[Senate Hearing 117-33]
[From the U.S. Government Publishing Office]
S. Hrg. 117-33
THE INCOME AND WEALTH INEQUALITY CRISIS IN AMERICA
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HEARING
BEFORE THE
COMMITTEE ON THE BUDGET
UNITED STATES SENATE
ONE HUNDRED SEVENTEENTH CONGRESS
FIRST SESSION
__________
March 17, 2021
__________
Printed for the use of the Committee on the Budget
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
U.S. GOVERNMENT PUBLISHING OFFICE
45-040 WASHINGTON : 2021
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COMMITTEE ON THE BUDGET
BERNARD SANDERS, Vermont, Chairman
PATTY MURRAY, Washington LINDSEY O. GRAHAM, South Carolina
RON WYDEN, Oregon CHARLES E. GRASSLEY, Iowa
DEBBIE STABENOW, Michigan MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island PATRICK TOOMEY, Pennsylvania
MARK R. WARNER, Virginia RON JOHNSON, Wisconsin
JEFF MERKLEY, Oregon MIKE BRAUN, Indiana
TIM KAINE, Virginia RICK SCOTT, Florida
CHRIS VAN HOLLEN, Maryland BEN SASSE, Nebraska
BEN RAY LUJAN, New Mexico MITT ROMNEY, Utah
ALEX PADILLA, California JOHN KENNEDY, Louisiana
KEVIN CRAMER, North Dakota
Warren Gunnels, Majority Staff Director
Nick Myers, Republican Staff Director
C O N T E N T S
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WEDNESDAY, MARCH 17, 2021
Page
STATEMENTS BY COMMITTEE MEMBERS
Chairman Bernard Sanders......................................... 1
Ranking Member Lindsey Graham.................................... 3
Senator Charles E. Grassley...................................... 91
WITNESSES
Statement of the Honorable Robert B. Reich, Chancellor's
Professor of Public Policy, University of California, Berkeley,
Former U.S. Secretary of Labor................................. 5
Prepared Statement of............................................ 31
Questions and Answers (Post-Hearing) from:
Senator Sheldon Whitehouse............................... 85
Senator Tim Kaine........................................ 87
Statement of Sarah Anderson, Program Director, Global Economy,
Institute for Policy Studies................................... 7
Prepared Statement of............................................ 53
Questions and Answers (Post-Hearing) from:
Senator Tim Kaine........................................ 88
Statement of Jennifer Bates, Amazon Worker, Bessemer, Alabama,
Fulfillment Center............................................. 8
Prepared Statement of............................................ 62
Statement of John W. Lettieri, President and Chief Executive
Officer, Economic Innovation Group (EIG)....................... 11
Prepared Statement of............................................ 65
Questions and Answers (Post-Hearing) from:
Senator Tim Kaine........................................ 90
Statement of Scott Winship, Ph.D., Resident Scholar and Director
of Poverty Studies, American Enterprise Institute.............. 13
Prepared Statement of............................................ 75
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
Statement of Star Parker, President, Center for Urban Renewal and
Education, Submitted for the Record by Senator Graham.......... 93
Newsweek Article Submitted for the Record by Senator Graham...... 97
AL.com Article Submitted for the Record by Senator Graham........ 106
THE INCOME AND WEALTH INEQUALITY CRISIS IN AMERICA
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WEDNESDAY, MARCH 17, 2021
U.S. Senate,
Committee on the Budget,
Washington, D.C.
The Committee met, pursuant to notice, at 11:00 a.m., via
Webex and in Room SH-216, Hart Senate Office Building,
Honorable Bernard Sanders, Chairman of the Committee,
presiding.
Present: Senators Sanders, Whitehouse, Kaine, Van Hollen,
Lujan, Graham, Grassley, Crapo, Toomey, Johnson, Braun, and
Scott.
Staff Present: Warren Gunnels, Majority Staff Director; and
Nick Myers, Republican Staff Director.
OPENING STATEMENT OF CHAIRMAN BERNARD SANDERS
Chairman Sanders. Okay. Let us get to work.
Let me begin by thanking Ranking Member Graham and the
other members of this Committee for being with us this morning.
Some will be here, some will be virtual. And I also want to
thank the many witnesses who will be with us today remotely
because of the pandemic.
Today we are going to be discussing an issue that, in my
view, is of enormous consequence, both morally and
economically. But it is an issue that gets far too little
discussion, and that is, the crisis of income and wealth
inequality in our country.
The simple truth is that today in America the very, very
rich are getting much richer, while tens of millions of
working-class Americans are struggling to put food on the table
and take care of their basic needs.
This morning we are going to learn why it is that the
middle class in our country, once the envy of the world--the
whole world looked to the United States and saw a growing and
strong middle class--but why it is that that great middle class
has been in decline for decade after decade after decade while
at the same time there has been a massive transfer of wealth
from working families to the top 1 percent, an issue that needs
to be discussed.
We are going to be talking about why it is that during this
horrific pandemic 63 percent of our workers have been living
paycheck to paycheck, worried that if somebody in the family
gets sick or the car breaks down, they will be thrown into
financial desperation because they do not have the money to pay
those bills.
Meanwhile, same exact time, 660 billionaires, the richest
people in America, have become $1.3 trillion richer. So during
the pandemic, millions of people are struggling to put food on
the table. A handful of billionaires are becoming much richer.
We are going to talk about the obscenity of the 50
wealthiest Americans now owning more wealth than the bottom
half of our society--50 people, half of our people, 160 million
people--while at the same time over 90 million Americans are
uninsured, have no health insurance, or are underinsured,
cannot afford to go to a doctor when they get sick. Is that the
America that we want? I do not think so.
We will be asking about how it happens that the top one-
tenth of 1 percent now owns more wealth than the bottom 90
percent--one-tenth of 1 percent more wealth than the bottom 90
percent--and two individuals, Bezos and Musk, now own more
wealth than the bottom 40 percent. And, meanwhile, we are
looking at more hunger in America than at any time in decades.
Incredibly, if income inequality had remained the same as
it was in 1975, the average worker in America would be making
$42,000 more today than he or she is earning. Instead, as the
number of billionaires explodes, the average worker in America
is now making $32 a week less than he or she made 48 years ago
after adjusting for inflation. So you have got a huge explosion
in technology, worker productivity, average worker today making
less in real dollars than they did 48 years ago.
Today we are going to be talking about what it means
morally and economically when one person in this country, the
wealthiest person in the world, Jeff Bezos, has become $77
billion richer during this horrific pandemic, while denying
hundreds of thousands of workers who work at Amazon paid sick
leave and hazard pay.
As you may know, I asked Mr. Bezos to testify at this
hearing. He declined my invitation, and that is too bad,
because if he was with us this morning, I would ask him the
following question, and that is: Mr. Bezos, you are worth $182
billion--that is a ``B''--$182 billion; you are the wealthiest
person in the world. Why are you doing everything in your power
to stop your workers in Bessemer, Alabama, from joining a union
so that they can negotiate for better wages, better benefits,
and better working conditions?
While Mr. Bezos would not be with us today to answer those
questions, we are going to hear from Jennifer Bates, an Amazon
worker in Bessemer, Alabama, who will tell us what it is like
to work for one of the most profitable corporations in America
and why she and her co-workers are trying to form a union
there.
But let us be clear. Amazon and Jeff Bezos are not alone.
The American people are increasingly disgusted with the
corporate greed they are experiencing every single day. They
are sick and tired of corporate Chief Executive Officers (CEO)
who now make 320 times more than their average employees, while
at the same time give themselves big bonuses, all kinds of
golden parachutes, and yet they cut back on the health care
that their workers have. They want corporations to invest in
workers, in decent wages, benefits, and working conditions, not
just higher dividends, stock buybacks, and outrageous
compensation packages for their executives.
And that is why I am introducing legislation today to
impose an income inequality tax on corporations that pay their
CEO over 50 times more than their average workers. It has
always been true, of course, that CEOs make more than their
employees. But what has been going on in recent years is
totally absurd.
In 1965, CEOs of large corporations made just 20 times as
much as their average workers. Today those CEOs now make over
300 times and in some cases over 1,000 times more than their
average workers. That is absurd, that is wrong, and that has
got to change.
Now, when we talk about the need to protect the working
class in this country and to address the crisis of income and
wealth inequality, there is an enormous amount of work that
Congress has got to undertake. We need to raise that minimum
wage to a living wage. Nobody who works 40 hours a week should
live in poverty, and that living wage should be at least 15
bucks an hour.
We need to make it easier for workers to join unions, not
harder. The massive increase in wealth and income inequality
today can be directly linked to the decline in union membership
in America. We need to create millions of good-paying jobs,
rebuilding our crumbling infrastructure, our roads, bridges,
wastewater plants, sewers, culverts, building the affordable
housing that our people need.
We need to transform our energy system away from fossil
fuel, and when we fight to protect our kids and this planet
from climate change, we also create millions of good-paying
jobs.
We need to guarantee and do what every other major country
on Earth does, and that is to guarantee health care to all
people as a human right. Health care is a human right, not a
privilege. We need to make sure that all of our young people in
this country have the right to get a higher education,
regardless of their income, and, yes, we need to make sure that
the wealthiest people and large corporations start paying their
fair share of taxes.
Now, I know that my Republican colleagues have a different
view. I suspect that Senator Graham will disagree with one or
two things that I have said. I may be wrong about that. But at
a time of massive income and wealth inequality, I do not
believe that we should be giving more tax breaks to the rich.
In fact, amazingly enough--and maybe we can discuss this--
several of my Republican colleagues in the Senate, including
Minority Leader McConnell, introduced a bill to repeal the
estate tax, legislation that would provide $1.7 trillion in tax
breaks to the billionaire class while doing nothing to help
working families or family farms.
Let us be clear. Repealing the estate tax would only
benefit the top one-tenth of 1 percent who inherit over $11.7
million; 99.9 percent of the American people would not receive
a penny if this legislation became law.
So the bottom line is today we are discussing a huge issue
that has broad implications for every person in this country,
and I look forward to our panelists' presentation and to the
discussion.
Senator Graham.
OPENING STATEMENT OF SENATOR LINDSEY GRAHAM
Senator Graham. Thank you, Mr. Chairman. One thing we will
agree on is that you believe this. You have been the most
consistent voice I think in the country over a long period of
time on issues like this. We do have disagreement, but I like
working with people who believe what they believe.
Now, here is some common ground, I think. Most of us do not
want the consolidation of wealth and power to lie in the hands
of the few through ill-gotten gain, through monopolies, through
unfair trade practices, through criminal enterprise, market
manipulation. But if you can make your money legally and
fairly, good for you.
And that brings us to the question of Big Tech. I do not
know what we do about this, Mr. Chairman, but the question for
me is: Have we let too much power consolidate in the hands of
Big Tech? Is it a virtual monopoly in terms of flow of
information? And have we allowed these new technologies to
become the modern version of robber barons of the last century?
And I would like to talk more about that. I do not know if you
need to break these companies up or not, but Section 230 and
other things we need to revisit.
But, generally speaking, this has been a capitalist Nation,
and I hope it remains so, with regulation to prevent
environmental abuse and make sure people play by the rules. To
me, the Government plays a role in keeping the water in the
banks. When people start creating monopolies, that is unfair to
other competitors. When people cheat and scheme and get rich
off bad business practices, that is something we all should be
concerned about.
But the Gallup poll company has been asking Americans what
they think is the most important problem facing the country
every month for a long time. In the latest survey, 26 percent
said it was the coronavirus; just 1 percent said it was the gap
between rich and poor.
Now, how can that be? I actually believe that. I believe
that most Americans do not spend their time wondering about how
to take from somebody else. They are wondering about how do I
get ahead, and they are looking for opportunity, and they
should be demanding that opportunity.
One thing that I think we can start focusing on is how do
you lift people up who have been in poverty, how do you present
better opportunity. There is the way described by the Chairman,
and I think the other way that I like is Senator Scott, who is
focused on enterprise opportunity zones in blighted
neighborhoods, making sure that there are tax advantages for
businesses like Amazon and others to go into these
neighborhoods and increase wages by having better business
opportunity.
But all of us have one thing in common here on this
Committee. We had good educations. And if you want to level the
playing field for America, make sure that every kid, regardless
of Zip code, has an adequate opportunity to be well educated,
and I believe in public school systems. I am a product of it.
But the question becomes: What happens when a public school
fails time and time again? What are the things that we can do
to level that playing field?
So here is what the Census Bureau said: that the poverty
rate hit an all-time low in 2019, and that between 2017 and
2019 income inequality actually declined; that before the
pandemic, the unemployment rate was at a 50-year low; the rates
for African American, Hispanic, and people with disabilities
hit their lowest unemployment levels on record; wages were
rising at the fastest pace in years; and they were rising
fastest for blue-collar workers.
So there are two different models being suggested here, and
I think the model that we are suggesting is that accumulation
of wealth through monopolies and other unfair trade practices
or manipulation of markets or criminal enterprises. We should
all be against that. But like Bill Gates, you invented
something a lot of people want. Amazon, they found a way to get
you products that you want. The problem, Mr. Chairman, is
online shopping may put brick-and- mortar businesses out.
So one of the things that I have been focused on is making
sure that sales taxes are collected from online vendors like a
brick-and-mortar business, like my family had, because that
would create a tax advantage for online businesses.
So I want a level playing field in terms of regulation and
taxes and educational opportunity, and I think that is the role
of the Government, not picking who gets this and who gets that
and what is too much money. I think that if the Government gets
in that business, it will do more harm than good. But I am
looking forward to working with you on this and many other
issues, and, quite frankly, I am enjoying this Committee
because we are talking about things that matter.
So thank you.
Chairman Sanders. Senator Graham, thanks very much.
Now we are going to go to our witnesses, and we have some
great witnesses this morning, and I thank all of them for their
willingness to be with us.
First, we have Robert Reich. Many of you will remember that
Bob Reich is the former Labor Secretary, Secretary of Labor
under President Clinton, and in my view, one of the great
Secretaries of Labor this country has ever had. Professor Reich
is the author of numerous books, including ``The System: Who
Rigged It, How We Fix It,'' and is currently a professor of
public policy at the University of California, Berkeley.
Professor Reich, thank you so much for being with us this
morning.
STATEMENT OF THE HONORABLE ROBERT B. REICH, CHANCELLOR'S
PROFESSOR OF PUBLIC POLICY, UNIVERSITY OF CALIFORNIA, BERKELEY,
FORMER U.S. SECRETARY OF LABOR
Mr. Reich. Well, thank you very much, Mr. Chairman and
members of the Committee. With your permission, I will simply
provide my testimony and submit it to the Committee, also
several charts that I think the Committee might find very
useful.
Let me just say--and I am going to summarize very quickly--
even before the pandemic, America had the widest inequalities
of income and wealth we have had in a century, and wider than
any other developed nation. The median wage in the United
States has barely budged for 40 years when you adjust for
inflation, even though the economy of the United States is
almost three times larger. And more than half Americans earn so
little that they have to live paycheck to paycheck. And this is
something new in the history of at least post-World War II
America. We have never seen the degree of inequality we are now
experiencing.
Increasingly, the economy's gains have gone to the top. The
richest one-tenth of 1 percent, Mr. Chairman, as you said--I
want to just underscore this. The richest one-tenth of 1
percent has almost as much wealth as the bottom 90 percent put
together. And, again, the compensation packages of the top
executives of big companies, CEOs, have soared from an average
of 20 times that of the typical worker 40 years ago, or 60
times when I was Labor Secretary, to 320 times today. And, you
know, the pandemic has just made all of this much more stark.
America's 660 billionaires have together become $1.3 trillion
richer.
This would be enough, by the way, this $1.3 trillion that
they have gained during the past year would be enough for them
to give every American a $3,900 check and still be as rich as
they were before the pandemic.
The American Rescue Plan, just enacted, is helpful in this
regard, but I think it is very important for this Committee to
look at the underlying structure of power. ``Power'' is a word
that we do not use very often when we talk about the economy.
But there has been a huge shift in power over the last 40
years, a shift toward very large corporations. And Senator
Graham is absolutely right. There has got to be much more
emphasis on fighting monopolies, and it is monopolies both in
terms of big high-tech companies, also monopolies in terms of
high finance, big pharma. I mean, you go around this country
today, and you see more concentration, more economic
concentration, than we have seen at any time in the last 60
years, and also that economic concentration translates into
political power. We have got a severely imbalanced political
economy. Fewer than 7 percent of our workers are in unions
today. Fifty years ago, over a third of workers in the private
sector were unionized. Fifty years ago, giant corporations did
not have the power to suppress prevailing wages. They did not
have platoons of Washington lobbyists which they have today.
Another very important indication of what is happening and
what has happened is that before the 1980s, the main driver of
profits and the stock market was economic growth. But research
has shown--and I include some of that research in my
testimony--that since the late 1980s, the major means by which
corporations have increased profits and stock prices has been
by keeping payroll down. And that has hurt the working class.
The working class in this country has taken it on the chin.
The working class needs to understand that this is about--you
know, there is not a market someplace in the atmosphere, in
nature. I mean, the market is a human creation, and what has
happened, as power has shifted dramatically toward big
corporations and against workers and against workers because
they do not have unions to represent them, you have a change in
the structure of the market, a dramatic change. To rebalance
the economy it is necessary to provide more vigorous use of
antitrust; substantially higher taxes on growing accumulations
of income and wealth at the top; stronger labor protections to
enable workers to join together to gain higher wages benefits;
and also greater restrictions on the use of private and
corporate wealth to influence political decisions.
I have much more to say, but I just want to--and I eagerly
await your questions, Mr. Chairman and members of the
Committee.
[The prepared statement of Mr. Reich appears on page 31]
Chairman Sanders. Mr. Secretary, thank you very much.
Our second witness is Sarah Anderson, director of Global
Economy Project at the Institute for Policy Studies. Ms.
Anderson has studied income and wealth inequality for years and
is a well-known expert on executive compensation.
Ms. Anderson, thanks so much for being with us.
STATEMENT OF SARAH ANDERSON, PROGRAM DIRECTOR, GLOBAL ECONOMY,
INSTITUTE FOR POLICY STUDIES
Ms. Anderson. Thank you. Thank you very much for this
opportunity. I am Sarah Anderson with the Institute for Policy
Studies, and I have been researching inequality for more than
25 years, concentrating on what might be the single most
dramatic driver of that inequality: the growing gap between CEO
and worker pay.
This is a systemic problem in corporate America. In 1980,
the average gap between big company CEOs and typical worker pay
was 42:1. Over the past 20 years, that gap has averaged about
350:1.
This growing pay divide is also a driver of gender and
racial disparities. Nearly 90 percent of Fortune 500 CEOs are
White men, while women and people of color are
disproportionately a large share of low-wage workers.
But we all pay a price for this executive excess. Back in
2008, executives chasing huge bonuses crashed our economy,
leaving millions homeless and without jobs. In the wake of that
disaster, Senator John McCain and many other lawmakers called
for a $400,000 cap on pay at all companies receiving taxpayer
assistance. But corporations and Wall Street banks not only
blocked that proposal, they designed compensation packages to
help executives rebound more quickly than ordinary Americans.
Today we are living through a period of even greater
national suffering and a period when front-line workers have
proved how essential they are to our economy and our health,
and yet once again many corporate leaders are focused on
bending the rules to protect massive CEO paychecks. Let me give
you a few examples.
At Coca-Cola, none of the top executives met their bonus
targets last year, but the board gave them all bonuses anyway.
The CEO wound up with $18 million in total compensation, over
1,600 times as much as the company's typical worker pay.
Or look at Carnival. Remember how they stranded their
employees on their cruise ships for months without pay?
Meanwhile, the board gave the CEO a special retention and
incentive award that lifted his overall pay to more than $13
million, a 22-percent increase over 2019.
At Tyson Foods, 12,000 front-line workers contracted COVID
last year, but that did not stop the board from giving
executives stock grants to make up for the fact that they had
not met their bonus targets. One of these executives was
company Chair John Tyson, who was hardly in dire need. He has
seen his personal wealth increase 62 percent during the
pandemic to $2.4 billion.
Research by my Institute for Policy Studies colleagues and
Americans for Tax Fairness shows that the combined wealth of
all 660 U.S. billionaires has soared by $1.3 trillion during
the pandemic. Many of them, of course, owe their fortunes to
their years as CEOs.
Now, corporate executives did not cause the pandemic in the
direct way that executives' reckless behavior led to the 2008
crash. But many CEOs did make working families much more
vulnerable to the current crisis by outsourcing jobs and
turning millions of the jobs that remained into low-wage, part-
time work without benefits.
We can and must do better as a Nation than to accept a
business model that creates prosperity for the few and
precarity for the many. This is not just bad for workers. It is
also bad for business. Research shows that having these extreme
gaps undermines morale, which lowers productivity.
In this time of crisis, we also must seek common ground,
and we have common ground when it comes to CEO pay. In fact, a
Stanford survey found that 52 percent of Republican voters
actually want to cap CEO pay relative to worker pay.
I will end with a few policy solutions that are far more
moderate than what a majority of Republicans support.
First, the Tax Excessive CEO Pay Act. This would increase
taxes on corporations with huge gaps between CEO and worker
pay, and this would create an incentive to both rein in pay at
the top and lift up worker wages, all while generating an
estimated $150 billion in revenue over 10 years. Companies that
have small gaps, less than 50:1, they would not owe one more
dime under this proposal.
Another way to generate revenue while curbing executive
excess would be through a financial transaction tax. This would
curb the short-term speculation that has inflated Wall Street
executive bonuses while doing nothing for Main Street. We could
also leverage the power of the public purse by giving
corporations with narrow gaps a leg up in Government
contracting. Corporate boards have shown us, after the
financial crash and during the pandemic, that we cannot rely on
them to do the right thing when it comes to CEO pay. This is a
problem that affects all of us, and we need responsible policy
solutions.
Thank you very much. I look forward to your questions.
[The prepared statement of Ms. Anderson appears on page 53]
Chairman Sanders. Ms. Anderson, thank you very much.
Our next panelist is Jennifer Bates. Ms. Bates is an Amazon
worker at the Bessemer, Alabama, Fulfillment Center. She and
her co-workers are trying to form a union at Amazon with the
Retail, Wholesale, and Department Store Union. I invited both
Ms. Bates and Amazon founder and executive chairman Jeff Bezos.
I am very happy Ms. Bates agreed to testify, unlike Mr. Bezos.
Ms. Bates, thank you very much for being with us.
STATEMENT OF JENNIFER BATES, AMAZON WORKER, BESSEMER, ALABAMA,
FULFILLMENT CENTER
Ms. Bates. Thank you, Chairman Sanders, Ranking Member
Graham, and members of the Committee. Thank you for the
opportunity to testify today.
Amazon brags it pays workers above the minimum wage. What
they do not tell you is what those jobs are really like. And
they certainly do not tell you that they can afford to do much
better for the workers.
Working at an Amazon warehouse is no easy thing. The shifts
are long. The pace is super-fast. You are constantly being
watched and monitored. They seem to think you are another
machine.
I started working at Amazon in May of 2020 not too long
after they opened. By my third day, I was hurting. I looked
around and saw it was not just me. I mentioned it to my sister,
who also worked there at the time, and she just told me it only
gets worse.
At Amazon, you are on your feet walking all the time and
climbing stairs to get to your station and move products. We
have only two 30-minute breaks during a 10-hour shift which is
not long enough to give you time to rest. The place is huge--
the size of 16 football fields. Just walking the long way to
the bathroom and back eats up precious break time.
My co-workers and I--older, younger, middle-aged people--
limp from climbing up and down the stairs in the four-floor
building. When I first came to Amazon to work, I noticed there
was one elevator for human use. When I tried to use it, a co-
worker stopped me and told me that we were not allowed to use
it. Then I noticed that around the facility there were plenty
of elevators, but the signs say, ``Material only, no riders.''
I could not believe that they built a facility with so many
elevators for materials and make the employees take the stairs
on a huge four-flight facility.
The work itself is also grueling. We have to keep up with
the pace. My workday feels like a 9-hour intense workout every
day. And they track our every move. If your computer is not
scanning, you get charged with being time-off-task. From the
onset, I learned that if I worked too slow or had too much time
off task, I could be disciplined or even fired. Like a lot of
workers, it was too much for my sister, and she ended up
quitting.
I thought there should be another way. I mean, why can't a
large and wealthy company do better for their workers? Amazon
has made tons of money during the pandemic. Jeff Bezos is the
richest man in the world. And now he is even richer thanks to
us workers.
Yet they expect us not to expect anything we did not
already have before we started working there, like we do not
deserve better. Amazon goes into poor communities claiming that
they want to help with economic growth. That should mean paying
its employees a living wage and benefits that truly match the
cost of living and ensure workers work in safe and healthy
conditions, because we are not robots designed to only live to
work. We work to live. We deserve to live, laugh, and love and
have full self-fulfilling lives.
We the workers deserve to be treated with dignity and
respect and deserve to be given the same commitment that we
give to the job every day we go in. We give 100 percent at
work, but it feels like we are being given back only 30
percent. We are committed to making sure the customers get a
nice package, the whole product in a couple of days. But who is
looking out for us?
We, the workers, made the billions for Amazon. I often say
we are the billionaires; we just do not get to spend any of it.
We first started to talk about unionizing one day during a
break. One guy said, ``They would not be doing these things to
us if we had a union.'' People were upset about the breaks
being too short and not having enough time to rest, about being
humiliated by having to go through random security checks going
into our breaks to make sure we are not stealing merchandise
and then not even being given the time back for our breaks.
Others did not like that they never actually spoke to a
manager. They just got messages on the app or by text. It is
all so impersonal and at times just plain weird. And then there
is the issue of job security. People are concerned about people
getting fired for no real reason and not being given the
opportunity to speak to anybody at Amazon about it.
They deny us good working conditions and claim we should be
happy with what we have and then go around spending millions to
tell us we do not need a union.
As soon as Amazon found out about the union, they started
going hard trying to stop the union drive. We were forced into
what they called ``union education'' meetings. We had no choice
but to attend them, not given an opportunity to decline. They
would last for as much as an hour, and we would have to go
sometimes several times a week. The company would just hammer
on different reasons why the union was bad for us, and we had
to listen. If someone spoke up and disagreed with what the
company was saying, they would shut the meeting down and told
people to go back to work, then follow up with us in one-on-one
meetings on the floor.
A lot of what was said in those meetings was untrue, like
telling people they would lose their benefits if they joined
the union. It was upsetting to see some of the younger people
who were really on board with the union get confused by what
was being said in the meetings.
All around the plant, Amazon had put up anti-union signs
and messages. They sent messages to workers' phones. They even
had signs posted in the bathroom stalls. No place was off
limits. No place seemed safe.
Despite all that, or maybe because of it, we continue to
organize and build support for the union. We do it because we
hope that with a union we will finally have a level playing
field. We hope we will be able to talk to someone at Human
Resources (HR) without being dismissed. We hope that we will be
able to rest more, that there will be changes in the facility
to take some of the stress off our bodies. We are hoping we get
a living wage--not just Amazon's minimum wage--and be able to
provide better for our families. We hope that they will start
to hear us and see us and treat us like human beings.
It is frustrating that all we want is to make Amazon a
better place to work. Yet Amazon is acting like they are under
attack. Maybe if they spent less time--and money--trying to
stop the union, they would hear what we are saying. And maybe
they would create a company that is as good for workers and our
community as it is for the shareholders and executives.
Thank you for giving me the time to share my story.
[The prepared statement of Ms. Bates appears on page 62]
Chairman Sanders. Ms. Bates, thank you very much.
Our next witness is John Lettieri, who is president and CEO
of Economic Innovation Group. Prior to his work at the Economic
Innovation Group, Mr. Lettieri was the vice president of public
policy and government affairs for a leading business
association, the Organization for International Investment.
Mr. Lettieri, thank you very much for being with us.
STATEMENT OF JOHN W. LETTIERI, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ECONOMIC INNOVATION GROUP
Mr. Lettieri. Thank you, Chairman Sanders, Ranking Member
Graham, and members of the Committee. I appreciate the
privilege of testifying today on the challenge of inequality in
the United States.
I believe there are many ways for Congress to work on a
bipartisan basis to tackle economic inequality and support the
needs of low-income and disadvantaged people. I discuss several
such areas in my written testimony, including promoting
economic dynamism and worker mobility, by banning the use of
noncompete agreements, pursuing an aggressive policy of full
employment to boast wages and labor force participation for
workers at the bottom, and enacting a bold place-based policy
agenda to support struggling regions and distressed
communities.
But in the interest of time, I want to focus my opening
comments this morning on a fourth issue: helping low- and
moderate-income Americans build wealth through long-term
retirement savings.
The U.S. economy is the world's most powerful engine of
wealth creation and prosperity, but in spite of this, the lack
of wealth at the bottom remains a troubling and persistent fact
of life. The numbers are startling. The median net worth for
the bottom 25 percent of American families is a mere $310. The
bottom 50 percent of families own less than 2 percent of total
U.S. wealth.
One of the central reasons for the persistent lack of
wealth at the bottom is the lack of adequate retirement savings
among low-income families. The median retirement savings
balance for the bottom 50 percent of American families is $0.
For comparison, the median for families in the top 10 percent
is $610,000.
Now, the problem here is not that affluent Americans are
doing well at saving but, rather, that current policy is so
poorly designed to support those most in need of building
wealth. And the reason here is simple. Retirement savings
policy mostly relies upon deductions from taxable income that
are of little use to Americans in the bottom 50 percent of the
income distribution, most of whom pay little to no Federal
income tax to begin with. So as a result, a person making
$20,000 a year and contributing the maximum gets nothing from
Federal and State tax incentives, while a person earning
$200,000 gets over $7,000 in Federal and State aid. In other
words, those who need help building wealth are the ones most
excluded by current policy.
Deeply uneven participation in retirement savings also
perpetuates the racial wealth gap. Only 35 percent of Hispanic
families and only 41 percent of Black families hold any
retirement account savings, compared to 68 percent of White
families. Among those that do have at least some retirement
savings, the median White family holds more than double that of
the median Hispanic family and the median Black family.
So what can be done? A number of noteworthy proposals,
including from members of this Committee, have been put forward
in recent years to address the dearth of retirement savings
among low-income workers. But there is one option that is both
elegant in its simplicity and transformative in its potential
benefits, and it will be familiar to every member of Congress,
and that is, to make all low- and moderate-income workers
eligible for a program modeled after the Federal Thrift Savings
Plan (TSP), complete with a match on contributions up to a
certain percentage of income.
The TSP is a defined contribution savings program now
available only to Federal employees and members of the
military. In a paper soon to be published by my organization,
co-authors Dr. Teresa Ghilarducci of the New School and Dr.
Kevin Hassett, former Chair of the White House Council of
Economic Advisers, make the case for expanding access to the
TSP to tens of millions of Americans who currently do not enjoy
participation in an employer-sponsored plan. They argue that
the design of the TSP makes it an ideal model for helping low-
and moderate-income workers build wealth, ensure a comfortable
retirement, and grow a nest egg that can be passed on to future
generations.
The TSP is an incredibly well-designed program.
Participants enjoy automatic enrollment, a simple menu of
options for investment, an easy user interface, very low
expense ratios, and matching contributions of up to 5 percent
of income, along with a number of other features that, when
combined, have proven to generate remarkably strong
participation among eligible workers.
The beauty of the TSP is that it is a proven and carefully
studied model that performs exceedingly well for the very
traditionally marginalized workers that have largely been
neglected by U.S. retirement policy. Participation rates, for
example, among those with a high school degree or less and
workers in the bottom one-third of earnings have reached as
high as 95 percent. And such workers on average contributed a
significant share of their earnings to their TSP accounts.
In other words, the TSP already provides compelling
evidence that low-income, limited-education workers will avidly
participate in a well-designed savings scheme if it is made
available to them.
Creating such a pathway for working Americans to build
wealth through a widely available and portable program modeled
on the TSP would be a transformative step towards ensuring
everyone in this country has a meaningful stake in national
economic growth and prosperity. Such a program would be in
addition to, not in place of, Social Security, filling the gap
in current policy to support of tens of millions of workers,
including part-time and gig workers, who are most in need of
additional support. And early estimates suggest that the
enormous social and economic benefits generated by this policy
could be achieved at relatively little cost, as the forthcoming
paper and subsequent analyses will demonstrate.
Boosting incomes, wealth, and well-being for those at the
bottom is a worthy policy goal that should be tackled from a
number of complementary directions, and I believe this is one
of the most important.
Thank you, and I look forward to taking your questions.
[The prepared statement of Mr. Lettieri appears on page 65]
Chairman Sanders. Mr. Lettieri, thank you very much for
your presentation.
Our last witness is Scott Winship, director of poverty
studies at the American Enterprise Institute (AEI). Before
joining AEI, Dr. Winship served as the Executive Director of
the Joint Economic Committee.
Mr. Winship, thank you very much for being with us.
STATEMENT OF SCOTT WINSHIP, PH.D., RESIDENT SCHOLAR AND
DIRECTOR OF POVERTY STUDIES, AMERICAN ENTERPRISE INSTITUTE
Mr. Winship. Thank you, Mr. Chairman. Chairman Sanders,
Ranking Member Graham, and members of the Committee, thank you
for inviting me to appear today to discuss inequality in the
United States.
Policymakers confront difficult decisions prioritizing
different challenges facing the nation. Obviously, to the
extent that some issue merits being designated a crisis, it
should command the highest levels of attention. But income and
wealth inequality do not constitute a crisis. The conventional
wisdom that inequality has risen dramatically is wrong based on
influential research that turns out to have suffered from
mismeasurement problems.
Even if inequality had risen by as much as is often
claimed, over the same period middle-class incomes have risen
significantly and are at all-time highs. Poverty has fallen
sharply and is at an all-time low. Other sets of problems
deserve more of our attention.
Twenty years ago this September, Thomas Piketty and
Emmanuel Saez published their first estimates of income
concentration in the United States. As I discuss in my written
testimony, these estimates turned out to have important flaws,
since acknowledged by Piketty and Saez. These figures indicate
that the share of income received by the top 1 percent rose 14
percentage points between 1979 and 2019. However, improved
estimates from Gerald Auten and David Splinter put the likely
increase at just 4 points. These figures do not take into
account taxes, nor most Government transfers. In other words,
they ignore most of the ways that Federal policy already
reduces inequality. After taxes and transfers, Auten and
Splinter find that the top 1 percent's share rose from 7.2
percent in 1979 to 8.7 percent in 2017. As income measurement
has improved, it seems ever likelier that the perception of a
crisis in income inequality stems from statistics that turned
out not to reflect reality.
The wealth concentration estimates of Saez and Gabriel
Zucman have also been influential, leading to calls for wealth
taxation. However, their research has been challenged by
Matthew Smith, Owen Zidar, and Eric Zwick. They report an 8-
point rise in the top 1 percent's share from 1979 to 2016
compared with the 13-point rise Saez and Zucman report over the
same years.
Measuring wealth, however, is subject to complicated
challenges which I discuss in my written testimony. Here I will
only point out that most Americans would save more for
retirement absent the strong likelihood that they will be able
to count on receiving senior entitlements from the Federal
Government. If they saved more, that would show up in the data
as higher wealth. Yet we do not count these Government promises
in wealth.
Smith, Zidar, and Zwick find that the share of wealth owned
by the top 0.1 percent rose from around 9.5 percent in 1989 to
14 percent in 2016. But after adding the value of Social
Security, the increase was only from 8 percent to 10 percent.
Even if income or wealth concentration had risen more
sharply, it would matter whether increasing inequality had come
at the expense of people and families below the top 1 percent.
The fact of the matter is that incomes below the top have risen
significantly. The Congressional Budget Office finds that
median pre-tax household income rose between 32 and 41 percent
from 1979 to 2017, and the increase was 54 to 61 percent after
taxes and transfers. That amounts to $30,000 in additional
inflation-adjusted income.
According to the official measure, the poverty rate in 2019
was lower than ever before among all Americans, all American
families, families headed by a single woman, non-Hispanic
Whites, Blacks, Hispanics, and Asians. As I discuss in my
written testimony, official statistics are biased in a variety
of ways that dramatically understate the progress we have made
reducing poverty. Poverty among the children of single mothers,
for instance, fell from 49 percent in 1982 to 18 percent in
2014 and is lower today.
Before closing, I want to redirect your attention to two
sets of issues that I would characterize as ``crises of
opportunity.''
First is the problem of limited upward mobility out of
poverty. Even as we have driven child poverty rates down, that
has not resulted in a greater chance that children raised in
low-income families will make it to the middle class. The lack
of progress boosting upward mobility is even more worrisome
because it prevents us from narrowing vast disparities in
mobility between Black and White children.
A second crisis of opportunity involves the deterioration
of our associational life. Relative to 40 or 50 years ago,
Americans marry less often, live further from family members in
adulthood, do fewer things together with their neighbors,
attend religious services less often, join fewer groups, and
spend less time with co-workers outside the workplace. Economic
residential segregation has worsened; trust in institutions has
diminished. Single parenthood has increased, along with
nonmarital birth rates and divorce.
Since these problems predate the increase in inequality and
have occurred as poverty rates have fallen, addressing them is
likely to require different kinds of policies than would be
considered if the goal were to reduce inequality or poverty.
Indeed, many policies that would reduce inequality or short-
term poverty might be counterproductive in terms of increasing
upward mobility or reversing declines in associational life.
Policymakers should take care in labeling some economic or
social challenge a ``crisis.'' People, of course, will differ
in their assessment of how serious an issue is. But a crisis
that is declared on the basis of questionable data and
questionable claims about why that data is important runs the
risk of crowding out more pressing national problems. It is
difficult enough identifying solutions to our problems; we
cannot let ourselves be led astray in prioritizing them.
Thank you very much.
[The prepared statement of Mr. Winship appears on page 75]
Chairman Sanders. Mr. Winship, thank you very much for your
testimony.
Now we are going to begin the questions. Let me begin my
questioning with former Secretary of Labor Bob Reich. Mr.
Secretary, according to your testimony, 50 years ago General
Motors was the largest employer in America where the typical
worker belonged to a union and made $35 an hour after adjusting
for inflation. Today America's largest employer is Walmart,
where over half their workforce makes less than $15 an hour,
and none of their workers belong to a union.
How has the decline in union membership contributed to the
increase in income inequality?
Mr. Reich. Mr. Chairman, one of the most dramatic changes
in the United States over the past 60 years has been the
decline in the percentage of private sector workers who are
unionized. Sixty years ago, even, in fact, 50 years ago, one-
third of all private sector workers belonged to a union. That
gave them bargaining power at the firm level. It gave them a
voice at the firm level. It also gave them political power
because when you consider a third of all workers unionized, the
unionized segment of the workforce actually had a political
voice.
Now, today, by contrast to 50 years ago, only 6.4 percent
of private sector workers are unionized, which means that at
the level of the firm, there is almost no union presence in
most firms. At the level of national politics, the union voice
is far less; the working-class voice is far less. And so in
both respects and at both levels, you get this severe
imbalance.
In the 1950s, we talked about the countervailing power
represented by American labor unions, countervailing to the
great power of American corporations. Countervailing power is
now gone. There is almost no countervailing power left. And so
it is not that the GM worker was that much more brilliant or
productive or the GM worker was so much better prepared than
the Walmart worker. No. The difference really was that the GM
worker had a union behind him or her, and the Walmart worker
does not.
Chairman Sanders. All right. With that, I am going to have
to interrupt you, and I apologize, but I want to ask some of
the other panelists a question.
Let me go to Jennifer Bates. Ms. Bates, let me ask you a
very simple question. Why do you believe it is so important for
you and your co-workers to have a union at the Amazon facility
in Bessemer, Alabama? Why is that so important?
Ms. Bates. It is important because we need an equal playing
field. For so long, people have been walking away from jobs
because of the disrespect in equality, and nobody has actually
stood up to say, ``You know what? It is time for someone to be
held accountable for what they are doing.''
Amazon has a sign that sits outside that says, ``If you see
something, say something.'' So we decided to stand up and say
something. We need better work conditions. We need a better
wage for living. We need job security. So it is important for
us that the union come in so that Amazon will have the
opportunity then to sit down and talk to us and with us to get
these issues resolved.
Chairman Sanders. Okay. Thank you very, very much.
Let me ask Ms. Anderson a question. Ms. Anderson, according
to your testimony, in 1980 CEOs of large corporations made
about 42 times more than their average worker. Today CEOs now
make over 300 times more than their average worker. Very
briefly, how did that happen?
Ms. Anderson. Well, it did not happen because CEOs just got
a whole lot smarter during that time period. On the worker end,
it has happened because wages have stagnated as unions have
declined, as we have already discussed. On the CEO pay end, it
has happened because stock-based pay has come to dominate CEO
pay packages. And the argument there was that shifting to
stock-based pay would ensure pay for performance, and that has
really turned into a joke. Study after study shows there is no
connection between CEO pay levels and their performance.
One of the most obvious examples was after the 2008
financial crash when companies gave boatloads of new stock
options to their executives when the market was at bottom, and
very quickly those stock options ballooned in value as a result
of a taxpayer-fueled recovery, not because of any brilliant
executive performance.
Chairman Sanders. Okay. Well, thank you very much, and my
time has expired. Senator Graham.
Senator Graham. Thank you, Mr. Chairman.
Let us start with Secretary Reich. Yes, can you hear me?
Hello?
Mr. Reich. I can hear you perfectly fine, Senator.
Senator Graham. Okay. Thank you, Mr. Secretary. What should
the top individual tax rate be, in your view?
Mr. Reich. Well, under President Eisenhower, Dwight
Eisenhower, you may recall, the top rate----
Senator Graham. A little before my time, but I have heard
of him. Go ahead.
Mr. Reich. The top marginal rate was 91 percent. The top
effective rate was about 43 percent. I do not think we need to
go back to the Eisenhower years. He was a great President in
many respects. But I think that we do need to substantially
increase the top marginal rate from what it is today. And it is
not just----
Senator Graham. Just generally speaking, what would that
look like? You do not have to give me an exact number.
Mr. Reich. Well, I would say probably in the range of 40 to
50 percent.
Senator Graham. Okay. What should the corporate tax rate
be?
Mr. Reich. Are you asking me again, Senator?
Senator Graham. Yes, sir.
Mr. Reich. I would say that the corporate rate probably
ought to be--and, again, we are talking about income taxes,
corporate income taxes. I think that the top corporate income
tax rate ought to be around 30 percent, maybe 35 percent of
where it was before, but the question with corporate taxes is
always interesting because the real underlying questions is:
Who ultimately pays? I am one of the people who thinks that
maybe we ought to reduce the corporate income tax and increase
capital gains taxes, because it really is shareholders who bear
or should bear most of the burden of the corporate income tax.
Senator Graham. What should the capital gains rate be?
Mr. Reich. I think the capital gains rate should be
probably around 25 or 28 percent. That would be my best guess.
Warren Buffett obviously thinks that there ought to be a
minimum 30 percent income tax; that would be including capital
gains. I think he may be--he may be right.
Senator Graham. Okay. Do you support school choice for
neighborhoods who have poor-performing public schools?
Mr. Reich. Again, if you are asking me, Senator, I support
school choice in the sense that I think that poor-performing
schools do need to be held accountable. The real question is
what the choice is. I think that any organization, whether it
is a charter school or a public school, ought to be in the
position of offering a good education, and I have offered a
proposal years ago--nobody supported it except Jeb Bush.
Governor Jeb Bush liked this idea, which was a voucher that
would be inversely related to family income.
Senator Graham. That is very helpful. Thank you.
Mr. Lettieri, are you there?
Mr. Lettieri. I am.
Senator Graham. Okay. Do you support school choice for
poor-performing schools for parents to have a choice?
Mr. Lettieri. Senator Graham, it is an important question,
but it falls outside of the scope of my organization's work. So
I am happy to offer you my personal opinion, but I just want to
make it clear it is not an issue that we have studied at EIG.
Senator Graham. Well, that is okay. About the tax rates
that I just talked about, what is your view on tax rates?
Mr. Lettieri. I think the question about where tax rates
should be set is a complicated one because it depends on what
other aspects of the Code are a factor.
Senator Graham. Deductions and exemptions, right?
Mr. Lettieri. Exactly. So I think what we know about the
corporate tax rate, for example, is that the U.S.----
Senator Graham. Would you support a flat tax?
Mr. Lettieri. No.
Senator Graham. Okay. Do you support tax reform to
eliminate some deductions and exemptions?
Mr. Lettieri. Yes.
Senator Graham. Okay.
Mr. Lettieri. As a general matter, I think some of our Tax
Code is good. A progressive Tax Code is good, and so I think if
that is what you mean by tax reform, then the answer is yes.
Senator Graham. So my point here is you wanted to improve
the life of the average American worker, at what point does
regulation and taxation on business trickle down to the
inability to get good-paying jobs and a growing economy? How
much does tax and regulation impact the American economy and
the ability of people to participate in it at a higher level?
Mr. Lettieri. Well, I think one of the things that is often
misunderstood is that complexity is a subsidy to larger
incumbent stakeholders. So the more complex an economy is, the
more complex the regulatory system or the Tax Code is, the more
likely it is to be gamed by those at the top, and the more
likely it is to disadvantage those at the bottom.
So as policymakers think about these questions, which are
important, I think the implicit barrier to entry that is
created by complexity is something that you should keep in
mind, because it is something that certainly plays into the
theme of robust competition and holding larger stakeholders to
account for competition.
Senator Graham. Yes, thank you. One last question. Do you
worry that if our tax rates are out of line on the corporate
side with the rest of the world, that we will incentivize
American companies maybe to leave?
Mr. Lettieri. I think certainly the tax rates can be a
disincentive. It is not the only factor that companies consider
when they are looking at locational decisions. Trade policy,
for example, plays a large role. But certainly if the U.S. were
to get way out of whack with the Organisation for Economic Co-
operation and Development (OECD) average, I think that would be
a problem.
Chairman Sanders. Senator Graham, thank you.
Senator Whitehouse.
Senator Whitehouse. Thank you, Chairman.
My questions are for Mr. Reich. First of all, thank you for
your testimony and your graphs. You document unprecedented
income inequality in this country basically since the Gilded
Age, which, on its own, is a problem. But the question I want
to raise with you is: What do the New Age robber barons do with
that money, the 1 percent billionaires? We know that some of
them start big, famous foundations, and they do charitable
work, and good for them. But some of them set up faux
foundations and fund fake think tanks and go to work in
politics from hiding. Many of them are billionaires who made
their billions in the fossil fuel industry. And the operation
that they run with their billions can actually best be
compared, in my view, to hostile covert operations like
intelligence services run.
And so the question is: What happens when income inequality
at virtually unprecedented levels spawns political inequality?
What happens when you have a quietly ruling political class
that is hiding behind dark money outlets to control political
parties, to control public debate, to control elections through
sponsored think tanks, through captive, paid-for media outlets,
and through dark money-funded super Political Action Committees
(PAC) and independent expenditure political operations? Could
you comment on--there is that old line in TV advertising, ``But
wait, there is more.'' Can you comment on the ``But wait, there
is more'' of the political inequality that the political hidden
use of all this massive fortune that they have aggregated is
brought to bear?
Mr. Reich. Yes, Senator, and this is really one of the most
important negative consequences of wide inequality and the
degree of inequality we have in the United States today; that
is, people at the top who are sitting on top of huge amounts of
assets can and do use a lot of that money to influence
political decisions, not only at the Federal level but also at
the State and local levels, that in turn increases their
wealth. It is a vicious cycle.
We see, for example, Amazon in Seattle has spent a great
deal of money on city council elections. Amazon around the
country is large enough that it can actually have an auction in
which it extorts money from States and cities around the
country for where its second headquarters is going to be.
Dark money is proliferating around the country, as is our
corporate public relations efforts to change public attitudes
in a direction that a corporation may want.
The whole role of money in our system and the overwhelming
dominance of money from big corporations as well as from very
wealthy individuals polluting American politics is one of the
worst aspects of inequality. As the great Louis Brandeis, the
Justice, once said, ``We have a choice in this country. We can
either have a great deal of money in the hands of a few people,
or we can have a democracy. But we cannot have both.''
Senator Whitehouse. So what happens to citizenship and to
the citizenry when a citizen cannot tell who the actor is on
the political stage, when the ad does not say, ``Hi, I am Exxon
and I approved this message,'' ``I am Koch Industries or
Charles Koch and I approved this message''? Instead it says
behind some phony front group, ``Americans for Peace and
Puppies and Prosperity approved this message,'' and you go and
look up Americans for Peace and Puppies and Prosperity, and it
is a mail drop. What is the citizen left with?
Mr. Reich. The citizen is left with no ability to sift
through the messages that that citizen receives as to their
veracity and reliability.
Senator Whitehouse. Motive sometimes matters, doesn't it?
And if you hide the identity, you also hide the motive, and you
hide the ability of the citizen to evaluate the motive and,
therefore, the veracity.
Mr. Reich. Indeed, and the Supreme Court has repeatedly
said as recently as in Citizens United, Senator, as you know,
that transparency will cure all of the negative aspects of
great wealth, corporate wealth in our political system. Well,
that has not happened. We do not have the transparency.
Congress has not demanded it, and a lot of dark money and dark
money groups and 401(c)(4), 501(c)(4) groups make it impossible
for the citizens to know who is actually providing what
message.
Senator Whitehouse. And I will conclude by pointing out
that a great number of them are in the Supreme Court right
trying to undo that transparency part of the Supreme Court's
Citizens United holding. Thank you, Secretary Reich.
Thank you, Chairman.
Chairman Sanders. Senator Toomey.
Senator Toomey. Thank you, Mr. Chairman. And thanks for
holding this hearing, the title of which is ``The Income and
Wealth Inequality Crisis in America.'' And I think we ought to
start with asking ourselves: Is this really a crisis? Is that
the way we should think about especially the most recent trends
in income and wealth inequality?
I want to start with a chart that Mr. Reich has provided
us. He refers to it as the ``Wage and salary income has dropped
as a percent of Gross Domestic Product (GDP),'' and this is the
chart he provides in his testimony. And, you know, if you look
at it, it does look like, you know, that is a declining trend,
right? It was kind of pronounced since 2000. You could argue it
goes back further, but, yeah, that sure looks like it is
declining.
But what is really interesting is that Mr. Reich chose not
to provide all the data that is available. He cuts off the data
in 2018. The data for 2019 and 2020 are available. And so let
us take a look at what the picture looks like if you include
all the available data.
If you include all the available data, what you notice is
it is the same graph except we have got this very significant
uptick. In fact, it is an upward trend from 2011. Clearly an
upward trend.
In fact, in 2018 and 2019, the upward trend--now, mind you,
what we are talking about here is wages and salaries as a
percentage of our total economy. The upward trend that has been
underway for 10 years now was accelerating in 2018, 2019,
further in 2020. So should we consider that we are in a crisis
of income inequality when the situation has been trending
better for 10 years and most recently at an accelerating pace?
Take a look. We have recaptured back where we were in 2003.
I think when you have got more data available, you really ought
to use it.
Let us take a look at another chart that we have here. This
is from the Atlanta Fed, and it compares wage growth for the
lowest 25 percent of wage earners to the wage growth of the
highest 25 percent of earners. Now, the lowest 25 percent of
earners is in blue, and the highest 25 percent of earners is in
this gold color.
Now, what does this chart show? It shows clearly that
sometime around about 2014, wages started growing more rapidly
for low-income works than wages have been growing for high-
income workers. And what does that mean? That means the income
gap is getting narrower, right? If higher-income people's
raises are occurring at a lower pace than low-income raises,
then the income differential is narrowing. And that is exactly
what is happening, and once again not only is that happening,
but it is happening at an accelerating pace, because you see
the gap by which low-income earners are outperforming high-
income earners in terms of their wage growth. That gap has
widened.
So, again, does an acceleration in the rate at which lower-
income earners are gaining ground relative to high-income
workers, when that is happening and accelerating, should we
think of that as a crisis? Really?
And the reason I am concerned--well, let us go to one more
chart here. We have got another one that is provided by the St.
Louis Fed, and the data itself comes from the U.S. Bureau of
Labor Statistics, and this is a depiction of average hourly
earnings of production and nonsupervisory employees. So these
are not managers. They are not executives. And what is
happening is wages have been rising--and, you know, prior to
2015, not at a very spectacular pace, that is for sure. But it
has certainly been accelerating to the point where in recent
years these wage gains have been well above the rate of
inflation.
So my point is this is very good news. I know some would
like to suggest that we have a crisis so as to justify various
socialistic policies and even more redistribution of wealth.
But the fact is the income gap has been narrowing, and it has
been narrowing at an accelerating pace.
A quick word about the wealth gap. You know, one of the
ironies of this is a big source of the increase in the wealth
gap has been the inflated value of financial assets. And why
have financial assets gone up so much in value? Well, a big
part of it, I think, is ultra-easy money by the Federal
Reserve. Our Democratic colleagues have long been huge
advocates of ultra-easy money by the Federal Reserve. Well, you
should be careful what you wish for, because this is one of the
consequences.
But even here, there is good news, and the good news is
that while investing in financial assets used to be the domain
of just the wealthy, that is increasingly becoming an activity
of middle-income and even people of modest means. In 1989,
fewer than one-third of American households owned stocks. In
2019, a majority, almost 53 percent, of American households
owned stocks. This is going to help narrow the wealth gap.
And I see I have consumed my time. Thank you for indulging
me, Mr. Chairman.
Chairman Sanders. Thank you, Senator.
Senator Van Hollen should be with us on video.
Senator Van Hollen. Thank you, Mr. Chairman, Mr. Ranking
Member, and all out witnesses for your testimony.
We have seen another explosion in terms of the gaps between
CEO compensation and the compensation that they provide to
their workers. And that is why I join Senator Sanders in
introducing the bill we did today.
But I would like to talk and start with you, Dr. Reich,
with the danger of using sort of economic average measures to
measure how the overall economy is performing for working
people. So, for example, if Jeff Bezos had moved to Baltimore
City last year, you would have seen a tripling of the per
capita income in Baltimore City. The current per capita income
in Baltimore City is roughly $53,000. If Jeff Bezos moved there
last year, it would have more than tripled that to roughly
$175,000 per person. And, of course, the situation of any
individual in Baltimore City would not have changed at all. And
so looking from the outside of those averages, you would say,
``Wow, what is going on in Baltimore City? A huge increase in
economic activity.''
Can you talk about why we really need to be drilling down
on different economic measures in order to gauge the success of
our policies for most Americans?
Mr. Reich. Aggregate measures that simply look at the
average--and the average, as you get more and more unequal in
terms of income and wealth, the average tells you less and less
about how most people are living. Even the median, which is
half above, half below, gives you more information but still
does not tell you what you need to know about what is happening
to the bottom half.
The biggest story of America over the last 50 years has
been really the fact that the bottom half, what we used to call
the ``middle class'' and the ``working class'' and the
``poor,'' their situations have become so similar and their
insecurities and the degree to which they are living paycheck
to paycheck have really become very central to our political
economy. I think one reason that we find so many people who are
poor and working class are so angry--it is justifiable. Their
anger is justifiable. They have worked harder and harder, and
they are getting less and less.
Mobility, economic mobility, the ability to move upward is
becoming harder and harder for the bottom half. Logically,
because as the ladder becomes longer and longer, even if you
are moving up the ladder at the same rate you used to move up
the ladder, you get fewer and fewer rungs up that ladder. So
you are absolutely 100 percent correct. We need to look at
median and below, not at average, to get a real insight into
what is happening to the American workforce.
Senator Van Hollen. Well, I appreciate that, and I hope we
will do that because we tend to throw around numbers about
aggregate GDP growth and those really disguise what is
happening to so many working Americans. And, of course, this is
all--we have seen the drop in real wages since the late 1970s
coincide with many factors, including globalization, but
certainly a big one is the drop in union membership and
activity, and that is what the PRO Act is designed to address.
If I could just ask Jennifer Bates to let us know, first,
thank you for what you and your fellow workers are doing to try
to organize and empower workers. Can you tell us what
difference you think a union would make to you and your
colleagues at Amazon?
Ms. Bates. What difference a union will make, it will allow
us to feel more comfortable with coming to work. We are already
coming there with commitment, but we will come to work
understanding that things are being fair with us. We are able
to sit down and negotiate better working conditions to get some
of the issues resolved and to facilitate; that it will allow us
to come to work and not have to worry about just getting fired
for something that you have no idea that you had done. It helps
us to be put in a position where we are able to negotiate a
living wage and not just the minimum wage. Just only yesterday,
one of my co-workers tried to apply for an apartment, and they
told her she did not make enough. And if we would do the study,
we understand that you have to make at least $39,000 average to
afford an apartment.
So it would open the eyes not just in Bessemer, Alabama,
but all over, that the corporations that soon pay attention to
the working-class people, that we are living paycheck to
paycheck trying to get to not just pay the rent or pay
mortgage, but we also have to live, put food on the table. So I
think the union coming to Bessemer, Alabama, to Amazon will
really open the door to a lot of things.
Senator Van Hollen. Thank you all.
Senator Whitehouse. [Presiding.] Thank you, Ms. Bates. We
turn now to Senator Johnson.
Senator Johnson. Thank you, Mr. Chairman. I wish Chairman
Sanders were here because I wanted to second, first of all,
what Lindsey was talking about, how I think these hearings are
very interesting. I think they are also very important. And I
would just talk to my Democrat colleagues. I think there is an
awful lot of areas of potential agreement here on this
particular issue.
I am not so sure that it is the accumulation of wealth that
is the main problem here. I think it is the accumulation of
power. I think Lindsey was kind of referring to that,
monopolistic power. I went to Eastern Europe, and I know,
Senator Whitehouse, you have been to the Munich Conference.
When you go to Eastern Europe, they always talk about the
corruption of the media oligarchs. Well, we have something
similar here as well.
So you can measure the income disparity; you can measure
asset disparity. I do not have the big charts like Senator
Toomey, but here is one way to look at income disparity, and I
will do it for the cameras. This is just simply the five
quintiles, you know, income earners broken up into 20 percent
increments, and you can see when you are just looking at
income, it is a 26 times difference between the lowest quintile
and the upper quintile. But it completely changes when you take
away taxes from the upper quintile and you add benefits to the
lower quintile, and then it is only a 3 times differential.
So we can all talk about statistics. We can all use them
to, I guess, support our arguments. But what I would argue or
what I would like to say is let us kind of get together on
this. I think we do recognize that there is a problem, and we
have to diagnose what caused it.
I see Senator Kaine is back. I have been talking to him a
little bit about in the past, even with the Republican tax
plan--I was not a big fan of it, quite honestly. I voted for it
because I think we did need to make our tax system more
competitive. But at the time I was promoting something that I
thought would be a better approach, which is tax simplification
and tax rationalization. To me, income is income. The fact that
we have so many different types of income that we just
arbitrarily assign different tax rates distorts economic
activity.
I think one of the reasons you see this asset bubble is we
have created so many incentives for C corporations to retain
earnings, so they do not flow out to their shareholders. They
are not efficiently reallocated in through our economy.
So one of the things I was proposing is what I would call
the ``true Warren Buffett tax.'' Ninety-five percent of
American businesses are pass-through entities. The income is
taxed at the individual level at individual rates. So why not
do it to 100 percent of corporations? Tax all corporate income
at the individual level at individual rates. Income is income.
We have worked out all the complications. It is actually
quite easy to do. I know it is a departure, but I would love to
work with my colleagues across the aisle and my Republican
colleagues as well to rationalize and simplify our tax system.
Capital gains. You know, the reason we have lower capital
gains rates makes some sense because you do not want to tax
mere inflationary gains. But from my standpoint, the better way
of doing it is to call income income, tax it at the same rate,
but remove the inflationary gain by indexing the asset. Again,
simplify, rationalize the tax system. I do not like social or
economic engineering to the Tax Code. We need to simplify it.
We need to rationalize it.
And I guess I just want to ask Mr. Winship, first of all--
no, let me go to Professor Reich first. Do you disagree with
this chart where I am showing, you know, income without taking
account of income taxes and benefits, 26-time differential, but
when you add in income taxes--or deduct income taxes and add
benefits, which, by the way, according to Phil Gramm, $45,000
average benefits from different welfare programs, tax credits
to the lowest 20 percent in 2020 alone. Real disposable income
went up 5.5 percent, total savings up $1.6 trillion. Our
economy is going to take off with all the pent-up demand. But
do you dispute this, Professor Reich?
Mr. Reich. Senator, no, I think that undoubtedly, when you
add in taxes and transfers, inequality of income becomes far
less dramatic, and that is an argument, I assume, for more
taxes and more transfers. But also let me just stress that
wealth inequality is not really touched by that. And one of the
biggest problems we have in this country in terms of everything
from political influence to the distortions that occur when
great wealth is transferred from family to family, from
generation to generation, has to do with wealth inequality and
not only income inequality.
Senator Whitehouse. Thank you, Secretary Reich.
It is Senator Kaine's time now.
Senator Kaine. Thank you, Chair and fellow colleagues. And,
Senator Johnson, ``income is income'' is something I really
believe in, too, so there may be some profitable discussions
there.
I have a chart with me that I hope might be visible behind
me, depending upon the camera angle. It is not right now. I
wonder--thank you for that. This chart is an interesting chart
because I think it shows the different values of the two
parties right now, but it also shows potentially a different
economic philosophy that we can operate a real-time experiment
on.
So this takes a look at how the benefits in the Trump 2017
Tax Cut and Jobs Act were allocated among the five economic
quintiles of the American public. And then it also shows how
the benefits of the American Rescue Plan passed in February by
Democrats were allocated among the American public. And if you
look at the chart, what you see is a couple of things. The
quintile of the American public that was most benefitted by the
Trump tax cut was the top quintile. The quintile benefitted by
the Democratic American Rescue Plan was the lowest quintile.
Sixty-five percent of the benefit in the Trump tax cut went to
the top quintile; whereas, more than 65 percent of the benefit
in the American Rescue Plan went to the bottom three quintiles.
The Democratic recovery plan was relatively even in
distribution of benefits across the first four quintiles of
American income; whereas, you see a dramatic un-weighting and
lack of evenness in the Republican Tax Cut and Jobs Act.
Given that the Republican tax plan was passed with
unanimous Republican support and no Democratic support and the
American Rescue Plan was passed with unanimous Democratic
support and no Republican support, I think these two plans are
a really interesting window into the values of the two parties.
And the price tags of both plans are essentially the same. The
tax cut plan was about $1.9 trillion; the American Rescue Plan
was about $1.75 or $1.8 trillion.
So I think this is a great chart, and the coincidence of
which bars are blue and which bars are red is not a
coincidence. But I think it is a great chart to show the
different philosophies in the two parties as to how you want to
allocate benefits if the Government does something like this
that is supposed to be a stimulus in nature. The Democratic
proposal is to spread it more evenly with a little bit more
focus on the lowest-earning Americans; the Republican
philosophy is to concentrate benefits at the top.
But what I am interested in--and this is the question I
would like to pose to the panelists--is in addition to
expressing the values of the parties, I also think we are now
going to set up a really interesting 2-year study of what the
effect of these proposals--what the effect of this legislation
is on the American economy.
So the Republican tax cut was done in December of 2017, and
you could run a 2-year experiment, December 2017 to December
2019. You would not want to get too much into 2020 because
COVID is what economists would say is an ``exogenous shock,''
so you run a 2-year study. And then you run a 2-year study on
the American Rescue Plan from February of 2021 until February
of 2023. And what you do--and I would encourage maybe some of
my academic friends on this to do this--is look at every
economic data point you think is significant: family income,
employment, poverty rates among adults and children, stock
market, business startup activity, GDP, wealth inequality,
deficit. You pick the economic measure, and for the Tax Cut and
Jobs Act, you start in December 2017, and you look at how it
affected the economy for 2 years. And for the American Rescue
Plan, you start in February of 2021, and you look how it
affected the economy in the next 2 years. And I think you will
see not only what the values of the parties are, but I think
you will also see which economic philosophy actually produces
more good for American society.
So that is a working hypothesis that I would put on the
table to our experts, and I would love anyone who is on the
panel to address whether my hypothesis might be worthy of
study.
Ms. Anderson. Well, perhaps I could jump in. This is Sarah
Anderson from the Institute for Policy Studies, and I really
appreciate your call for more analysis of the impacts of these
policies on inequality and the whole range of income levels.
I would perhaps suggest an additional indicator for you to
look at. No one today has yet mentioned the Federal Reserve
figure from 2019 that found that 40 percent of Americans could
not afford a $400 emergency, meaning they were just one medical
problem or car breakdown away from financial ruin. And I think
that is one of the most powerful indicators that really gets at
how it is not just about wages, it is about the cost of living.
And for so many Americans, the cost of housing and health care
just skyrocketed, and it is a very concrete way of looking at
how that affects people's level of economic security at a time
when we have a growing number of billionaires at the top. So
thank you.
Senator Kaine. I am over my time, but I might love to hear
answers from some of the other witnesses for the record.
Senator Whitehouse. We are waiting for Senator Braun who is
on his way here. So in the spirit of equivalence, why don't we
have Senator Johnson ask a question, have Senator Kaine ask a
question, and then--oh, here is Senator Braun saving the day,
coming in just in the nick of time for his time. So I will
recognize Senator Braun. If you want to take a moment to get
yourself squared away, we can----
Senator Braun. It will not take me long.
Senator Whitehouse. Okay. Very good. And Chairman Sanders
is back from the vote, so he can resume the gavel.
Chairman Sanders. [Presiding.] Senator Braun.
Senator Braun. Thank you, Mr. Chair.
So listening to the opening remarks, I have got this to say
when it comes to what happens with minimum wage, what happens
with income inequality. I think both are valid issues. When it
comes to how you tackle it, the difference between Main Street
USA, small businesses, family-owned, even mid-sized businesses,
it is a lot different than, in my opinion, public corporations
where you have got a different dynamic at play.
When you look at income inequality, you have got to be
careful because the opposite of that ends up where you get a
central Government too overbearing. That has not worked
anywhere where it has occurred. And when you look at how did we
get into the pickle that we have gotten into currently, I think
a lot has to do with many of the major sectors of our economy,
and I would cite health care, for instance. You are dominated
by a system that has no transparency, has no competition, has
barriers to entry, and does not have an engaged consumer--the
hallmark of what makes markets work.
So I think when you hear discussions of, well, Amazon is
paying 15 bucks an hour, to me for a huge corporation that has
got the wherewithal, it probably should be more than that. When
you look at wages across the country, I think that something
needs to be done with the minimum wage. But then you need to
look at it from a regional point of view. You do not want to
disrupt places like Indiana where it is working because you
have got a great business climate. You have also got a low cost
of living, so if you do anything with minimum wage, it ought to
be done to where you regionalize it. Places like New York City,
San Francisco, Seattle probably should be over 20 bucks an hour
because their cost of living is so high.
But when you go to the extreme of what has been talked
about here, I think you end up maybe hurting in the long run if
you try to bring the Federal Government in as someone that
tries to moderate the situation other than maybe making sure
that markets are free and unfettered and that they are
competitive. And, sadly, when you look at many of the places
where public companies and corporations rule, you do not have
that.
So the other thing is when you look at the structural
deficits that we run in this country of close to $1 trillion a
year, my first question, if he is still on, would be for Mr.
Reich. How do you, without upsetting an economy that I think
was working fairly decently--you were raising wages the old-
fashioned way, pre-COVID. How do you bridge a structural
deficit when it is mostly associated with programs like Social
Security, Medicare, and Medicaid that we need but that are not
self-sustaining? And I would love your explanation. Can you
raise revenues in any way that is not going to upset the
economy that to me there is a sweet spot, and corporate rates,
when they were moved from 35 to 21, effective corporate tax
rates were 18 percent, largely due to all the exceptions in the
Code. Main Street employers actually got a tax break that I
think was driving the economy when you took the qualified
income deduction and took that rate from 39.6 to 29.6.
I would love to hear your comments on what your idea is on
revenue without upsetting the economy.
Mr. Reich. Well, Senator, we have learned that the deficit
and the overall Federal debt is less of a threat than we
thought it was as recently as even 20 years ago in terms of
inflation and inflationary expectations. But at some point we
do need to raise revenue, and the question, obviously, becomes:
Where and how and who is going to pay?
The subject of these hearings is widening inequality of
income and wealth, and it would seem to me that if we are
looking for places to raise revenue, assuming that we come to
the point where we say, well, given the needs of this country,
we do have to raise revenue, that the place to look is
certainly at the top. And I think that the proposals for a
wealth tax merit a great deal of attention. Other countries
have a wealth tax. We have property taxes at the local level, a
form of wealth tax. It seems to me that, given the
extraordinary wealth in the hands of certain people in this
country, a wealth tax is appropriate.
We also need to get rid of the loopholes, loopholes that we
have been talking about for years, like the carried interest
loophole. There is no reason for it, and there are many other
loopholes as well that have been put into the Tax Code because
there are companies and industries that are hiring lobbyists
that have really spent all their time looking for ways of
creating methods to reduce tax liability. Let us get rid of
those loopholes and let us make sure the base is as wide as
possible.
Senator Braun. Thank you. Do I have time for one quick
follow-up?
Chairman Sanders. Well, you are over time, but I will give
you--if it's brief, very brief.
Senator Braun. So a quick follow-up question. Where does
spending fit into the formula when we have had record revenues
of recent years? And how much of a deficit are you willing to
tolerate under the maybe new modern monetary theory?
Mr. Reich. Well, Senator, we do not know all that much,
quite frankly, as to modern monetary theory. It is a fairly new
idea. The mainstream notion--and I think that we do not want to
take too many risks. I think that at some point the deficit and
deficit financing and the total Federal debt could ignite
inflationary expectations. And that is why we do have to get
serious about raising revenue.
The easiest place to raise revenue, as I just said, is from
people who are very wealthy. It has the least dampening effect
on the economy. Right now, however, when there is so much
underutilized capacity in terms of 9.5 million Americans who
have lost their jobs, 4 million Americans who have dropped out
of the wage labor force altogether, something in the order of
15 million Americans who are working part-time when they would
rather be working full-time, given all of this underutilized
capacity, right now we do need to spend in order to stimulate
the economy. I do not think there is any question about that,
and there is a great deal of consensus about that with regard
to the mainstream.
Senator Braun. Thank you.
Chairman Sanders. Okay. Thank you very much.
I believe our last questioner is Senator Lujan. Senator?
Senator Lujan. Chair Sanders, thank you so very much, and
thanks to you and to Ranking Member Graham for today's hearing.
And I look forward to having a conversation about the
importance of unions to our democracy, our republic, and to
working Americans.
Mr. Chair, my family raised me to understand that our
communities are stronger when workers are protected and
empowered. My grandfather was a union carpenter. My dad was a
union ironworker in Local 495. My mom worked for the local
public school district. My brother is International Brotherhood
of Electrical Workers (IBEW), and my nephew just was accepted
into an apprenticeship program with IBEW.
I believe that everybody in America should have the same
opportunity that my grandfather, father, siblings, and nephew
have had to work hard, to build real economic security, and to
pass something better onto your children and grandchildren.
Those are the values I grew up learning, and those are the
values that I continue to fight for today.
The testimony we heard today from our witnesses includes a
number of striking statistics, and that is where my questions
will begin.
Mr. Lettieri, how much wealth does the bottom 50 percent of
families own?
Mr. Lettieri. Senator, that would be 2 percent.
Senator Lujan. And, Ms. Anderson, what is the current pay
gap between corporate CEOs and the average workers?
Ms. Anderson. Over 300:1.
Senator Lujan. And, Mr. Reich, how much of its value has
the minimum wage lost to inflation since it was last raised in
2009?
Mr. Reich. Just about 10 percent.
Senator Lujan. Mr. Reich, how much has union membership
fallen over the past half-century?
Mr. Reich. From 32 percent of private sector workers down
to 6.4 percent of private sector workers today.
Senator Lujan. So down about 33 percent since 1950.
Mr. Reich. Right.
Senator Lujan. Mr. Reich, yes or no, would you agree that
the statistics and increased inequality are correlated with the
decline in union membership?
Mr. Reich. I think they are directly correlated. In fact,
if you look at the rise of unions in terms of the percentage of
Americans in the private sector who are unionized and then the
decline of unions, you see that the peak years of unionization
were from 1940 to 1978, and those were exactly the years when
we had the greatest degree of equality in this country in terms
of income and wealth spread much more equitably than today.
Senator Lujan. And, Ms. Bates, I very much appreciate
having you here today, and I want to make sure that I give you
some time to answer this question, and it is similar to a
question that you were asked earlier. So my question, Ms.
Bates, is: What would having the opportunity to join a union
mean to you and to your co-workers?
Ms. Bates. What having a union will mean to me and my co-
workers is that our voices are being amplified. That would give
us an even playing field. We would be able to negotiate better
pay wages, which means that it is a living wage and not just
the minimum wage that Amazon voices.
What it would mean is that we would have job security, that
people will not get fired for mundane things or be afraid that
they are going to get fired for doing something that they had
no idea of doing.
It would bring us respect. It would bring us a sense of
empowerment that, when we stand, we continue to believe that we
are valued, bring the value and commitment that we bring into
the jobs, that we receive the same thing. So having a union to
amplify what we are saying, it would bring us a sense of
security and not just at the Amazon in Bessemer but all over
the country.
Senator Lujan. Ms. Bates, all I have to say to that is,
``Amen.'' I want to thank you for being here today. While I
appreciate the expertise of the panelists and the witnesses,
especially the expertise that I have benefitted from the work
that he has done as the Secretary of Labor, but all of his
advocacy, Secretary Reich, your testimony today has been very
compelling, and I just want to say thank you so much for coming
today.
And, again, to the Chair and to the Ranking Member, thank
you for bringing us together. And with that, Chair Sanders, I
yield back.
Chairman Sanders. Well, thank you very much, Senator.
I am not sure if we are going to have another Senator or
not join us, but let me wrap up this hearing by thanking all of
the panelists and all of the Senators who participated.
The issue that we are dealing with today, income and wealth
inequality, is an issue that has to be addressed and is an
issue that will determine what kind of Nation we wish to
become. We are the wealthiest Nation in the history of the
world, but the truth is that half of our people are living
paycheck to paycheck. Many millions of people are working for
starvation wages. And as a result of the pandemic, people are
wondering how they are going to feed their kids, how they are
going to avoid eviction, how they are going to go to the doctor
when they or another family member gets sick.
Clearly, I think our goal is to create a Nation where the
economy works for all people and not just the very few. But
that is, in fact, where we are right now, and as I think some
of the discussion this morning has been about, it is that it is
not only the absurdity of two people in America owning more
wealth than the bottom half of the country; it is the kind of
power that the people on top have to hire lobbyists here in
Washington, to influence legislative decisions, to own media,
to make campaign contributions.
There is a reason why the rich get richer and so many other
people are becoming poorer, and that is not just economic
decisions but those are political decisions as well, and too
often those decisions are influenced by the people who have the
money.
So this is an issue. I think this was an excellent hearing,
and I thank all of our panelists for participating, and we look
forward to pursuing this issue in the months to come.
Thank you all very much, and this hearing is ended.
[Whereupon, at 12:42 p.m., the Committee was adjourned.]
ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD
[Prepared statements, responses to written questions, and
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