The Skinners

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August 30, 2012
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SKINNERS: Either way, the middle class can't seem to win

HE SAID: Going to Michigan to help our daughter get settled in for graduate school this year has me focused on some of the challenges facing the young. Michigan was the only state to lose population between the 2000 census and the 2010 census.

Although their university system is well known, many historic up and down economic cycles have been focused here. The early timber boom, the Great Lakes shipping and fishing cycle, and the auto industry cycles have added to and then detracted from the economic outlook.

Michigan, like the rest of the country, is struggling to find a way to compete in an environment that has seen productivity, along with the income of the top 1% of the workers soar while the statistics for the low and middle classes show little gain.

A chart in The Atlantic magazine shows that the income for CEOs has increased 240% since 1979, productivity has risen 80%, but overall wages for the rest of us have only risen 10%. The questions facing business decision makers are hard. Shouldn't CEOs who lower manufacturing costs and raise productivity be rewarded? If so, shouldn't the workers who remain be paid for staying productive? How can the highly paid executive succeed without workers who implement his plan? As manufacturing becomes more roboticized worldwide, what impact is that going to have on education and what humans do with their lives?

SHE SAID: I think you have been hanging out with the MBA students too long. You sound like an economics textbook. Let's simplify: The rich are getting richer, and the poor poorer, including those of us in the middle class. A news item caught my eye a couple of weeks ago noting that 26 of the largest companies in the U.S. paid their CEOs more in salary than the company paid in taxes. The report from the Institute for Policy Studies used James McNerney Jr. of Boeing as an example.

He received $18.4 million in wages last year. His company received a tax refund of $605 million. This huge inequity is the result of corporation tax laws passed by none other than the U.S. Congress which has sat on its hands for the last 30 years and let big business lead them by the nose. Just imagine what our town or school district could do with a couple of million from either Boeing's refund or McNerney's salary.

It all has repercussions. Yes, the auto industry is doing better, but it is the luxury car area showing the most growth. Those of us in the middle class are faced with making a decisions about mortgaging our future to purchase a more fuel efficient auto or cope with rising gas prices with making do with what we have and driving less. That's assuming we could qualify for a loan. These are not pleasant decisions.

Clothing, non-nutritious fast food, and other goods are some items that are cheaper than they ever have been, but the price of basic necessities like housing, health care, higher education and gasoline have steadily risen and take much more of our monthly income than ever before. How can the executive be worth more when his employees must spend less?

HE SAID: If you took $2 million from McNerney's salary, I doubt it would ever reach the schools because Congress or the legislature would have to allocate it there. Yet those who support such excessive executive compensation want us to cut taxes even more and spend less on schools, roads and police.

The notion that cutting taxes increases tax revenue was a failed myth of the Bush administration.

Likewise the notion that we can solve all our problems by spending won't work. So, in the end, the middle class gets the shaft without any voice that is rationally focused on the needs of the country.

The Republican's can't do it, the Dems can't do it, and the Tea Party is the harbinger of chaos. We either elect millionaires who stay millionaires or we elect non-millionaires who become millionaires. It's all about power and money and that has been taken away from the middle class. Let's go sit in the garden where at least the energy of nature controls the end result.

SHE SAID: We can see the immediate results of our sweat equity there.

The Skinners hope you can find profit in the pursuit of what pleases you. They can be reached at jlajtls@bresnan.net.


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The Post Independent Updated Aug 30, 2012 05:21PM Published Aug 30, 2012 05:20PM Copyright 2012 The Post Independent. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.