Harry Targ
“…more than 1 in 5 children live in poverty and 47 percent
are low-income (more than all neighbor states, including Kentucky); more than 1
million Hoosiers over the age of 18 are in poverty and 2.24 million are
low-income; more than 70% of Hoosier jobs are in occupations that pay less than
200% of the Federal Poverty Guidelines – that’s less than $39,060 for the same
family of three referenced in their report (a single parent with two children);
we have a larger share of jobs in occupations that pay at or below poverty
wages jobs ($19,530 for a family of three) and jobs that pay at or below
minimum wage than all neighbor states, including Kentucky; and wages have declined
for lower- and middle-income Hoosiers over the past decade, while worker
productivity has soared.” (Derek
Thomas, “Cato Study Disingenuously Presents Molehills as Mountains,” Indiana Institute for Working Families,
August 23, 2013).
Mitch Daniels, two-term Governor of
the state of Indiana (2004-2012) and current President of Purdue University has
been making presentations before conservative think tanks, business groups, and
national television audiences. Often groups hosting Daniels are trumpeting
Indiana as a model of inexpensive, efficient, and sophisticated government.
For example, Daniels, who promised
he would not be “political” when he assumed the presidency of Purdue
University, spoke before the Center of the American Experiment, Monday, October
7, 2013. The Center proclaims it wishes to shift political discourse in a
conservative direction: right-to-work legislation, lower taxes, and
“traditional American values.” And Daniels was invited to speak presumably
because the Center believes Indiana is “leading the way when it comes to taxing
less, spending less, but doing government better.” (Hayleigh Colombo,” Politics
Hover as Daniels in Minn.” Journal and
Courier, October 8, 2013).
Politicians
and conservative think tank spokespersons especially have been misrepresenting
the history of economic performance in the United States.
Huffington Post reporter, Mark Gongloff reviewed a recent study of income
inequality in the United States by economists Facundo Alvaredo, Anthony B.
Atkinson, Thomas Piketty, and Emmanuel Saez. The top one percent of income
earners doubled their share of income since the 1970s to 20 percent. Growing income inequality in the United
States since 1960 is significantly greater than all developed countries. U.S.
income inequality is bested only by Chile, Mexico, and Turkey among all
nations.
Gongloff attributes growing income inequality in the
United States to long years of reduced taxes for the rich and financial
deregulation. “The same politicians that have busily been slashing taxes on the
wealthy have also been loosening fetters on banking, allowing the financial
sector to swell to bloated size and mop up ever-more income while contributing
ever-less back to the economy.” (Mark Gongloff, “The U.S. Has the Worst Income
Inequality in the Developed World, Thanks to Wall Street: A Study” Huffington Post, August 15, 2013).
Indiana is one example of a state in which local
economic trends mirror the accumulation of wealth on one side and poverty on
the other. In fact, Indiana has been one of the worst states in terms of
providing for its population. Almost 16 percent of the state’s population lives
in poverty, including over 22 percent of its children, 17 percent of women, 33
percent of African Americans, 29 percent of Latinos, and 25 percent of Native
Americans. One third of Indiana residents are low income and for a decade have
experienced a decline in median household income. Even with a recent slight
decline in the rate of poverty, the number of low income Hoosiers has risen
since 2011. (Indiana Institute for Working Families, 9/19/13; cited in “Slight
Decrease in Poverty Offset by Increase in Low-Income Hoosiers,” Lafayette Independent, October, 2013).
In an illuminating series on “The Unequal State of
America: a Reuters Series,” by Deborah Nelson and Himanshu Ojha, December 18,
2012, www.reuters.com/subjects/income-inequality)
the authors report on state-by-state trends in the U.S. economy from 1989
through 2010. Among their findings are the following:
*Inequality has increased in 49 of 50 states,
including Indiana.
*The poverty rate increased in 43 states, most
sharply in Nevada and Indiana.
*In all 50 states, the richest 20 percent of
households made the greatest economic gains of any quintile.
As to tax policy over the last several years, the
rich were the main beneficiaries. Nelson and Ojha cite a Tax Policy Center
finding “…that two-thirds of the tax savings would go to the top quintile of
households and 1 percent to the lowest quintiles in 2012. In dollar savings,
that’s $371,000 for the top 0.1 percent of households in 2012, $958 for the
middle and $66 for the poor.”
So we must remember that when politicians (whether
they are currently in office or using other visible institutional positions
such as Purdue University President Mitch Daniels) warn of the need to “cut
entitlements” to reduce “unbridled spending,” and advocate tax cuts,
deregulation, and down-sizing government, they ignore the impacts such policies
have had on the majority of the population of the country. Think tanks such as
the Center of the American Experiment are advocating policies that enhance the
wealth and income of the superrich at the expense of the vast majorities.
