[Senate Hearing 117-33]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 117-33

           THE INCOME AND WEALTH INEQUALITY CRISIS IN AMERICA

=======================================================================

                                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

                              ----------                              

                       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

                              ----------                               


                       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.]

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