[Congressional Record (Bound Edition), Volume 150 (2004), Part 14]
[Senate]
[Pages 18707-18710]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       WIDENING OF THE INCOME GAP

  Mr. KENNEDY. Mr. President, I draw to the attention of the Senate an 
issue which many of us have been concerned about for some period of 
time. Now it has reached the front page of some of

[[Page 18708]]

the leading newspapers of this country, and it is something that is of 
central concern to families all over this Nation. I refer to the 
excellent opening yesterday of a series by the Washington Post, 
yesterday's called ``As Income Gap Widens, Uncertainty Spreads.'' This 
is an enormously interesting column.
  I ask unanimous consent that excerpts from this column be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

       Figuring out what the future holds for workers is key to 
     understanding a historic shift in the U.S. workforce, a shift 
     that has been changing the rules for a crucial part of the 
     middle class.
       This transformation is no longer just about factory 
     workers, whose ranks have declined by 5 million in the past 
     25 years as manufacturing moved to countries with cheaper 
     labor. All kinds of jobs that pay in the middle range--are 
     vanishing, including computer-code crunchers, produce 
     managers, call-center operators, travel agents and office 
     clerks.
       The jobs have had one thing in common: For people with a 
     high school diploma and perhaps a bit of college, they can be 
     a ticket to a modest home, health insurance, decent 
     retirement and maybe some savings for the kids' tuition. Such 
     jobs were a big reason America's middle class flourished in 
     the second half of the 20th century.
       Now what those jobs share is vulnerability. The people who 
     fill them have become replaceable by machines, workers 
     overseas or temporary employees at home who lack benefits. 
     And when they are replaced, many don't know where to turn.
       Robert Boyer retrained in computers after the plant closed. 
     But tech companies told him they wanted five years' 
     experience, not a certificate from a six-month course. So he 
     works for $11.50 an hour at Home Depot, using the wisdom of 
     four decades as plant electrician to help customers pick 
     light bulbs for their remodeled kitchens.
       Boyer turns angry at any suggestion that the jobs picture 
     is not that bad. ``When these guys get on the boob tube and 
     say there's jobs out there, you just gotta go out there and 
     get them, it makes me want to go out there and grab them by 
     the throat and say, `Where? Where are the jobs at?''

  Mr. KENNEDY. Mr. President, I highlight what this story is really 
about. I think we will find--I certainly do in my home State of 
Massachusetts and my travels around the country--that this is a reality 
check. This story is a reality check of what is happening in cities, 
towns, urban areas, and rural areas across the country.
  It says:

       As Income Gap Widens, Uncertainty Spreads.

  I quote the Washington Post:

       The vanishing middle class.
       Now what middle class jobs share is vulnerability . . . The 
     people who fill them have been replaceable by machines, 
     workers overseas or temporary employees at home who lack 
     benefits, and when they are replaced they don't know where to 
     turn.

  The article continues:

       All kinds of jobs that pay in the middle range are 
     vanishing, including computer code crunchers, produce 
     managers, call center operators, travel agents and office 
     clerks.

  And the list goes on, and the article goes on and on about what is 
happening to middle-income workers in the United States of America at 
this time.
  I find that this article is a restatement about what many of us 
believe has been happening for some time and trying to make it a point 
to try to do something about it. But we have been rebuffed and the 
ideas have been rejected in the Senate, and certainly by the 
administration.
  When we are talking about dealing with some of the issues, which I 
will comment on, we find an administration that says no to an increase 
in the minimum wage, no to extending unemployment compensation, no in 
terms of overtime, all which would have a great impact on the middle 
class.
  Now, what do we hear on the other side? First of all, we heard from 
the President of the United States in New York yesterday: ``The economy 
is strong and is getting stronger.'' This is from a speech the 
President made in New York yesterday, even though New York has lost 
240,000 jobs since the President took office.
  Also yesterday, in New Hampshire, the President said: ``The economy 
of ours is growing.'' New Hampshire's unemployment rate is 32 percent 
higher than when the President took office. The New Hampshire economy 
has lost more than 7,000 jobs. But according to the President: ``The 
economy of ours is growing.'' And according to the President yesterday: 
``The economy is strong and is getting stronger.''
  And then we see, of course, what the President said at the time of 
the Republican Convention: ``We have seen a shaken economy rise to its 
feet.'' Well, how can it be this way? How can the President of the 
United States be saying ``the economy is strong and is getting 
stronger'' and then we have these reports here?
  Well, let's look at the facts. Let's look at what has been happening 
over the period of the recent years. If we look at the recovery the 
President talks about, as shown on this chart, the current recovery is 
depicted by this red line right here in terms of job growth. If you are 
looking at the recoveries before 1991, you see the job growth that went 
up, as shown here. And if you look from 1991 to 1993, this is the job 
growth here. It is basically the Clinton job growth.
  We see the difference between the Clinton job growth and the Bush job 
growth. Make no mistake about it, Presidential leadership makes a 
difference. Look at the record. During President Clinton's 
administration, 22 million jobs were added. During President Kennedy's 
administration, we had one of the longest periods of economic growth 
and price stability that we had in that century up until the time of 
President Clinton. So Presidential leadership does matter.
  We have the President saying: Everything is fine. We are growing 
stronger and stronger. It is not the Democrats who are saying we have a 
real crisis in the middle class. Here we have one of our national 
newspapers that is saying exactly what many of us have been saying for 
some period of time.
  Now, what are the facts? We can see the economic record. We have lost 
1.7 million private-sector jobs from January of 2001 to August 2004--
1.7 million jobs lost, not gained but lost, here in the United States. 
We have gone from 111,600,000 to 109,800,000 jobs.
  Let's look at what is happening across the country. Here is a chart 
that shows, under President Bush, unemployment is higher in 45 of the 
50 States. The States that are marked in red on this chart are States 
with higher unemployment than when Bush took office. The States with 
the same unemployment as when the President took office are marked in 
yellow. The States marked in green have lower unemployment than when 
the President took office, which are Louisiana, Nevada, Hawaii, and 
Delaware--four States. For all of the other States, you see the loss of 
over 1 million jobs. We have higher unemployment not only in some 
regions of the country but generally throughout the country.
  What is happening in terms of the new jobs? As shown on this chart, 
most new jobs in the Bush economy pay low wages. This is not something 
we are saying over on this side, the Democratic side. This is the chief 
economist for Morgan Stanley, who says 81 percent of the growth in jobs 
is in the low-wage industries: janitors, salespeople, movers, 
repairmen, and drivers. It is interesting, those jobs do not have the 
benefits. Those jobs do not have the health insurance. Those jobs do 
not have any kind of sick leave. Those jobs do not have any kind of 
protection in terms of pensions or anything else. And it is 81 percent 
of the growth in jobs, according to Morgan Stanley. Jobs in the high-
wage industries--construction jobs, white-collar jobs--are the 
remaining 19 percent. So we have seen that whatever jobs have been 
created have largely been at the lower level.
  This chart is from the Economic Policy Institute. It shows the 
disparity in pay between growing and shrinking industries--$51,270 for 
the expanding industries, $30,368 for the contracting industries--41 
percent less. So this is saying essentially what the previous chart 
showed; and that is, the jobs that are being created even now are still 
not paying well.
  Let's see what is happening to the families across the country. These 
are median household incomes. This is what is happening in working 
families over the period from 2000 to 2003. The real purchasing power 
has gone down some $1,500.

[[Page 18709]]

  So we say, all right, this is the dilemma. You are sure it is a slow 
economy, but what in the world should we expect? We all have to share 
this burden, and it is too bad that workers have to share it. What is 
so bad about that? Well, I will show you what is bad about that, and 
that is, we have seen that productivity is growing 15 times faster than 
wages--workers are working longer, they are working harder, and they 
are producing more, but they are not seeing the benefit in terms of 
wages. They are not seeing it. This is the largest disparity in terms 
of productivity versus wages in the recent history of this country. So 
the workers are working longer. They are working harder. They are 
producing more. But do you think that would reflect itself in increased 
wages?
  And let me show you this chart here. In the Bush economy, we find 
that corporations are getting a bigger and bigger share of the pie. 
Here is the share of corporate profits having increased by 65 percent 
over workers' wages. This gap here is the largest gap we have had in 
the postwar period: larger corporate profits, workers with increased 
productivity, working longer and harder and yet they are still not able 
to make ends meet. These charts are going back to what the Washington 
Post pointed out here: ``As Income Gap Widens, Uncertainty Spreads.'' 
That is what is happening in the economy.
  And we can see the difference between this and other recoveries. The 
average in the last eight recoveries is corporate profits going up 14 
percent and the workers' wages going up 8.6 percent. But here in the 
Bush recovery you have corporate profits going up 39 percent and 
wages--adjusted for inflation--going down by half of 1 percent. There 
it is.
  We ask: Is this President doing anything about it? What is he doing? 
Opposing an increase in the minimum wage, saying no more overtime for 
middle-income families, and no, you are not going to get the 
unemployment compensation you paid into, that you are entitled to as a 
matter of right.
  This is an extraordinary chart, where you get, on average, CEOs 
making $8.1 million versus the average worker's $26,000. This is 
startling. It is the average, not the median. It is the average because 
so many of the CEOs make so much more. The point is, the disparity 
between the CEOs and the workers is 300 times.
  Now, it is against that background that we have many being laid off 
and new jobs not paying well, that we have the administration putting a 
lid on any of the efforts we can provide in the Senate in terms of 
unemployment compensation and protecting overtime. And what has been 
happening out there? What has been happening in the meantime? We know 
the wages these workers are receiving, if they have been laid off and 
they get a new job, are not keeping up with the cost of things.
  Here it is over the period of the last 4 years: Health insurance has 
increased 59 percent. If the middle income is interested in their 
children being able to go to schools and colleges, tuition has gone up 
28 percent. Interestingly, there is no increase in Pell grants, 
absolutely none, although in January of 2000, when the President was 
running for office, he said he would ask for an increase in the Pell 
grants. We never received that. And in the appropriations this year 
they will see no increase whatsoever. Housing costs are up 27 percent. 
Gas is up 22 percent. Milk is up 13 percent.
  In my part of the country, in Cape Cod last week, for a gallon of gas 
it cost $4.05. I know it is about $3.23 a gallon in other parts of the 
country.
  You are asking a person to work for a minimum wage of $5.15 and to 
buy a gallon of milk at $4.05. The administration says they are opposed 
to any real increase. These are hard-working men and women, more than 7 
million of them, many women with children. It is an issue which affects 
many of those hard-working men and women of dignity.
  If you look at what has happened in terms of health care costs, the 
consumer price index has gone up 1.6, 2.4, 1.8, 5.9, and total health 
care costs cumulatively, 59 percent. One might ask, what in the world 
can we do about it? One of the things we might be able to do about it 
in terms of drug costs is reimportation. We could do something about 
that. We have a bipartisan bill. Yet we can't get it on the floor. We 
can't get an up-or-down vote. Those of us who would support it would go 
for an hour evenly divided. Let's get accountability. Let's do 
something about the cost.
  When you ask, so you are complaining about the increase in cost, what 
is your idea? One of the ideas is the reimportation of drugs. But no, 
we can't do that. We have dealt with all the issues of safety. I yield 
to no one in this body in terms of the safety of health care. We are 
unable to permit the Medicare to negotiate lower drug prices for 
seniors. We could do something about that. But no, we are denied the 
opportunity. As a result, we have exploding costs that are going out of 
control in terms of health care generally and in terms of prescription 
drugs--all impacting middle-class families. More and more of them are 
losing their health care coverage, their security. They haven't got 
wage security. They don't have job security. They don't have education 
security. They don't have health security. This chart illustrates that, 
every single year, more than a million, from 2000 to 2003. The economy 
is strong? The economy is getting stronger? Everything is OK? Hello.
  It isn't just those on this side of the aisle who say that this is 
what is happening; we have seen this in newspapers all across the 
country. All you have to do is visit any town in America. We know what 
the results are: We have 13 million children hungry or on the verge of 
hunger here in the United States. And the economy is getting stronger? 
Eight million Americans are unemployed, and nearly 3 million have lost 
unemployment benefits since Republicans ended the program. Seven 
million low wage workers wait 7 years for a minimum wage increase. That 
used to be a bipartisan effort, to have an increase in the minimum 
wage. President Bush 1 signed an increase. President Nixon signed an 
increase. It was bipartisan for years. But no, we can't even get a vote 
on it.
  When we offer an amendment on one of the bills, what do our 
Republican friends do? They pull the bill. State Department 
reauthorization, pull the bill; add it onto the reform of welfare, pull 
the bill down; class action, pull the bill. We don't want to even vote 
on it. Imagine that. Imagine not even wanting to vote on it.
  Six million have lost overtime protection under the new Bush rule. 
Let me give a quick review of who is impacted. These are the 
individuals who would be impacted: police, nurses. They are our 
homeland defenders, the first responders. They are the ones whose 
overtime is threatened.
  In the last several days, my colleague and friend Senator Kerry has 
offered a real alternative to the current economic challenges we are 
facing, that middle-income Americans are facing every single day in 
terms of lost wages, lost jobs, lost health insurance, lost 
opportunities for education. It talks about creating good-paying jobs, 
strengthening the middle class, and restoring America's competitive 
edge and cutting the deficit.
  I ask unanimous consent that an excerpt of this plan be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    The Kerry-Edwards Economic Plan

       Under George Bush, America has lost 1.6 million private-
     sector jobs. The typical family has seen its income fall by 
     more than $1,500. Real business investment and exports are 
     both down under George Bush, the first time we have a decline 
     during a Presidential term in over 70 years. And all George 
     Bush has had to offer are excuses and bad plans that put job 
     creation and the middle class last while favoring special 
     interests.
       John Kerry and John Edwards believe that America can do 
     better. They have an economic plan that will unleash the 
     productive powers of America's workers and companies, 
     creating millions of good-paying jobs and strengthening the 
     middle class. Their economic plan is built around four basic 
     principles:
       (1) Create Good-paying Jobs in America
       End tax breaks for companies creating jobs overseas and cut 
     taxes for 99 percent of taxpaying corporations.

[[Page 18710]]

       A New Jobs Tax Credit to encourage hiring by manufacturers, 
     other businesses affected by outsourcing and small businesses 
     in 2005 and 2006.
       Level the playing field by enforcing out trade agreements 
     and trade laws.
       (2) Strengthen Middle-class Families by Cutting Taxes and 
     Lowering Health and Energy Costs
       Cut taxes for 98 percent of families, including new tax 
     breaks for education, child care, and health care.
       Cut health premiums by up to $1,000 for families.
       Provide $25 billion in a State and Local Tuition and Tax 
     Relief Fund.
       (3) Restore America's Competitive Edge
       Make America energy independent of Middle East oil.
       Invest more in research and development, including lifting 
     the ban on stem cell research and making broadband universal.
       Double the Manufacturing Extension Partnership (MEP).
       Provide a tax cut on up to $4,000 of college tuition and 
     investment in training.
       (4) Cut the Deficit and Restore Economic Confidence
       Cut the deficit in half in four years by restraining 
     spending growth, paying for all proposals, and eliminating 
     corporate welfare.
  Mr. KENNEDY. I thank the Chair.
  The ACTING PRESIDENT pro tempore. The 10 minutes we are currently in 
are reserved for the Senator from Iowa.
  The Senator from Iowa.

                          ____________________