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June 3, 2004

The income gap

Just before his assassination in 1968, Martin Luther King, Jr. had begun to organize the "Poor People’s Campaign." After the Civil Rights Act was passed in 1964, Dr. King realized that the most pressing issue facing America was the plight of the poor. Unfortunately, that still remains the case today.

For most fair-minded people it is unacceptable to have a large number of poor people in the United States, the world’s most highly developed economy. Those who would have us be insensitive to the plight of the poor insist that the poor are simply reaping the consequences of their sloth or the bad decisions they have made in this, the land of opportunity.

However, many of the poor work very hard. A recent report indicates that one of every four workers earns $18,800 a year or less, and few have any job benefits. That income marks the federal poverty line for a family of four. Those concerned with the welfare of African Americans will be distressed to learn that 14 percent of the working poor are black. But that fact by no means makes this a special race issue.

More than 28 million people between the ages of 18 and 64 earn less than $9.04 an hour. On a full-time basis, this would come to $18,800 a year. While 14 percent of this group is African American, 58 percent are white and 22 percent are Latino. Some of these wage earners avoid poverty because they are young and live at home; others may have spouses who earn enough to lift their families from the poverty category.

Nonetheless, escaping the blight of poverty does not greatly increase the chances that the family will be living on easy street. The average household income for families in the third quintile from the bottom is $42,802. Forty percent of all households average substantially less than that level of income. And it usually takes the income of more than one family member to attain the higher levels of income.

The Boston organization United for a Fair Economy has issued a report recently to point out the growing income disparity in the United States. The CEOs of major companies are now paid 301 times the pay of the average worker. The average CEO gets $155,769 a week compared to $517 for the average worker.

This disparity has grown enormously since 1982. Then CEOs earned only 42 times the pay of the average worker. Since 1990 the pay of the average worker has increased only 8 percent more than the rate of inflation — 49 percent to 41 percent. However, the pay of CEOs rose 313 percent.

One solution to the problem is to raise the minimum wage from $5.15 an hour to $7.00 as proposed by Sen. Edward Kennedy. When adjusted for inflation, the present minimum wage is 30 percent less than it was in 1968.

Another solution is to raise federal Pell Grants for education. In 1972, Pell Grants covered 84 percent of college tuition. Today they pay for less than 40 percent. College education, even in state colleges, is out of reach for many students from poor families who want to increase their opportunities through education.

Of course there are a number of other problems such as Medicaid, day care, Social Security and job training which must be resolved. All of the solutions are political in nature. Unfortunately, only about 40 percent of low-income Americans vote, compared to 74 percent of the affluent. Dr. Martin Luther King recognized that a coalition of the poor when motivated could change the political landscape.

It is imperative that black leaders deracinate the war on poverty so that everyone, regardless of race, feels welcome to participate. The political benefits to be achieved will fall equally on everyone, just like the warming rays of the sun.

 

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