[Congressional Record Volume 142, Number 39 (Wednesday, March 20, 1996)]
[Extensions of Remarks]
[Page E388]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     WIDENING INCOME GAP IN AMERICA

                                 ______


                         HON. MARTIN OLAV SABO

                              of minnesota

                    in the house of representatives

                        Tuesday, March 19, 1996

  Mr. SABO. Mr. Speaker, for many years, I have been speaking about the 
growing income gap in America. Due to the Republican Presidential race, 
this issue has finally been catapulted into the forefront of the 
Nation's consciousness. In fact, it is hard to open a newspaper op-ed 
page or turn on a television news program without hearing something 
about declining worker wages, increased layoffs and increasing 
corporate profits and CEO pay. I am grateful that people have started 
to pay attention to this important problem. I fear, however, that as 
the Republican race winds down, the issue of the income gap will no 
longer be in vogue, and the media will turn its attention to something 
new.
  We cannot squander this opportunity. The income gap is a growing 
problem that, if not addressed, threatens to undermine our Nation's 
prosperity and calls into question the type of nation we want America 
to be. We must take advantage of the attention now being paid to the 
problems facing working Americans.
  Thanks in part to the deficit reduction measures we passed in 1993, 
the American economy today is in good shape: We enjoy strong growth 
combined with low unemployment and low inflation. The stock market is 
also reaching record highs, as are profits of many American companies. 
This should seem like good news for the average American family, for in 
the past, Americans at all income levels shared in our Nation's 
prosperity. Today, however, stock prices and corporate profits rise 
while the incomes of middle-class American families stagnate or drop.
  If stagnating wages were the only problem that working Americans had 
to face, things might not be so bad. However, in recent years our 
Nation has also seen unprecedented worker layoffs in corporate America. 
Of course, it is understandable that such upheavals may occur as our 
economy becomes more technology-based and integrated into global 
markets. What is difficult to understand, however, are the tremendous 
bonuses and pay increases enjoyed by the very CEO's who lay off 
thousands of workers.
  The United States has prided itself on being a nation of the middle 
class--one in which if you work hard and follow the rules, you can 
expect to do well enough to support yourself and your family. 
Alarmingly, this is no longer true for an increasing number of 
Americans.
  In the decades following World War II, American workers shared in the 
successes of their employers. Over the past 20 years, however, only 
high-income Americans have moved ahead economically. Between 1977 and 
1990, for instance, the average after-tax income of the wealthiest 1 
percent of our population increased by 67 percent, after adjusting for 
inflation. During this same period, the average after-tax income of the 
bottom fifth decreased by nearly 27 percent.

  This is not a problem that affects only the poor. Every year, 
thousands of Americans are laid off from well-paying middle class jobs, 
to be left with a choice between a new job that pays less or the 
unemployment line. Clearly, this trend cannot continue.
  America's level of income inequality is already higher than that of 
any industrialized nation. Our middle class is evaporating, and we are 
well on the road to becoming a nation divided between a few very rich 
and many who simply struggle to get by. None of us, in the words of 
Labor Secretary Robert Reich, will ``want to live in a society sharply 
divided between winners and losers.''
  Leaders in government and business must begin to address this 
problem, which will have social consequences that far outweigh any 
economic impact. We must correct policies that exacerbate the income 
gap, and develop new ones that help to close it. Several of my 
Democratic colleagues have developed proposals to reduce the income gap 
by encouraging responsible corporate citizenship, boosting worker 
wages, and making our Tax Code more equitable. I commend them for these 
efforts, and call upon all of my colleagues to take action to restore 
working Americans' faith in the economy.
  The widening income gap lays before us the question of what kind of 
country we want to be: one sharply divided between the rich and poor, 
or one in which all citizens can benefit from a strong economy. I 
believe that our choice is clear. America has always been the land of 
opportunity. We should work together for policies that do not favor any 
income group, but enable all Americans to share in our Nation's 
strength and prosperity.

                          ____________________