October 12, 2016 // Uncategorized

Stark statistics and hopeful responses

By Carolyn Woo

To address the bishops of the U.S. mission dioceses on the topic “Economic Structures and Poverty,” I spent a month poring over 300 pages of articles and reports. I ended up reconnecting myself to some stark statistics and opening my eyes to some needed responses by us as a society.

Notwithstanding the bullish government report in September that showed income has risen and unemployment has returned to its pre-recession level, there has been little rise in real income over the past 15 years. Inflation-adjusted median U.S. household income has trended from $56,800 in the late 1990s to the newly released number of $56,516 for 2015. Falling and stagnant market income in the United States described the situation of 80 percent of Americans.

Before we point fingers at globalization as the culprit, I should note that this is a global phenomenon. A study by the McKinsey Global Institute showed that 25 developed countries around the world are also in the same boat, with 65 percent to 70 percent of their 800 million people experiencing flat or falling incomes.

This is not just an outcome of the recession, as the level of economic activities, measured by inflation-adjusted gross domestic product, has expanded by about 31.6 percent in the same period. The growth in the economy has not trickled down to the average household.

More disturbing is that our current federal minimum wage of $7.25 has only 65 percent of the purchasing power of the minimum wage of $1.60 in 1968, or $11.17 in today’s dollars. Thus, in these past 15 years, employee income as a percentage of the total economy has shrunk, while the share of profits to corporations has taken off.

Again, before we point our fingers, note that many of us are shareholders of corporations and partakers of these profits through our pension plans and personal investments. Over this period, through whatever mechanisms and whichever collective bodies, our society has privileged the providers of capital over the providers of labor.

Many of us may legitimately feel that we were not at the table where such decisions were made, but nevertheless we are complicit as beneficiaries of these gains. This unevenness reflects our moral values which, when examined under the light of Catholic social teaching, should invite action and advocacy for greater mutuality.

Through shareholder proposals and overall civic participation, we can even the odds a bit by supporting phased increases of the federal minimum wage, upward adjustments of the minimum wage by individual states, penalties against wage theft, the necessity of paid leaves, rights of part-time workers, profit-sharing and employee stock ownership programs.

In my research, I also followed Catholic Charities and the Catholic Campaign for Human Development as they forged new paths to address these issues in various dioceses. Beyond the highly laudable ministries for assistance to the poor, community development for resources and rights, and worker and entrepreneur training and preparation, both now also provide the capital and assistance for incorporation so that refugees and low-income workers can start their own businesses and retain profits from their labor.

Catholic Charities reports that at least 25 agencies, some with funding from CCHD, have created or assisted in creating cafes, worker-owned cooperatives, farm-to-table producers, construction businesses, services for in-home senior care, commercial cleaning, tree and lawn care, green laundering and installation of energy-efficient products. A number of these businesses have grown to $1 million in revenue per year.

There are injustices, but there are also solutions and counteractions. When “Populorum Progressio,” the 1967 encyclical of Pope Paul VI, calls for just development that benefits all, I think the examples noted above must have been part of that vision.

Carolyn Y. Woo is the president and CEO of Catholic Relief Services in the United States.

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