Blair Bertaccini is president of the Greater Waterbury Central Labor Council. He presented the following testimony to the Human Services Committee of the Connecticut State Legislature on Feb. 9 during a hearing to consider issues of "welfare reform."
I am here today to speak about some economic trends which should be addressed when dealing with the issue of welfare reform. The supposed goal of many of these proposals is to get welfare recipients back into the labor force. This would be fairly simple if we had a full employment economy.
The AFL-CIO estimates that the job gap in the U.S. is about 13 percent -- this figure includes those who are officially unemployed, which in Connecticut is somewhere between 5 and 6 percent, part-time workers who want full-time jobs andthose discouraged workers who have been jobless for so long they have stopped actively looking for work.
Most people who go from welfare into the job market will get jobs at or near theminimum wage. A single mother with two children working full-time at a minimum wage job will not even get above the poverty line. Moreover, real wages for all workers continue to fall. U.S. Labor Department studies show that average hourlywages for non-supervisory jobs have fallen to their lowest level since 1964. In 1993, 16 percent of full-time workers had earnings below the poverty line.
We can get people off welfare by enacting some programs which do not even deal directly with the welfare system. One would be to raise the minimum wage. A study of New Jersey, which has $5.05 minimum wage, showed that employment in lowwage businesses actually went up after the minimum wage was raised. We need to restore the minimum wage to a level that one wage earner can support a family above the poverty line.
Another program to attract people off the welfare rolls would be a massive public works jobs program. Our state and our nation need projects such as pollution control, renovation and construction of housing in our cities, mass transit systems, new schools, and neighborhood health clinics, just to name some. The government should set up programs to train and put people to work in such projects at prevailing wage rates. If you are serious about getting people to work you should offer them real jobs at good wages not make-work jobs just toget a welfare check.
I know the common reply to such proposals-there is no money for such programs, let alone to run current government budgets. But this is not true.
In the 1980s the increase of total salaries of people making more than $1 million per year went up 2,184 percent, for those making between $200,000 and $1million the increase was 697 percent. The 1986 Tax Reform Act cut taxes for those making over $500,000 between 31 and 34 percent depending on income. Since the early 1950s the share of total federal tax revenues paid by corporations hasfallen from 39 to 17 percent.
The Clinton tax changes have only slightly changed this situation. What has thisresulted in? By 1993 more than 48 percent of the nation's income went to the topfifth of all households and 20 percent went to the top 5 percent, in both instances the highest levels since records began! By 1989 the top 4 percent families and individuals earned as much as the bottom 51 percent.
After getting all this loot what do the rich and the corporations do with it? Dothey invest it and create lots of new good paying jobs? No, they do just the opposite. They lay off workers and make those who are left work more and more toearn less and less.
What we should really be talking about is legislation to increase taxes on theseirresponsible wealthy and put the money to good use in a living wage jobs program. I guarantee that if you did this you would see the welfare rolls decline significantly, and disappear if you also enacted programs of low cost day care and universal medical care.
It's time to stop scapegoating victims of an economic system run amok and look at some real solutions that will create a better Connecticut for all of us.
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