A sense of where we are

A specter is haunting the US - the specter of class warfare. The thing that "no American wants," we're told by every talking head pundit that isn't busily denying that we are a class society at all. "Social mobility," the latter intone, noting how frequently a family might, based on income, move from the upper reaches of the second-poorest fifth of the population to the bottom layer of the middle fifth or dip from the wine cellar of the richest fifth to the penthouse of the second-richest fifth, or even, for the most audacious tale-spinners among them, waxing poetic about some rags-to-riches saga, jump from the hoi polloi to the high and mighty in one go - and all maintaining with wide-eyed, well-practiced, sincerity that these are typical and altogether relevant examples of actual day-to-day experiences of American families.

But there are three truths here: First, the "class warfare" of which they speak is derided not because it is either unnecessary or inadvisable but because they fear it, fear it deeply, spend every day wondering if this will be the day it will break out. Second, that same "class warfare" would better be described as a "counter-insurgency" because third, there has been - as I'm hardly the first to note - a genuine class warfare going on for some time: a war of the haves against the have-nots, the upper-dogs against the underdogs, a war not of the rich against the poor but of the rich against the rest, and a war mostly unremarked on because those in the best position to remark on it are for the most part those who benefit by the prevailing silence.

So herewith, a few observations on how goes the battle. For the home team (that's us), things are not looking so good.

Even with a robust economy that was adding jobs last year, the number of Americans who fell into poverty rose to 37 million - up 1.1 million from 2003 - according to Census Bureau figures released Tuesday.

It marks the fourth straight increase in the government's annual poverty measure.

Nearly 6 million more Americans live in poverty than in 2000, the last year that showed a decline. Nearly a third of the poor are children. And in case anyone was wondering if this was merely an effect of overall population growth, the increase was seen in percentage as well as in numbers: 12.5% in poverty in 2003, 12.7% in 2004.

The rest of us were having our own struggles: Median household income was unchanged from 2003, which with an inflation rate of about 2% (January 2003 - January 2004) means a 2% loss in real income. And the number of people without health insurance grew from 45 million to 45.8 million last year, about 15.5% of the population. The only reason that increase was not significantly bigger was because of, according to Charles Nelson of the Census Bureau,

an "increase in government coverage, notably Medicaid and the state children's health insurance program that offset a decline in employment-based coverage."

(Some sources gripe that the number without health coverage is inflated because it includes those who were without insurance at some point during the year. The number who were without coverage for the whole year may be as many as 9 million less. Well isn't that precious and very comforting to all those struggling people who can plan in advance when they'll get sick or have a health emergency to make sure it's at a time when they have insurance which isn't limited by a pre-existing condition clause arising from a gap in coverage.)

Some analysts were apparently surprised and disturbed by all those numbers. The issue was not even so much the figures themselves, but the fact that

[t]he increase in poverty came despite strong economic growth, which helped create 2.2 million jobs last year - the best showing for the labor market since 1999. By contrast, there was only a tiny increase of 94,000 jobs in 2003 and job losses in both 2002 and 2001.

That is, relatively high poverty is persisting over time even in the face of a supposedly improving job market. We're seeing a "generation of no progress," in the words of Sheldon Danziger of the National Poverty Center at the University of Michigan, who said that

"[s]omehow, we have to confront the fact that ... a rising economy no longer lifts all boats."

The right wing, of course, is having none of it.

"America looks like a giant jobs machine still," says Douglas Besharov, director of the American Enterprise Institute's Social and Individual Responsibility Project.

That may even be true. But how important is it? What's not being addressed in the attention to the job market is that the number of jobs alone is by no means an adequate measure of economic health, nor is it by itself an indicator of opportunities to escape poverty. What kinds of jobs are being created? Are they regular, full-time? (An increasing number aren't) Do they pay enough to support a family? (An increasing number don't.) Do they have benefits, particularly health insurance? (Again, for an increasing number the answer is no.)

What's more, the actual poverty rate might be significantly higher.

Developed in the 1960s, the poverty level is determined by the amount required to feed a family. But while food has become a less important expenditure for today's families, costs for things like childcare have gone up.

Along with rent, clothing, fuel, and the like - not to mention healthcare for those increasingly constricted by state Medicaid cuts. On the other hand, just to lighten the mood for a moment, we have one of those laughable bits of corporatist inconsistency that keep cropping up where they say A here because that's useful here and B there because that's useful there, even though A and B are flatly contradictory.

Conservatives ... point out that the rate might be inflated because it doesn't include non-cash benefits like food stamps or housing assistance.

Which means they are crediting the very same kind of "wasteful, useless, inefficient" government programs they like to gripe are just "throwing money at the problem" with significantly reducing poverty below what it would otherwise be.

One "problem" the corporatists don't shy away from throwing money at is the terrible, terrible difficulty of getting and keeping good quality top executives. Even as they pompously lecture on the need to nickel and dime their employees in order to "contain costs" and so "remain competitive," they wail and moan abut how tough economic life is at the top and how what they get is a mere pittance in light of their unreachable heights of importance to the bottom line. But frankly, compared to the home team, the visitors (because they really are so separated from the rest of us that they may as well be aliens) seem to be managing to struggle through. CNN/Money for August 30 had the (for them) good news:

In 2004, the ratio of average CEO pay to the average pay of a production (i.e., non-management) worker was 431-to-1, up from 301-to-1 in 2003, according to "Executive Excess," an annual report released Tuesday by the liberal research groups United for a Fair Economy and the Institute for Policy Studies.

In 1982, at the outset of the Decade of Greed, the average CEO made "only" 42 times as much as the average worker. By 1990, that ratio had reached 107-to-1 and by 2001 had skyrocketed to a breathtaking 525-to-1 before falling back some. As one means of comparison, a military general with 20 years experience makes less than seven times what a private drawing combat pay does.

As another means of comparison, the report, available in full at this link in .pdf format,

compares the growth in average CEO pay - which was $11.8 million in 2004 - to the growth in the minimum wage. Had the minimum wage risen as fast as CEO compensation since 1990, the researchers calculated, it would now be $23.03 an hour instead of just $5.15. And the average production worker would be making $110,126 a year instead of $27,460.

In some ways, though, comparing the compensation of a company chief to the average non-management worker is a specious argument, said Nell Minow, editor of the Corporate Library, an independent investment research firm providing data on corporate governance and risk.

"I'm willing to pay people based on the value they create," said Minow....

Okay, then answer me this: We supposed to assume, at least for the sake of comparison, that a little over 20 years ago the average CEO produced 42 times more value for the company than the average worker. Are we really supposed to believe that that disparity has increased by more than 10 times in the intervening years? Are we really supposed to believe that the average CEO produces 430 times as much value as the average worker? Anybody, are we? Really?

Well, in that case, what I want to know is, just what "value" does a CEO actually produce? Seriously. What "value" does a CEO produce that is demonstrably separate from the value produced by the people on the shop floor who actually run the machines? By the people on the road who actually sell the products? By the people who take the orders, process the orders, pack the orders? Which do you think is more realistic: A business run by its employees or members (i.e., a cooperative) or a bunch of CEO's making coffee, answering phones, counseling clients, and running drill presses?

But I'm sorry, I'm being impolite. I'm even verging on - gasp! - class warfare. Better to close with Sheldon Danziger's attempt to look on the bright side. "The good news," he said, "is that poverty is a lot lower than it was in 1993." And what's more, we've discovered that your brain tumor is not inoperable: It will only require a lobotomy.