Thanksgiving in Camp,
wood engraving, Harper’s Weekly, 1862 | Wikimedia Commons
Income Gap Creating Two Americas
ERNEST COREA (IDN)
day, another year. Thanksgiving, the national holiday celebrated on the
fourth Thursday every November, has come and gone once more. The rash of
pre-thanksgiving announcements heralding "sales" that offer
great and sometimes dubious bargains has ended. So have the sales.
When November gave way to December, shopping malls began assuring
anybody who cared to listen that "it is beginning to feel a lot
like Christmas." As the days wore on, that message gave way to an
urging: "have your self a merry little Christmas." All this at
a time when some have much to be thankful for, and be merry about, and
so many do not.
The U.S. Bureau of Labour Statistics has reported that the unemployment
rate, having remained unchanged for three months, rose to 9.8 percent in
November. That would mean more deprivation, more disappointment, and
increasing disquiet. Hard-working, conscientious and competent working
people are dropping back from achieving their various goals.
In November, the Thanksgiving month, when the public mood is for the
most part warm and fuzzy, a majority in Congress coalesced to vote down
legislation that would extend cash benefits for the unemployed into
2011. Frantic efforts to save the unemployed from further deprivation
followed and yielded an agreement between the Obama Administration and
The Senate adopted that agreement by a vote of 81 to 19 on Dec. 15. It
now goes over to the House of Representatives where some representatives
oppose those aspects of the agreement which, while extending benefits to
the jobless, prolong a Bush-era bonanza for the rich.
Under the agreement as adopted by the Senate, a package of provisions
includes extension of unemployment benefits for 13 months. The maximum
period during which benefits will be paid remains at 99 weeks. The
pre-recession maximum was 26 weeks.
The payroll tax which sustains Social Security will be reduced by 2
percent, for one year. Savings to tax payers could range from $1000 to
At the same time, the package extends the Bush-era tax provisions, such
as income tax cuts for wealthy families earning over and above $250,000,
for two years. The estate tax which was temporarily suspended and
becomes operational again in 2011, has been set at 35 percent for
individual inheritances of more than $5 million. Liberal Democrats are
particularly opposed to this provision which they consider too low.
A number of investments that are potentially capable of expanding the
economy and accelerating job growth will be tax deductible. Tax credits
that will support middle class tax payers, such as a tax credit for
university tuition, are also part of the package.
MIND THE GAP
The need to extend jobless benefits as well as other aspects of the
bipartisan package serve as a reminder that whatever the days of fun and
frolic in November and December might bring to many Americans, the
widening gap between rich and poor is sharply in focus.
New Census figures show the income gap between America's richest and
poorest has never been as wide as it is now. Based on that assessment,
the Associated Press news agency has reported that "the top-earning
20 percent of Americans -- those making more than $100,000 each year --
received 49.4 percent of all income generated in the U.S., compared with
the 3.4 percent earned by those below the poverty line."
Asked about the disparity, Federal Reserve Chairman Ben Bernanke said
very recently on the television program 60 Minutes: "It's a very
bad development. It's creating two societies. And it's based very much,
I think, on educational differences; the unemployment rate we've been
"If you're a college graduate, unemployment is 5 percent. If you're
a high school graduate, it's 10 percent or more. It's a very big
difference. It leads to an unequal society, and a society which doesn't
have the cohesion that we'd like to see."
Bernanke did not point out that in many inner city areas another gap
exists as well: often, too often, unemployment among African-Americans
and other ethnic minorities is above the average.
For substantial numbers across the country, there would be nothing to be
festive about, but for the concerted efforts of civil society groups who
reach out to the disadvantaged and disconnected. Many but not all these
groups are faith-based, but the beneficiaries of their actions are from
a broad spectrum of faiths.
In 2010 as before, different forms of relief and support -- cooked food,
dry goods, gift cards for the purchase of groceries -- were provided to
those who would otherwise have been unreached by the festive spirit. In
the Washington area, for instance, a consortium of civil society groups,
including faith-based organizations, supported by a grocery store,
provided food to 5000 indigent families at Thanksgiving.
The effort continues with numerous civil society organizations gearing
up to carry the message of "peace and goodwill" to men, women,
and children would otherwise be disconnected from the rest of society.
An "army" of volunteers, including the First Family, have
devoted time and energy to putting together packages of food for the
poor, hungry and homeless; as well as new toys ands clothes for their
These ennobling activities are widely appreciated, but the truly
effective support for the unemployed is job creation. Despite strenuous
efforts to end the recession that the Bush Administration left behind,
job creation has been a slow and agonizing process, while other signs
have pointed to a steady if slow upturn in the economy.
Home sales increased by some 10 percent in October/November. Retail
sales were higher than in October and final numbers are expected to put
them at a pre-recession level. Car sales have rebounded.
On the job front, however, non-farm employment rose by a meagre 39,000
in November. The figure was 172,000 in October; higher, no doubt than it
was in November but still inadequate to create a jobs-based recovery. A
generally accepted estimate is that the U.S. will need to add 200,000
new jobs a month if unemployment is to drop below 8 percent over the
next two years. Reaching that goal or getting somewhere near it is going
to be tough and burdensome.
The tactic of making an extension of jobless benefits contingent on an
extension of tax cuts for the fat cats already lapping up the cream of
wealth is wrong. That, however, is likely to happen although some
Democrats in the House of Representatives insist that they will vote
against any provisions that are weighted in favor of wealthy Americans
who have benefitted from Bush-eras concessions.
President Barack Obama, who was personally involved in some of the
negotiations and deal making, has acknowledged that protecting the
Bush-era tax benefits for the wealthy was the "holy grail" for
Republican negotiators. Without that it would not have been possible to
craft an agreement which included benefits for the jobless as well as a
number of provisions that could actually stimulate the economy to grow
Thus, while some important provisions are included in the agreement, the
gap to which Bernanke referred remains intact.
Shortly before Thanksgiving, the New York Times published a commentary
by Adam Goodheart on an illustration of Thanksgiving drawn by Winslow
Homer. The illustration could well apply to Christmas, too.
The artist divided his drawing into two sections. One depicted the
profligacy of ‘those with more dinners than appetite." The other
showed the state of "those who have more appetite than
That depiction was first published on December 1, 1860. One hundred and
fifty years on and, as the French like to say, the more things change,
the more they stay the same.
| Analysis That Matters]
served as Sri Lanka's ambassador to Canada, Cuba, Mexico, and the USA.
He was Chairman of the Commonwealth's Select Committee on the media and