Monday, July 12, 2004

Kerry on the Economy

The third chapter of Kerry's book is entitled " The Challenge of Expanding our Common Wealth." As economics is a topic that I personally find quite dreary, I must confess that there may be some really meaty stuff in this chapter that I simply skimmed over. Here's a good summary of what he calls the "mainstream principles that can and must power our engines of economic growth;"

- Economic growth is built on the talent and hard work of all our people, not just wealthy elites.

- Both private and public investment play a role in building the infrastructure for growth.

- Government must ensure a fair and honest marketplace for business competition, labor-management cooperation, and investors with enforceable standards for integrity for financial and accounting systems and corporate executives.

- The progressive system of taxes, which distributes the burden of self-government in proportion to the ability to pay, can and should be maintained without discouraging enterprise or wealth.
-A Call
, pp. 67-68.
He expands each of these points in this chapter. An additional issue which he brings up is the current tendency of the feds to shift much of the financial responsibility for federal programs over to the states, which seems contrary to one of the principles of the Republican party; a "respect for the role and capacity of state governments."

One paragraph did leap out at me in this chapter, as it addressed an issue that I do know something about;

Republicans often claim that increasing the minimum wage is a job killer, a burden that business cannot afford. What they won't acknowledge is that the rising living costs constantly erode the purchasing power of minimum wage. In fact, you'd have to raise it to $8.14 an hour to give workers the same purchasing power they had in 1969. I believe that the proposal many of us have sponsored in the Senate - to increase the minimum wage to $7.00 an hour - is a modest and reasonable compromise. Then we should index the minimum wage to inflation so that purchasing power is maintained and so that families struggling to get out of poverty don't have to wait for another fight in Congress just to maintain the most basic standard of living.
-A Call
, p. 76.
A few years ago, I hung up my collar and explored other vocational paths. One of these paths led me to being a staff member at a "transitional living center." This is a fancy name for a long-term homeless shelter. Our focus was on women and families. We only accepted those who were employable. Those with mental health or substance abuse issues were referred to other programs. One of our requirements was that each resident be fully employed within thirty days of entering the program. To accomplish this, I taught an employment class. A part of this class was to help the residents see that taking a full-time minimum wage job was not going to solve their problems. Some basic math makes this clear;

Let's develop a survival budget; just the essentials to function daily in this society for one month;

700 rent
100 utilities (telephone is optional; this is for electricity and heat)
300 food (depending on the number and age of children, this may be low)
100 transportation (public; a car would triple this number)
1200 total

If they are making Kerry's recommended $7.00 an hour, and working 40 hours a week, their monthly income would be, before taxes, $1,260 (7 x 40 hrs. x 4.5 wks. = 1260). Note that the above budget is already in deficit once taxes are taken out, and does not include childcare, medical needs, or a clothing allowance.

One of the critical ways to alleviate poverty in this country is to pay workers a living wage, which I would suggest is a minimum of $10.00 an hour, but more realistically in the area of $12.00 an hour. John Kerry is at least moving in the right direction by insisting that the minimum wage be raised, and connecting it to the actual cost of living. For that he has my support.

To be continued...


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