apart,” reflects its conclusion: In nearly every state — including Ohio and Michigan — the gaps between the incomes of the richest households and of poor and middle-class families, already wide, continue to grow.
By 2010, the average income of the top 5 percent of Ohio households was more than $220,000 a year — almost 11 times as much as for the average household in the bottom 20 percent, the report notes. Since the 1970s, average income for this top group, adjusted for inflation, has risen by 85 percent. For the bottom fifth, it hasn’t grown at all.
It gets worse. In Michigan, average incomes among the poorest 20 percent of families dropped by 10.3 percent during the decade that started in the mid-1990s (in Ohio, it was 6.9 percent). Incomes also fell among the middle fifth of Ohio and Michigan households. And even then, neither Michigan nor Ohio is among the nation’s most unequal states.
Well, so what? If you not only survived the Great Recession, but managed to improve your family’s situation, isn’t that a testament to your skill and hard work? Why should it worry you if someone else is falling behind?
Here’s why: This nation was founded, and grew to global dominance, on the bedrock belief that if you work hard and contribute to America’s economic growth, you deserve to share the benefits of that growth.
But the new report documents that since the 1970s, an ever-increasing share of those benefits has gone to the wealthiest Americans, often as a result of government policies. At the same time, poor and middle-income families that worked hard and played by the rules have watched their incomes fall and their insecurity rise.
The gaps widened even before the recession, for a number of familiar reasons: growing unemployment and wage inequality, foreign competition, a shift from manufacturing to service jobs, and expansion of investment income. In Ohio, tax changes have especially benefited the state’s wealthiest residents.
Rising inequality is a threat to economic growth. We’ll need a highly skilled work force to compete in the global economy of the 21st century. Poor, hungry children from unstable families who attend badly performing schools aren’t going to prepare themselves well for those good-paying, but demanding, jobs.
“We pioneered a broad middle class and an economy that worked for everyone — that was the triumph of the 20th century,” said Amy Hanauer, executive director of the advocacy group Policy Matters Ohio, which contributed to the national report.
“How much are we all compromised when we know that kids in our community aren’t getting the child care that they need, aren’t in safe situations?” she said. “Doesn’t that impoverish all of us? It makes our state less sustainable. We’re no longer the state we thought we were.”
When I was in the hospital this month, I didn’t have to worry about how I would pay for my care. The health insurance provided by my employer would cover the bulk of the cost.
The man in the next bed wasn’t so fortunate. He had no insurance, and he and his family had to examine options for indigent care, none of them appealing.
The national report offers several prescriptions for reducing income inequality and its effects: A higher federal minimum wage, indexed to inflation. More support for low-income workers in such areas as child care, public transportation, and health insurance. Greater access to unemployment benefits among jobless workers, and restoration of benefits that have been cut.
In our state, Policy Matters Ohio proposes reinstating the 7.5 percent state tax bracket for incomes of more than $250,000 a year, which was eliminated as part of tax changes in the past decade. The group also proposes a new 8.5 percent tax bracket for incomes of more than $500,000.
These two steps would generate $650 million a year to help restore previous cuts in state aid to local schools, libraries, parks, public safety forces, and infrastructure, while raising taxes on just 1.3 percent of Ohio taxpayers, Policy Matters says.
I suggested to Ms. Hanauer that, given the political climates in Washington and Columbus, such changes are unlikely to occur.
“There you go, throwing political realism at me again,” she mock-chided me. “We just had a national referendum on the President’s policies, including raising taxes on the wealthiest. Americans are pretty comfortable with that. Ohioans are too.
“There are smart elected officials from both parties who want to solve problems for Ohio,” she said. “We’ve got to have a conversation in this state about who we want to be.”
This Thanksgiving, we can and should contribute to the local institutions that do such wonderfully efficient jobs of providing holiday meals — and essential human contact — to people who otherwise might not get either.
But we also need to resolve to make our economy work better for everyone who participates productively in it — not just during the holidays, but every day of the year.
Have a bountiful Thanksgiving.
David Kushma is editor of The Blade. Contact him at: firstname.lastname@example.org