Monday, June 3, 1996
Raise the minimum wage and cut corporate subsidies to reduce
wealth inequalityBy Chuck Collins and Felice Yeskel
Political leaders and pundits are finally waking up to the
growing economic insecurity that more and more Americans are
feeling. But do they have any real solutions?
To listen to the radio, one would think that growing economic
insecurity and inequality is terrible, but there is nothing we can
do about it. It’s as if it were caused by some natural phenomenon,
like sunspots. This ignores that economic insecurity is the bitter
harvest of a generation of public policies and corporate practices
that have been more concerned with enriching the wealthiest 2
million Americans than building security for the bottom 200
million.
So what can we do? The majority of the 104th Congress is not
concerned about growing insecurity and inequality in America. In
fact, all of their proposals  flat taxes, cuts in capital
gains, reductions in the inheritance tax and cuts in programs
helping low and moderate income citizens  will only worsen
inequality.
A national coalition of over 200 labor and community
organizations has been working to advance policy proposals that
begin to restore balance in our economy. They have been pushing
initiatives to cut "corporate welfare," boost the minimum wage and
rein in excessive salaries.
Cut Corporate Welfare. Citizens for Tax Justice estimates that
over $250 billion a year flows in unproductive subsidies to
America’s wealthiest corporations and individuals. The House
Progressive Caucus recently introduced the Corporate Responsibility
Act (HR 2534) which would eliminate over $800 billion in corporate
welfare over the next seven years.
Corporations like McDonald’s, Sunkist and American Legend Fur
Coat would no longer line up to eat at the public trough. Here are
a few other examples:
* The Mansion Subsidy. Home mortgage interest currently is
deductible up to $1 million a year, leaving average taxpayers to
subsidize multi-million dollar homes. Reducing the limit to
$250,000 would save us $10 billion a year.
* Mining Subsidies. The United States lets big mining companies
pay peanuts for the use of federally owned lands  our lands.
An 8 percent royalty would earn $200 million a year.
* The Runaway Shop Subsidy. The government provides tax
subsidies to corporations that expand their operations overseas and
deduct foreign taxes from what they owe the United States. Closing
this loophole would save billions as well as discourage runaway
companies.
* McSubsidies. $110 million a year goes directly to companies
that advertise their products abroad. Beneficiaries include
McDonald’s and Mars Candy.
At a time when Congress is cutting lifeline programs to support
children and the elderly and to protect the environment, it is
outrageous that billions in subsidies continue to flow to those who
need them the least.
A Livable Wage Linked to Cutting the Chief Executive Officer
Subsidy. The federal minimum wage should be raised to at least
$6.50 per hour, which is essentially what it was worth in 1967
before inflation. But we need to do more than boost the minimum
wage. We need to reintroduce the principle that in the United
States there should be a relationship between top and bottom income
earners.
Profits have been skyrocketing. Productivity is up. The Dow
Jones increased in value 33 percent in 1995. Chief executive
salaries have mushroomed. Yet low- or middle-income wages are
stagnant or declining. This scandalous gap between highest and
lowest paid workers should be directly addressed. If the ceiling is
rising  so should the floor. America needs a raise.
The Income-Equity Act (HR 620) is a federal bill that will boost
the minimum wage to $6.50 per hour while denying corporations the
right to deduct compensation as a business expense which exceeds by
25 times the lowest paid worker in a firm. No longer would
taxpayers have to subsidize the bloated salaries of chief
executives and the damage they sow in our communities.
One group that has been working to reduce income and wealth
inequality is United for A Fair Economy and its action arm, Share
the Wealth. Founded in 1994, Share the Wealth provides popular
education programs and organizes information on issues of income,
wage and wealth inequality. In the last year, over 9,000 people
from trade unions, religious congregations and community groups
went through their workshop, "The Growing Divide: Inequality and
the Roots of Economic Insecurity." They co-publish the newsletter
Too Much, which is available to members. Membership is $25 per
year. Contact them for an organizing kit on these and other
initiatives to change the rules governing the economy so that they
serve the interest of all Americans, and not just the wealthy.
For more information, contact: Share the Wealth, 37 Temple
Place, Fifth Floor, Boston, MA 02111; (617) 423-2148 or e-mail:
[email protected].
Collins and Yeskel are codirectors of Share the Wealth.
The majority of the 104th Congress is not concerned about
growing insecurity and inequality in America. In fact, all of their
proposals … will only worsen inequality.