Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on this Special Order. Madam Speaker, my colleagues and I wanted to spend a few…
Madam Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and include extraneous material on this Special Order.
Madam Speaker, my colleagues and I wanted to spend a few moments on what, to me, is the most important domestic issue in our country right now: the issue of inequality and fairness for all Americans. It is at historic levels of disparity from where it should be, historically both from an economic standpoint, an ethical standpoint, and, in my view, a moral standpoint. It is important for Congress to know what the experts know and to share that with this House and with the American public.
I am pleased to partner with some of my good friends: Representative Lee, who I hope will be here soon, a good neighbor in northern California, who has done such extraordinary work around poverty and inequality; and also Ms. DeLauro from Connecticut, who has also helped us to put this Special Order together.
Madam Speaker, I yield to the gentleman from Minnesota (Mr. Ellison), my good friend and colleague, and a national spokesperson on issues of inequality.
Madam Speaker, that sounds good to me.
Madam Speaker, I do want to say, as a former small-business owner, having owned restaurants in the San Francisco Bay area for many years, I can definitely identify with your comments that all too often Main Street America, those entrepreneurs who employ most of our workers, are at a distinct disadvantage.
And, unfortunately, I always felt this as a small independent restaurant owner, that the desires of a lot of my fellow restaurateurs that were nationally owned were not necessarily my desires. I supported the community. I was
active in the community. I was in the Rotary or went to Rotary, was very active. They didn't have that kind of Main Street presence.
I do think that we have deserted that kind of--we collectively, I think, in this body, have all too often deserted that constituency, which is so much a part of not just our economy, but our culture in America.
Ben Franklin, when he started, went through and was trained by his father and his older brother. Somewhat controversially, he came to Philadelphia and walked down the street and started a business.
So, to your point, I think that is really important, that when you look at the fabric of America, what this inequality talks about--and as we go through this, it will sound from somewhat of an academic perspective because we have listened to the experts. We have listened to experts, particularly in my area in northern California at Berkeley and Stanford, but we have gone to others.
This presentation will be about what the economic history and what the economics are telling us so that everyone can accept this in terms of the historical record and the facts as Thomas Piketty put in his best selling economics book, very dry, ``Capital in the Twenty-First Century,'' which I take a lot of my influence from.
When the majority was going through their tax reform bill, I happened to pick up a compilation of economists--it was very broad, from their ideological perspective--called, ``After Piketty''; and as I was reading this, I already knew this, and I thought this tax plan is probably the worst medicine to give this environment because it will only make it worse, in my view, based on a hopeful thought that all of this will trickle down from the wealthiest.
We know that in an economy like the United States, where 70, 75 percent of it is consumer driven, you need people to spend money. Myself, as a small-business person, if people didn't have disposable income to come in my door to pay for the food, I couldn't pay my employees. I couldn't do all the things I wanted to do to engage in the community. So this is the fabric of the American economy, but it is really about the fabric of the American culture and what we want for our kids.
One of the most disturbing things is being a baby boomer and the parent of two sons in their thirties and to see their struggles as they do well and play by the rules and do as is required of them. What we are passing on, my generation and future generations, is not just the challenge of a prospectively lower life expectancy, but all the despair we see in too many communities in this country that this last election, according to the ultimate winner in the Presidential campaign, was about reaching them.
Over a quarter into his term, I defy anyone to say where the average person in multiple communities is seeing a benefit, and this is going to be a challenge.
So I put up here, there have been many famous admonitions through history, starting with Plato and Aristotle, about this issue, about the inequality issue of humans treating other humans. The first one I would like to point out because it comes from Adam Smith--Adam Smith, who wrote ``The Wealth of Nations,'' the great Scottish political economist whom many people in the Chicago school and people who believe in this idea of trickle-down economics look to and the invisible hand that he so famously wrote about.
But the quote on the top here, I think, is a very clear demonstration of his view in the late 1700s in spite of his perspective on many things, and it is the first quote on the chart: ``The disposition to admire, and almost to worship, the rich and the powerful, and to despise, or, at least, to neglect persons of poor and mean condition is the great and most universal cause of the corruption of our moral sentiments''--Adam Smith.
The second quote is from someone whom we are all familiar with. A great American, a great Republican progressive, Teddy Roosevelt, said: ``The man of great wealth owes a peculiar obligation to the state because he derives special advantages from the mere existence of government,'' a quote rooted in a passage from Luke in the Bible.
That passage says and is quoted often in our political discourse: ``To whom much is given, much is required.'' That is part of what Jesus of Nazareth said when he was giving his gospels on the mountain as part of the Sermon on the Mount or prelude to that.
And the last quote, I think, is very demonstrative for the situation we are in and leading up to these next elections both in 2018 and 2020. The great jurist, the first Jewish American to be a member of the U.S. Supreme Court, Louis Brandeis, said: ``We can either have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can't have both.''
With that, I would like to briefly go through four charts that I think are visually demonstrative of the problem we are exposed to, and I would like people who are watching to particularly look at the timeframe on the graphs.
So it has been talked about going back to when America was great. These charts will demonstrate that this period of time, that a lot of us who had parents who fought in World War II, grandparents who fought in World War I, heard their stories about that national commitment in both those instances and in both generations.
I grew up in a household outside of Lowell, Massachusetts, hearing my French-Canadian grandparents and my Irish grandparents talking about coming to Lowell, Massachusetts, to work in those textile mills for the opportunity to improve their lives and the lives of their kids.
Indirectly, of course, I benefited from that, because their kids were the first kids in their family who went to college, my parents. But they had to endure World War I, the Great Depression, and World War II, a transformative period of time that then led to what some economists will now say was really a unique period of time where there was great economic growth after the war, during the Eisenhower administration and after that, Truman through Eisenhower and beginning with Roosevelt, where everybody was benefiting.
So this great consumer economy was a benefit to everyone sharing the wealth and the historical disparities that we have come to from outside that.
So if you want to go back to the best world, the best parts of that world, acknowledging that America had real challenges there around race, and continues to have, that had to be addressed. We had real challenges around sex and sexism that had to be addressed. There were other issues about things that we needed to deal with in this country that are urgent, and we have dealt with since that time. So I don't want to make it sound like everything was wonderful. We had our challenges.
One of the great things about this country, as so many people have said, is we acknowledge our weaknesses, but we address them and aspire to move on. I would say we are at one of those points where we are particularly challenged in that regard.
So, if we could go to the first of these charts, in particular, I want you to look at the dates, because this will be consistent in the four diagrams we are going to bring up. The dates starting on the far left in the early periods, the 1920s, which actually was the gilded age, and then through to 2013.
So this particular chart talks about inequality and that historical perspective. In the United States, right now, income inequality has grown rapidly by every statistical measure for 30 years. America's top 10 percent--and this is not class warfare. This is a discussion of what the statistics tell us and what that implies for our democracy and the benefit that we all should derive as it is written in our sacred creeds in the Constitution, the Declaration of Independence, and also in our other great commentary.
So America's top 10 percent, approximately 32 million people, now average more than nine times as much income as the bottom 90 percent, or about 293 million people. Think of that. The top 10 percent, 32 million people, many of them got their wealth from talent and good work. Some of them have not had as much talent and hard work, and that is human nature.
But because of the policies that we have passed--and as my friend from Minnesota has alluded to, the influence in politics, in our election process, that is more extreme than it has ever been
in the history of this country. It has always been there. It has always been part of our dynamic.
Being from California, there is a famous quote from a former speaker of the State assembly that money was the mother's milk of politics, sort of a day-to-day look as a working politician, but now we are at extreme, extreme levels.
Independent expenditures, to what my friend from Minnesota talked about, in the Supreme Court decisions around Citizens United and SpeechNOW, two decisions in 2010, have created a world that this country has never seen before, where the Supreme Court decided in those two decisions by a 5-4 majority that the American public and their representatives had very limited ability to put any kind of controls over what is called independent expenditures. Those are funds that are written. And the one condition is those people who are doing that cannot communicate or be in party with the campaigns.
You can go and see how that has dramatically changed in the last cycles and will continue to get worse in this next cycle. This last cycle, the Presidential cycle, it got up to, I believe, just about $9 billion of independent expenditures that are largely not held accountable.
So next, America's top 1 percent, roughly 3.2 million people, averaged 40 times more than the bottom 90 percent. America's top 1 percent, or one-tenth of a percent, or roughly 325,000 people, average over 198 times the income of the bottom 90 percent, or roughly 293 million people.
The top 1 percent of America's income earners have more than doubled their share of the Nation's income since the mid 20th century. This is the period post-World War II. The incomes of the top 1 percent peaked last during the 1920s, during the start of the Great Depression. So you can see this again, the concentration.
Again, people will start pounding their chest and saying: ``You are starting class warfare.'' The numbers speak for themselves. These numbers are driven and they are attributed--if people at home want to see where we got these numbers so they are not driven by fake news, they are driven by impartial, nonpartisan constituencies. And the point is just to say that we have got a problem.
So, again, at the last peak, this gave us great social displacement, gave us, arguably, the conditions that created World War I, definitely gave us the conditions that gave us the Great Depression, gave us the conditions, fortunately, that led to Franklin Roosevelt and the New Deal, and through this sweet period where the economy was growing by 5, 6 percent, and it was generating benefit across all demographics and did what Henry Ford said when he started making his Model T. He said:
I want a product that is a quality product that my workers
can afford, so I want to pay my workers enough to pay for
this car.
This is the sweet spot that people talk about going back to.
Now we are here. Well, if history is right and taught us anything, and what Piketty talks about in a very classic economic historian view and his view of Western democracy and economic trends, his view is these are inevitable.
This is my perspective, of course. I am not trying to put words in Dr. Piketty's mouth.
But this was sort of an anomaly, when you look through Western economic industry, according to Piketty, which was the best-selling economics book in modern history.
So that would make one wonder what comes after this, and what Piketty suggests and others suggest is there is a correction. And the question, I think, we have for this time in our history is: What kind of correction is that going to be? Is it going to be the correction that we want in this House, this sanctum sanctorum of democracy, the House of Representatives, where we battle it out, we express ourselves and our ideologies, our perspectives--our constituencies have very different world views--but we acknowledge that this is not right, this is a problem, and this is not America as we envision it or our great leaders envisioned it, whether it was Washington or Lincoln?
Lincoln once famously said:
If wages and capital are not equal, if they become
different, then we have lost democracy. And if capital, in
particular, gets beyond wages, we have really lost democracy.
And he also cryptically said:
I have the Confederate Army in front of me, but I have the
northern banks behind me, and, honestly, I fear the latter
the more.
There is nothing wrong with capital; there is nothing wrong with investment; but, from a historical perspective, this is not a healthy economy. We want a mix, and we want everybody to enjoy it.
So just to go on, between 1992 and 2002, the 400 highest incomes-- that is, individuals--reported more than double, even after the dot.com bubble burst. So, corrections, they still increased more. The benefit of the recoveries after the dot.com bust and after the recession benefited, again, this disparity, the people at the top end of the spectrum. Since 1979, the before-tax incomes of the top 1 percent of America's households increased more than four times faster than the bottom 20 percent.
Through much of this introductory part, we have been talking more about everybody in the middle income, but it has really disadvantaged poor people.
So when we talk about doing away with healthcare or Social Services or food stamps, it is really a cruel, sort of Dickens type of bargain where people who are already suffering will suffer more.
CEO compensation. With the unions playing a smaller role than they did decades ago--and, during this period, during the Eisenhower administration, in particular, almost a third of American workers were in a union--it was the glory days of America; but it was also the glory days, and this wasn't a coincidence, of American workers having a voice in American economy and with their employers, where they partnered.
So since then, CEO compensation and average workers have changed. With unions playing a smaller role, down to 11 percent from almost 35 percent, than they did decades ago, the gap between CEOs and workers was eight times larger in 2016 than 1980. Union participation has declined to 11 percent, as I said, from its peak in the 1940s and 1950s.
As of 2015, 100 CEOs--and I don't say that they don't have talent and capabilities, but this is just a historical fact. Since 2015, 100 CEOs had company retirement funds worth $4.7 billion, which is a sum equal to the entire retirement savings of the 41 percent of U.S. families with the smallest retirement funds. That is just the 41 percent that don't have retirement.
So imagine that; 100 individuals, who are supposed to be not just our economic captains, they are supposed to be our social and community captains, and they were once. In the 1970s, CEO compensation was roughly about four times the median income for their workers. So if you went to Ford or Motorola, there was a different corporate culture then, a feeling of social responsibility. It still exists, but it exists in this context: Now it is almost 300 times.
So when you look at large companies that are global, think of that, of their median global employees, this is the disparity. So it is just another thing that we should be cognizant of.
Retirement savings. Workers with employer 401(k) plans have a median balance of just $18,433.
So let's talk for a minute about paycheck income, and then I would like to ask if my colleague would like to jump back in. This will only take a second.
So paycheck income. We are talking about a few different things, but they all add up to the same thing. So what do you get? Your paycheck, if you are lucky enough to have investments in your home or in the stock market or in any other kind of investment.
Less than half of American workers actually have investments on Wall Street. So when we look at Wall Street going up, this is the disparity between what we measure as helping the economy and what is happening on Main Street.
So the average person on Main Street, who doesn't have any investment on Wall Street--and it is interesting. When Wall Street started to go down recently, it was because there were statistical reports from the Department of Labor that wages were finally coming up. It is not lost on me that Wall Street would be concerned
about inflation because wages are finally going up for American workers, which is obviously a problem.
Paycheck income. For more than three decades, wages have been stagnant. Typical American workers and the lowest-wage workers have seen little or no growth in their real weekly wages in that time. So when you consider cost of living, which is going up exponentially in areas like where I live, in the San Francisco Bay area, and these urban areas, like D.C., where young people are constantly moving to because that is where the jobs are, between 1979 and 2007, paycheck income of the top 1 percent of the U.S. earners exploded by over 256 percent; 256 percent for the top 1 percent, but stagnant for the rest of us.
While productivity has increased at a relative rate since 1948, since the 1970s, wages have not. So we are more productive than we have ever been. The American workforce is more productive, when we talk about these glory days, than they have ever been because they have accepted compromise and working with innovation to make us more productive.
We have put a second income into the household. The value of women coming into the workforce has made such a change, not just to our economy, but to our way of life. Unfortunately, as opposed to other industrialized countries, we haven't provided the infrastructure for usually the woman who comes into the workforce to replace their activities at home; so early education, high quality education, things like that, not to mention the fact of pay disparity between genders, which I will now go to.
American women are now almost as likely to work outside the home as men. So in 1973, 14 percent, if memory serves me right, of women with children were in the workforce full time; 1973. By 1994, that number had changed to 74 percent. So think of that in the context of social change; the benefit it gave us from having talented women being in the workforce and being more in the culture, but we didn't provide the infrastructure that they had provided, in my view, when they were at home raising kids and being part of the community. It was a good change for this country, but we didn't adapt to it from a public sector.
You look at the French and the Western Europeans, it didn't happen as dramatically there, but they provided the infrastructure, which we should here.
Women still make up only 27 percent of the top 10 percent of the labor income earners; so this is the glass ceiling. Among the top 1 percent of women, they make up slightly less than 17 percent of workers. At the top 1 percent level, a woman makes up only 11 percent.
Bonus pay. This is a big issue that has come in the last 20 years. In 2016, we were going to incentivize, or before that, during the Clinton administration, incentivize performance. Unfortunately, our performance wasn't tied enough to the benefit for everybody, the economy, the company, the investors. It was more skewed toward the investors.
So in 2016, Wall Street banks--this was 2016, just recently--doled out $24 billion in bonuses to 177,000 of largely New York Wall Street- based employees; $24 billion for 177,000 of America's 320-plus million people and 175 million workers. This is 1.6 times the combined earnings of all 175 million Americans who work full time at the Federal minimum wage of $7.25.
The CEO of McDonald's--when I was in the California Legislature when we were trying to raise minimum wage, we figured out they were fighting against raising it to $15 and indexing it for inflation, but the CEO's compensation was almost $35,000 an hour. I don't think his commitment or his quality to work was that different, and it wouldn't have been in the 1970s.
This bonus pool was large enough to have lifted all 3.2 million U.S. fast food workers or all home care aides or all restaurant servers and bartenders up to $15 an hour.
Madam Speaker, I will take a little break if it is appropriate and yield to the gentleman from Minnesota (Mr. Ellison).
Mr. Speaker, I thank my colleague from Minnesota (Mr. Ellison) for his passion and his commitment.
I just want to mention a couple things before I turn it over to my incredible colleague from Connecticut, who brings such passion and real insight to these issues.
But as the gentleman from Minnesota (Mr. Ellison) said about minimum wage, in the 1960s, if you worked a full-time job and you earned the Federal minimum wage with an average amount of overtime, you earned 55 percent of the median household income nationally.
So think of that. You could work a minimum wage job in the sixties, and you could have enough to earn at least half of what the rest of your citizens were doing. So you could pay for housing. You could get by.
I know there are a lot of things, but if we had indexed that for inflation this whole time, it would be very different.
And just a few statistics on extreme poverty, because Mr. Ellison brought this up.
So extreme poverty or absolute poverty is the definition by the economics profession. It is not limited to nations outside our borders. So we like to talk about the rest of the world has come up from $1 a day on average of these poor countries to $2 a day.
To my great chagrin and shock, 3.2 million people in the United States now live on under $2 a day. Think about that. The United States of America, 3.2 million people. This is extreme poverty that we often ascribe to very, very underdeveloped poor countries.
According to Oxford economist Robert Allen, absolute poverty in the United States is anything under $4 a day due to the costs.
Can you imagine trying to live on $4 a day. But, yes, over 3 million of our fellow citizens attempt to.
In comparison, let's say based on this, if you took the $4, then you go up to 5.3 million Americans are in this economic definition of absolutely poor by global standards. There are more people in absolute poverty in the United States than in Sierra Leone or Nepal.
In comparison, zero percent of the populations of Germany, Iceland, Switzerland live in absolute poverty. Two-tenths of a percent of Great Britain and three-tenths of a percent of France live in absolute poverty, respectively.
So this is just the extreme that I think we have to hear about because too often we gloss over the issues in this Chamber of people who are really struggling, the absolutely poor, the very poor, the most vulnerable amongst us, while we correctly try to help everybody in the bottom 90 percent, particularly middle income, but we have got to help everyone.
With that, I yield to my wonderful friend from Connecticut, who is such a passionate, determined, eloquent spokesperson in this Chamber for issues around poverty and inequality.
No, the thanks are all mine, my friend and colleague, for your passion and your empathy for understanding.
Since I quoted Scripture, I just want to tell people watching, we were both raised Catholics, and a lot of that brings in the social gospel and our passion for it. I am not a Biblical scholar, so I may refer to something inaccurately.
I thank the gentlewoman for her lifetime commitment on these issues.
And how important at this critical moment where we live in this Dickens-kind of America, where we are doing so much as a survivor of cancer, both of us, and we know of the investments in the NIH and the National Cancer Institute and every other disease. There is just this strange dichotomy in this Dickens-kind of world where we are benefiting from rational, dispassionate, bipartisan efforts on that hand, and on the other hand, we let this continue to exist. And I would argue that we are making it worse in our decisions in the last 2 months. So I thank the gentlewoman for being here.
This chart, to be boring after that wonderful, compassionate moment, just talks about total wealth. So you see, the total wealth over these same periods of years for the richest 10 percent--this 15 percent is families between 10 percent and 50, so this is the 50 percent margin. And this is everything below the 50 percent.
So 50 percent of Americans are down here. The lowest 1 percent, you can see where their wealth is. Wealth inequality is ever greater than income inequality, so this is total wealth. In 1982, the poorest American listed on the Forbes list of America's richest 400 had a net worth of $80 million, and they had a life of value. Many of those people had a very deep commitment to this country and a social commitment. I know many of those people.
That generation, across the board, had a different view of things. But it was in our corporate culture, and I would argue, unfortunately, shareholder profits has driven too many very shortsighted investments in this country, both in the private sector and certainly in the public sector.
In 2016, the richest Americans needed a net worth of $1.7 billion to reach the Forbes 400. The average member held a net worth of $6 billion, over 10 times the 1982 average, after adjusting for inflation.
We will go to our next chart, and then I will wrap up, Madam Speaker.
The net worth of America's top 1 percent holds nearly half of the national wealth invested in stock and mutual funds. So this goes to watching the stock market--while it is important for this country and I am not disparaging that--this disconnect, it may be going up, but does it benefit everyone?
It benefits everyone to a degree, but certainly to a lesser degree, I would argue, than it has in the past, in those years of post-World War II. The billionaires who make the Forbes 400 list now have as much wealth as all African-
American households, plus a third of America's Latino-Hispanic populations combined. In other words, 400 of our wealthiest citizens have as much wealth as 16 million African-American households, and 5 million Hispanic-Latino households.
At the end of the 20th century, the typical White family held a net worth six times greater than the typical African-American family. That gap is growing.
So this particular chart is from the work by Piketty. The blue line, as you can see, is the percentage of capital, the amount of capital as a percentage of GDP in this country, and the red line is wages. These green bars are where we have had recessions.
The important point to make in all of the slides is, the sweet spot where wages and capital were close to what Lincoln admonished us we should be, is where everybody benefited. And when you get to this, as in the Gilded Age, the concern here tonight is: What do we do about this? Do we respond, as we always have, through our civic institutions, to this institution, to this room, where Americans have struggled with these issues and come out with a product that largely benefited everyone, all Americans?
And it didn't benefit it based on any kind of demographic group. It benefited it in its best moments based on the merit of your hard work and willingness to work an honest day. Most Americans that I know, working people in my district and throughout this country that I have visited, don't ask for too much, in my view. They aspire to make enough to buy a home, to raise a family, to retire in comfort, and to leave the next generation wealthier and fuller than their generation.
We are failing in that obligation, and some of that obligation is for all of us. And I would reach out to those who are benefiting the most from this, and many of them, Warren Buffett and others, Bill Gates, have addressed this issue. But we really need them to lead us to a conversation about if this is right. If this historical record and the economic historians are right, how do we correct this? How do we correct it in such a way that is constructive and use these institutions to make sure that we improve upon this and really make America as great as it can be.
So in my opening, I talked about the Christian admonition from the Bible about to those who are given much, much is expected, required. This has been through our political liturgy, such as it is in this room and others, that there is a social obligation, a social contract. And we have an obligation to protect individual hard work and merit. Those two things are things that Americans believe in. And when they work together, they work for everyone.
The other thing that has come from many of our spiritual backgrounds is something that John Winthrop talked about when he left England and brought those Puritans to the shore of Massachusetts to start anew, a place that I have been to many times in my youth growing up outside of Boston.
But Mr. Winthrop, future-Governor Winthrop, admonished to his shipmates, he said that where we are going, we should always be as a city upon a hill. And it comes from the Sermon on the Mount, that we should be as a city upon a hill because the rest of the world will look upon us.
It has been popular in our culture in both parties. Jack Kennedy, in a speech in 1961 before the Massachusetts legislature as President said: ``We must always consider that we shall be as a city upon a hill--the eyes of all people are upon us.''
Today, the eyes of all people are truly upon us--and our governments, in every branch, at every level, national, State and local, must be as a city upon a hill.
Kennedy continued and finished by saying history will not judge us, and I would say that this is true for us today, here.
Kennedy said: ``History will not judge our endeavors--and a government cannot be selected--merely on the basis of color or creed or even party affiliation. Neither will competence and loyalty and stature, while essential to the utmost, suffice in times such as these.''
Kennedy concluded: ``For those to whom much is given, much is required.''
And I conclude with Ronald Reagan who talked about a city on a hill often. He talked about it on the eve of his election in 1980. And as his farewell address, his last address to the country in the Oval Office on January 11, 1989, Reagan said: ``I've spoken of the shining city all my political life, but I don't know if I ever quite communicated what I saw when I said it. But in my mind it was a tall, proud city built on rocks stronger than oceans, windswept, God-blessed, and teeming with people of all kinds living in harmony and peace; a city with free ports that hummed with commerce and creativity.''
And Reagan concluded by saying: ``And if there had to be city walls, the walls had doors and the doors were open to anyone with the will and the heart to get here. That's how I saw it, and see it still.''
Ronald Reagan was right. Jack Kennedy was right. We should be as a city on a hill. And with the inequality we currently have in this country, I would argue the rest of the world does not look at us that way.
If we want to fulfill those obligations handed down to us through Scripture and our own political scripture, we have to have the courage and the confidence to address these issues in this Chamber.
Madam Speaker, I yield back.