Tell
Ann Romney that a middle-class wage in 2012 is $45,000 a year after
taxes, but 50% of all U.S. workers earn less than half that before taxes.
In the Old Days
Since first being established at 25 cents an hour by FDR in 1938 under the Fair
Labor Standards Act, the federal minimum wage has been raised only 22 times
since then. Today the Republicans want to abolish it.
Over sixty years ago, during and after World War II, one could leave their
rural community and obtain a government job (civilian or in armed service) and
earn a decent living. Since then, "government" was, and always has
been, America's
single biggest "job creator". (Yes Speaker Boehner, government does
create jobs.)
Or they could have left the family farm and moved to the big city and found
work paying good wage in a mill or factory, without even having a high school
diploma.
In 1952 the president of Jones
and Laughlin Steel Company complained that the cost of the union's wage
and benefit package was $1.08 an hour (or $2,246 a year). The average
median salary at that time was $2,992 a year during the 1950s, when the U.S.
population was half of what it is today. By that time the minimum wage had risen
to $0.75 an hour.
J & L Steel (known to its employees as simply "J &
L") provided the most competition to the Carnegie Steel Company in
the Pittsburgh vicinity. Back in those days a man could go to work at the local
steel mill and provide a decent living for his family of four while his wife
stayed home to raise their children. (Yes Mrs. Romney, the wife could afford a
"choice" to be a stay-at-home mom.)
What it Costs to Live a Middle-Class Life Now
Today in 2012 the
average mean wage for a steelworker is $24.11 an hour, or $50,160 a year --
about what a typical teacher, fireman, or police person might earn.
That's because they are represented by unions, and their wages have kept pace
with the rising cost of living over the past sixty years. They also maintained
their family healthcare plans that were provided by their employers. They're not
over-paid as the Republicans like say, they're just earning an average and
comfortable middle-class living....like most of us did back in the 1950s.
In 2012, it costs at least $45,000 a year (after payroll taxes) to meet the
minimum cost for a typical American middle-class family of four, living in an
average home, in an average neighborhood, and driving average cars.
A typical monthly budget might look like this:
That would equal $45,000 a year, which would be needed AFTER payroll taxes are
deducted. That does not include emergency savings for repairs, clothes,
entertainment, or a savings account for retirement and college. If the spouse
also works, babysitters or daycare expenses would be deducted from those
additional earnings.
$45,000 a year equals $21.63 an hour BEFORE payroll taxes are deducted.
Remember, steelworkers now earn an average of $24.11 an hour (a middle-class
wage).
* High-cost metropolitan areas such as NYC, Boston and San Francisco would be
much higher. You can transpose $150 of the monthly budget from electricity to
natural gas or oil if you use that for heat.)
Prevailing Wages For Average American Workers
Half
the entire U.S. workforce now earns less than $12.67 a hour. The federal
minimum wage of $7.25 an hour is about 1/3 of a middle-class wage of $21.63 an
hour. Last year the
average CEO earned $10.8 million and paid a lower tax rate (15%) than those
middle-class steelworkers, firefighters and teachers (25%). (See
tax brackets and rates here)
As
of the last quarter of 2011, the total median household income was
$52,378 a year (that's just $26,188 per person in a two income
household.)
Last year 50% of all U.S. workers earned less than $26,364 a year (that's
$12.67 an hour) when the
poverty level for a family household of four is considered to be $22,314 a
year (which is a very low government assessment). $22,314 year is about what
Ann Romney spends every year just to feed and care for her favorite horse.
By contrast, for those out of work, the average American collected only $295
in weekly
unemployment benefits ($15,340 a year) which only replaced about a third of
the average worker's previous salary.
If one were working a full-time 40-hour per week job (providing they could find one) and earned the federal minimum wage of $7.25 an hour, they would only be earning $290 a week, or $1,257 a month, or $15,080 a year.
As for retired workers, their average
monthly Social Security benefit was about $1,230 a month at the beginning of
2012 ($14,760 a year).
Disabled workers on
Social Security disability averaged $1,111 a month ($13,332 a year).
At least 8
million unemployment Americas exhausted all their unemployed benefits
without ever finding work again. Some retired early, some became disabled (many
denied SSD benefits), and others moved in with family or friends. Millions now
earn $0 and hour, or $0 a week, or $0 a year --- and now just subsist on food
stamps.
Are these the people that the Republicans are complaining about, who aren't
paying their fair share of federal income taxes, and that they should "put
more skin in the game"?
The poverty level $22,314 a year is only HALF the income needed in
2012 that would be necessary for a family of four to live on for a middle-class
life-style without a spouse who is also working (if they had made a
"choice" to be a stay-at-home mom.). The poverty level of $22,314 a
year would include EVERYBODY who are dependent on unemployment benefits, Social
Security funds, and disability payments.
How can a spouse (a mom or dad) earn $22,314 or less a year and expect a parent
to "choose" to stay at home to raise their children? They can't, and
the don't. Both parents must work to live a middle-class life-style. A
divorce could be financially catastrophic for both parents, and one or both
could end up on welfare and food stamps, just to survive.
The Role of Labor Unions
Union membership exploded during and after World War II, nearly doubling
between 1938 and 1946. It was after World War II that American Exceptionalism
became most valid, when the United States emerged as the advanced, capitalist
democracy. At 35%, the unionization rate in 1945 was the highest in American
history.
A concerted drive by the CIO to organize the South called "Operation
Dixie" failed dismally in 1946. Unable to overcome private repression,
racial divisions, and the pro-employer stance of southern local and state
[Republican] governments, the CIO's defeat left the South as a non-union,
low-wage domestic enclave and a bastion of anti- union politics (which still is
today).
Then, in 1946, a conservative Republican majority was elected to Congress,
dashing all hopes for any renewed post-war New Deals.
The quarter century after 1950 formed a ‘golden age' for American unions.
Established unions found a secure place at the bargaining table with America's
leading firms in such industries as autos, steel, trucking, and chemicals.
Contracts were periodically negotiated providing for the exchange of good wages
for cooperative workplace relations. Rules were negotiated providing a system of
civil authority at work, with negotiated regulations for promotion and layoffs,
and procedures giving workers opportunities to voice grievances before neutral
arbitrators.
Wages rose steadily, by over 2 percent per year and union workers earned a
comfortable 20 percent more than non-union workers of similar age, experience
and education. American wages were higher and growth was rapid enough to narrow
the gap between rich and poor, and between management salaries and worker wages.
Unions also won a growing list of benefit programs, medical and dental
insurance, paid holidays and vacations, supplemental unemployment insurance, and
pensions. Competition for workers forced many non-union employers to match the
benefit packages won by unions, but unionized employers provided benefits worth
over 60 percent more than were given non-union workers.
* Because of outsourcing, we now have a glut of labor, high unemployment,
and lower wages.
In no other country have women and members of racial minorities assumed such
prominent positions in the labor movement as they have in the United States. The
movement of African-American and women to leadership positions in the
late-twentieth century labor movement was accelerated by a shift in the
membership structure of the United States union movement.
The union participation rate has declined in all industries since the
"golden age" for American workers: from 35% in 1945, to 30% in 1970,
to 24.7% in 1980, to 17.6% in 1990, to 11.8%
today. That is the Republican legacy for average American workers, and why
the economy is where is today. (Source)
The Auto Industry at a Glance
Besides the steel industry and government jobs, the U.S. auto industry used
to be one of the best places to work in the 1950s.
GM’s president “Engine Charlie” E. Wilson told Congress in 1953, “What’s
good for America is good for General Motors, and vice versa.” He took home
$586,100 a year when the minimum wage was $0.75 an hour and gasoline was $0.27 a
gallon.
During this time 80 percent of the world’s auto production and assembly was
centered in Detroit. Back then GM
was the world's largest corporation and had 46 percent of the American auto
market. At its peak, the company employed more than 600,000 Americans.
But little by little over the past few decades, instead of exporting their
products, the auto manufacturers (like all other major American manufacturers)
began exporting their factories and our jobs instead. Now American companies
employee people all over the world. Just under George W. Bush alone we've
lost 52,000 factories.
Through NAFTA, we have guaranteed an endless hemorrhaging of our
manufacturing base out of the United States. GM is now the largest employer...in
Mexico. Since 1978, General Motors has built more than 50 parts factories in
Mexico, which today employ 72,000 workers and pays thousands of Mexican workers
between $1 to $2 an hour.
Then GM took their second taxpayer bailout to the tune of $49.5 billion and
received bankruptcy protection in 2009 to cut its costs. (GM's
first big bailout was right after Work War II.)
Auto
workers in the U.S. saw their wages drop by 50% since the auto bail outs.
Longtime auto workers still earn about $28 an hour (a nice middle-class wage of
$58,240 a year before payroll taxes). But GM's
new workers start at only $15.78 an hour, about half the prevailing rate
paid to the company's production employees before the bail out --- which
is about what a GM janitor was once paid in 1980, or a little more than double
the minimum wage today. Yet GM's CEO Daniel F. Akerson is
expected to earn at least $9 million in stock and salary in 2012.
The same for Ford, who didn't even need a bail out, but agreed to
raise the hourly wages of entry-level employees from $15 an hour to about $19. Ford's
CEO Alan Mulally ranked
#1 in auto CEO pay with $29.5 million. Mulally's compensation was up 11%
from 2010 and brings his cumulative take to $148.3 million since joining Ford
six years ago. Some 120,000 Ford employees have lost jobs under Mulally's reign,
and Ford shareholders saw their shares dropped 36 percent last year. So
much for "pay for performance" and "job creators".
Foreign automakers are placing their U.S. factories in the southern states
because of generous tax incentives and anti-union sentiment, presenting a huge
challenge to the once-formidable United Auto Workers. Bob King, president
of the UAW, says "We keep putting more taxes and lower wages on the people
who are working in this nation and keep giving tax breaks to the wealthy,"
he said. "And that will destroy our democracy."
Conclusion
We can look back to the "golden era" of the middle-class, when
rural folks left the farms to work in the steel mills and auto factories. The
Waltons (Wal-Mart) got super-rich from their abundant labor supply of
underemployed and unemployed people living in the rural anti-union south, who
were desperate for employment, when even a minimum-wage job was seen as step up
from rural poverty.
It was nice that Ann Romney had made the "choice" to stay at home
and "work hard" raising her sons, but most average working Americans
no longer have the luxury of a "choice" if they're only earning $15,
$12, $10, or $7.25 an hour. They would need to earn at the very least $25 an
hour to live like a steelworker or autoworker did sixty years ago.
But those jobs went overseas and across our borders, so that American
corporations could pay their foreign workers at factories like Foxconn $1
an hour, while the CEOs could rake in millions every year. And that's a fact.
Yet the Republicans refuse to raise taxes on the CEOs, the rich, and
themselves to help pay down government debt. They want to eliminate the current
$7.25-an-hour federal minimum wage altogether, instead of raising it. The GOP
wouldn't be happier if they could eliminate all labor unions, pay school
teachers and firefighters half as less, lower the corporate tax rate to 0%, and
force those earning only $26,364 a year to "put more skin in the game"
-- and all while the GOP cuts food stamps and TANF for the poor and all of our
Social Security and Medicare benefits.
The Republicans complain about the cost of welfare and food stamps, but their
corporate sponsors (and people like Mitt Romney) forced these people into
poverty to fatten their own wallets. If this is what's called a "shared
sacrifice" by wealthy Republicans, then why would the middle-class or poor
ever vote for a Republican?
That's why our solders in Iraq and Afghanistan kept re-enlisting. They had no
good paying jobs to come home to. Typical
pay in the military for an enlisted 20-year-old E-2 is $37,637 a year
-- or married with two children is $41,021. After four years an E-4 with
a wife and two children is $48,180 a year. A new officer starts at $54,800 a
year. (Pay figures do not included special combat pay, reenlistment bonuses,
allowances, etc.)
Tomorrow the "job creators" will pay all of us $1 an hour, just
like they now do in China and Mexico today, once they make us all desperate
enough for their ridiculously low-paying jobs. Corporate America is turning us
into a third world county. The average "household" will no longer need
two incomes to survive, but will need four incomes at the rate we're
going. A
vote for Mitt Romney is a vote for George W. Bush, but probably much worse.
* The Jones and Laughlin Steel Company eventually merged with Republic
Steel in 1984 to form LTV Steel. In 2002 International Steel Group
purchased LTV. International Steel Group was ranked #426 on the Fortune
500. It was later acquired by Mittal Steel in 2005, and in 2006 it
merged with Arcelor to become the world's largest steel company, ArcelorMittal,
which is headquartered in Luxembourg.