Working numbers

The numbers, and there are plenty of them, in the latest Economic Policy Institute examination of the state of working families can be summarized in Maine by three charts. The first shows inflation-adjusted average family income growth in the 1980s ($10,000) vs. the 1990s ($666); the second breaks families into five income groups and shows, from ’89 to ’99 only one, the wealthiest group, had an actual gain in income; the third, a national look, shows families working more hours – a 15 percent increase during the last two decades – just to keep from losing more ground.

Four or five years ago, the fear with reforming welfare was that it would create a “race to the bottom,” in which states rearranged tax policies and social services to benefit the well off and drive the poor elsewhere. What these figures suggest is that the race, which looks more like a marathon than a sprint, already was on when the fear was first raised and that it is not only the poor who lose out, but anyone not in the top 20 percent of incme.

Most of the increased hours families are working compared with two decades ago showed up in the 1980s, but at least back then the change in income reflected the labor. In the 1990s, it was more work for less buying power for most people. Maine was like a lot of other states in this respect, only the gap between rich and poor hadn’t grown as pronounced owing to a lack of the wealthy.

EPI’s report, with Maine data prepared by the Maine Center for Economic Policy, suggests the near-continuous talk in all states of improving the business climate has improved the climate considerably for a few at the top, but has yet to lead to the promised general prosperity. Pro-business groups might wonder how much longer middle-income workers will be willing to subsidize – through lower pay, increased productivity, longer work hours – the incomes of the top earners. Small-business owners, many of whom fall into the middle-income category, might also wonder whether the climate has turned out as expected.

EPI has 10 suggestions for improving matters, all solutions the public has heard before – expand health insurance, raise the minimum wage, expand unemployment insurance. These are no doubt important, but they ought to be preceded by an understanding from lawmakers that they economic conditions they grew up with may no longer apply.