Rich/Poor Income Gap Widening To Chasm

Evidence Shows Impact On Those At Lower End Of Wage Scale Continues To Grow

(CBS)  There have always been "haves" and "have-nots" in the United States, but over the past three decades, the gap between them has gotten a lot wider, statistics from congressional numbers crunchers show.

According to the non-partisan Congressional Budget Office, income for the bottom half of American households rose six percent since 1979 but, through 2005, the income of the top one percent skyrocketed - by 228 percent.

And, correspondent Benno Schmidt reported in The Early Show's "Early Wake-Up Call" Saturday, the impact of the growing disparity on the "have-nots," and even on small businesspeople, is being felt more and more.

Schmidt visited Adam Rames who, after 35 years, is saying goodbye to the only way of life he's known - his formerly thriving meatpacking business in New York City.

"I used to feed a lot of families," Rames told Schmidt. "I feel like I took care of the entire East Coast (with meat)!. I used to move 100,000 pounds a week. It's all gone."

Rames says he couldn't pay the rent when it tripled, couldn't pay pensions and retirement for the 15 workers he had to let go, couldn't keep up with gas and fuel prices, and couldn't afford supplies.

"In the past 16 months, I lost 40 percent of my business," he laments.

Now, he's headed for the unemployment line - and he's not alone.

This, while an upscale hotel goes up in his business' neighborhood.

Generations of working-class Americans came to that area of lower Manhattan to realize their dreams, Schmidt points out, and the meatpacking district is still thriving, but in a very different way.

Trendy boutiques hawk $7,000 jackets and $400 jeans made to look worn and old. Apartments trade for millions of dollars. Record oil profits and record Wall Street bonuses have driven out many who wonder where their tax breaks are.

A hard-hatted worker remarked to Schmidt that his money doesn't go very far in today's economy, and he lives paycheck-to-paycheck.

Many, Schmidt observes, can't understand the two economies: one for them, another for the super-wealthy or conglomerates.

Things are certainly "out of whack, out of balance for a lot of workers," New York Times reporter Steven Greenhouse, author of "The Big Squeeze: Tough Times for the American Worker," told Susan Koeppen on The Early Show Saturday.

"A lot of people think it's just them," he continued, "just you suffering from stagnant wages, but it's happening to millions of workers. It's happening for many reasons.

"One is globalization. Companies can move operations overseas, which helps them increase profits. Yet it also helps hold down wages for American workers. A second thing is there's pressure by Wall Street for companies to get their stock prices and their profits up, and that often causes them to push down wages.

"A third factor is that unions have become much weaker, and they don't have as much leverage on companies to increase those wages quickly. Another factor is health costs are soaring, and they're eating up part of the money that would normally go to wage increases."

"Many companies and investors on Wall Street," he explained, "want CEOs to maximize profits, maximize share prices, and that often translates into laying off people, downsizing, trying to reduce wages, trying to reduce benefits. So, unfortunately, too often the interests of Main Street and Wall Street are opposed."

About 70 percent of the economy is based on consumer spending, and that's presenting another problem, Greenhouse say: "What we're seeing now is gas prices soaring and debt levels soaring - a lot of Americans are not going out and buying so-called discretionary items like cars and flat-screen TVs, because people have to concentrate on buying food for their families and paying for health insurance and paying for utilities. So, right now, a lot of retail stores are hurting, and in turn, that's hurting a lot of American manufacturers.

"It's not unique to the United States because right now, worldwide, fuel prices are soaring. So, in Europe, in Japan, and the United States, consumers are feeling the squeeze. I think there's more inequality in the United States between the top and the bottom. It's not nearly as bad in Europe, (and) I think the people on the bottom and even in the middle here in the United States are being squeezed worse than in many other countries."

What can be done about it?

Possible remedies, Greenhouse says, include enrolling more low income students in college, increasing pay for lower-wage union workers, and revitalizing the manufacturing base.

"A little-known secret is that, over the past seven years, the United States has lost one in five manufacturing jobs," he said. "Those are usually jobs that pay good wages, middle-class wages, usually provide middle-class benefits on health and pensions, and the United States seems not to be paying attention to this huge problem that has lost 3.5 million manufacturing jobs, and I think the government and industry have to work together to figure out how to preserve jobs."

To read an excerpt of "The Big Squeeze," click here.

[txgrouch2004]

WarDogLRS wrote
This whole thing with the economy was predicted by Dr Paul long ago
---------------------
And Ross Perot predicted the GIANT SUCKING SOUND of jobs leaving the country due to NAFTA.

But the Clintons say THEY DIDN''T KNOW that would happen.

Perot and Paul never said anything that everybody''s conservative Dad hadn''t been saying for 20 years before that.

WHEN WILL WE EVER LISTEN???

[txgrouch2004]

Just read elsewhere that homeowners have started "walking away" from their homes as the house value drops below the balance due on the home mortgage.

THIS IS NOTHING NEW. ALL OF THIS HAPPENED IN THE 1980''S. That''s when Adjustabe Rate Mortgages got a bad name - BACK IN THE 1980''S.

But THANKS TO THE CLINTON ADMINISTRATION DEREGULATING THE HOME LOAN INDUSTRY, they started back with ARM''s and more - NEGATIVE AMORTIZATION LOANS with payments GUARANTEED TO INCREASE even if interest rates don''t.

You can''t blame the young, eager home buyers. They hadn''t lived through it the last time. BUT THE LENDERS DID. THE REGULATORS DID. But they decided to INFLATE THE CLINTON BUBBLE FASTER with unrealistic home purchases when the regulators SHOULD HAVE KNOWN BETTER.

I work in a different part of the financial world. The suitability rules we have to follow are designed to protect the customer. I had a real estate sales license. The fiduciary rules in that industry are comprable - very strict. Your job is to PROTECT THE CUSTOMER, even when the customer doesn''t know better.

WHAT HAPPENED TO THE RULES IN THE HOME MORTGAGE BUSINESS? They used to have similar rules. CLINTON TOOK THE RULES AWAY, and now we have the mess we see today.

THE SAME MESS WE SAW 20 YEARS AGO.

Will we ever learn?

[wardoglrs]

This whole thing with the economy was predicted by Dr Paul long ago. I suggest a little research on his writtings, The man is very strong on economics Freedom and Liberty issues. If you cant see what the goverment is really up too before the elections then when you find out the truth you can blame yourselves.

Possible remedies, Greenhouse says, include enrolling more low income students in college, increasing pay for lower-wage union workers, and revitalizing the manufacturing base. ===============

Any candidate with a comprehensive plan here? Enrolling more low income students in college takes $$ to cover tuition, books, fees, housing, energy, food, AND faculty and facilities and libraries AND more energy and construction, etc. to make it happen. Maybe Hillary will resurrect the NDEA that made her career possible? Obama would probably want it to be affirmative action, ala Michelle''s opportunity, so that would leave out a lot of "those other people" who happen to live in this country, too.
McCain? Bush hasn''t told him yet. But if he could work the ROTC into it, he''d be for it, I bet.

[Syndicate]

I wonder how much income rose for the top fifty percent or how much it rose for the bottom 1 percent. Well I''m somewhere in that top fifty. Since 1979 when I was 3 my income has risen a lot. I follow the automotive industry. A lot of the jobs lost there have been lost to robots. There will not be a single manufacturing job in the world in fifty years.

[mcvet]

Give me MORE!! 4 MORE years of Fascist Rule and maybe I qualify for Third World Assistance from Canada!! Sieg Heil Bush!!

[Razzl]

Well, at least the mortgage crisis is throwing some of the idle rich back into the labor pool to swim with the rest of us...

[payasyougo]

The Republicans, specifically, are not the cause of all these problems. Neither are the Democrats. The problem is what our current polictical system has morphed into. It''s the government for the PACs. The government for the highest bidder.

Take real estate right now. A 7.5 or 10K tax credit for first time homebuyers. Gee a nice thought but really, look at who really benefits. The builders and the real estate agents and the banks that lend. And who are they collecting taxes from to pay for these freebes?

This is ***. I can understand the Democrats wanting to redistribute wealth - it''s expected and if people want to vote for that it is a free country. But the conservatives introducing this kind of legislation - there is no excuse.

Both Democrats and Republicans are introducing legislation to benefit their contributors.

You and I, the taxpayer, will be stuck with the bill years down the road.

This has to stop.

When do the working public get their government "for the people" back?

[ianlou]

I haven%u2019t seen a Bush approval rating score lately.
is it still at 27% = 10% rich, 10% evangelical fanatics and 7% redneck morons?

[ianlou]

"A little-known secret is that, over the past seven years, the United States has lost one in five manufacturing jobs," he said

A LITTLE KNOWN SECRET?!?!?
The idea that Michigan%u2019s loss of 100,000 auto manufacturing jobs is a %u201Clittle known secret%u201D is like considering the damage in New Orleans from Hurricane Katrina %u201Ca little known secret"

As the rich get richer and the middle class and the poor get poorer we should all remember that when a ship sinks the third class (steerage) passengers drown first but first class is not far behind.

Want to screw those who are *** you? Only one way they care about; Buy as little as possible until a real change in direction takes place.