How You Can Start and Operate a Soup Kitchen

Mission Possible: How You Can Start and Operate a Soup Kitchen

Gov. Christie needs to modulate his 'pedal to the metal' approach

New Jersey Newsroom
By Irwin Stoolmacher

The income distribution gap in America is growing and will become even more pronounced if the Republican Party’s latest assault on working people is successful. Without collective bargaining employees will see their wages/benefits reduced dramatically over time, further increasing our nation’s growing income disparity, which is more unequal than various Latin American counties.

Make no mistake about it; the Republican Party’s attempts to eliminate collective bargaining will further exasperate what Paul Krugman has described as the “Great Divergence.” Labor unions have for decades been a force for egalitarianism in America. As Bill Bradley wrote in his memoir, “the labor movement has contributed to America becoming a more humane, democratic place.” By raising the wages of working people they served to reduce income disparity in our nation. At one time even business viewed them in that manner. The head of the U.S. Chamber of Commerce in 1954 made the following statement with regard to labor unions’ positive effect on the economy: “Labor unions are woven into our economic pattern of American life, and collective bargaining is part of the democratic process.”

Limiting collective bargaining is, one of many, strategies that Republicans have employed to further the disparity of financial assets in this country. They have also aggressively lowered the income tax rate of America’s top wage earners. When Ronald Reagan was elected the top bracket stood at 70 percent, where it had been since the Great Depression (for most of the ‘50s and early ‘60s it exceeded 90 percent). Reagan slashed the top rate from 70 percent to 50 percent, and eventually succeeded in getting it down to 28 percent. Since then, it has been in the 30-40 percent range. Note President Obama, in a move that angered liberals like me, agreed to extend the George W. Bush tax cuts to the roughly two percent of highest-earning Americans. The top rate will remain at 35 percent for another two years.

Further, Republicans have contributed to the income chasm by refusing to adjust the minimum wage to changing times. The minimum wage remained at $3.35 per hour for both of Reagan’s terms and at $5.15 per hour for both of George W. Bush’s terms. Another key strategy Republicans have employed to further the divergence is deregulation. Consistently deregulation has resulted in astronomical salaries for the higher-ups in the FIRE Sector (finance, insurance and real estate industries).

By denigrating and demonizing public employees, Republican Governors, like Scott Walker, are attempting to create an artificial divide between public employees and private sector employees. This strategy is designed to pit workers against one another thus deflecting attention away from the growing income divergence that is creating a two-tier society.

All this said, I recognize that we can’t continue to pay for overly magnanimous health care and pension packages that were granted by both political parties to public employees. They were too generous and the current economy will not generate the revenue to fulfill all the promises made. Some trim-backs is necessary. When revenues began to plummet Governor Corzine should have made it clear to public employees that the “times had changed” and that equitable shared sacrifice was needed. Governor Corzine and Republican legislative leaders did too much kowtowing to public employee unions.

It might have been expected in an era where unprecedented job losses and decimated retirement ‘nest eggs’ have panicked many hard-working individuals, that a Governor such as Chris Christie would have great appeal. His approach to budget balancing is to blame the budget deficit entirely on public employee rather than to equity balance the burden. While talking shared sacrifice he has refused to renew a tax on millionaires in New Jersey that would raise about $600-$800 million (in spite of a recent study in the June issue of National Tax Journal that the increase in income tax on individuals earning more than $500,000 had virtually no effect on the rate at which the wealth left the state, but did reduce income inequity). He reduced the state’s earned-income tax credit by 20 percent for the state’s low to moderate income working individuals and provided a wide range of tax cuts and benefits to businesses. What we have in New Jersey is “targeting of public employees” and “trickle-down economics” at its worst.