SUNS  4306 Wednesday 21 October 1998


UNITED STATES: STAGNANT WAGES, BUT PUBLIC UPBEAT

Washington, Oct 20 (IPS/Jim Lobe) -- The U.S. public, ignoring the economic and emotional stresses of globalisation, is more positive and upbeat about future prospects than at any time since 1964, according to a survey by the Gallup Organization released here Tuesday.

While U.S. citizens remain concerned about a growing gap between the "haves" and "have-nots" in their society, only one in four adults put themselves into the latter category. Eight out of ten agree with the statement that there is "plenty of opportunity for those who work hard to go as far as they want."

At the same time, the public is unhappy about the rich-poor gap. While more than two-thirds agree that the system "is basically fair (with) equal opportunity to succeed," 63 percent of respondents also say that "money and wealth...should be more evenly distributed."

A comparable percentage believes that government should be primarily responsible for improving the social and economic position of the poor, while only 29 percent said they believe the poor should help themselves, according to the survey.

The survey, which was based on an unusually large sample of 5,000 adult respondents, was launched one year ago precisely to measure the growing perception that the United States is dividing into two classes - the haves and the have-nots.

Since the 1980s, when the policies of President Ronald Reagan resulted in major gains for high-income families, often at the expense of the middle class and the poor, economists have found that the gap between the wealthiest and poorest families have grown to levels not seen since World War Two.

A 1995 international study found that the United States has the most unequal distribution of income and wealth of any western industrialised country - a stunning contradiction of the country's egalitarian self-image.
These trends became a major preoccupation for politicians, labour leaders, and even business executives in 1996 when massive down-sizing in some of the country's largest corporations drove home to white-collar workers that they were as vulnerable to global economic and technological change as their blue-collar counterparts in the manufacturing industries.

Some analysts worried publicly that continued wealth polarisation threatened to give rise to a new "populism," even "class warfare" or, as then-Labour Secretary Robert Reich warned, "the disintegration of the social compact" that had prevailed since the 1930s.

Many of those fears eased during the past two years when the US economy continued to grow, the bull market reached new heights, unemployment fell to the lowest level since the 1960s, and inflation remained close to zero.

Those improvements are reflected in the Gallup poll which, however, completed its survey in the Spring - before the effect of the global financial crisis was felt in the US in August. The value of US stocks has since dropped about 15 percent, contributing to some reduction in consumer confidence and warnings by top economic policy-makers of slower growth ahead.

Still, the poll results are remarkable given the fact that real median wages, despite three years of growth, are slightly below their 1989 peak and that income inequality continued to worsen in the same period - albeit at a slower rate.

The survey itself asked respondents to answer a series of questions about how they thought they were doing. While 24% described themselves as "have-nots," 67% described themselves as "haves," an increase of eight percent over 1988, the last time Gallup conducted a similar survey.

Those who described themselves as "have-nots" are disproportionately black or Hispanic. They also tend to rent, rather than own their homes, to be single and less educated, according to the report.

Twenty-one percent of respondents said they worry about their ability to meet their family's expenses all or most of the time, a decline from the 1988 level of 26% and far below the 35% who felt that way in 1984.

By US government standards, 11% of adults live in poverty but only 6% of respondents described themselves as "poor," down from 10% in 1990.

On the other hand, the proportion who described themselves as "rich" or "upper income" increased over the same period from seven percent to 12 percent.

Respondents also were asked whether their family had experienced some form of economic deprivation - of food, clothing, or health care - over the past year.

The percentage who experienced at least one of these three - 28 percent - is unchanged since 1989, although the survey noted that adults living with more than one child were significantly more likely to have suffered deprivation. At 19.9 percent, the poverty rate among children is almost twice that of adults in the United States.

At the same time, a plurality of respondents perceived a growing gap between rich and poor, a trend which 52 percent said represents "a problem that needs to be fixed," while 45 percent described it as an "acceptable part of our economic system."

Despite their concerns about the existence of inequality in the U.S. economic system, the public retains strong confidence in its fairness. Just over half of the self-described "have-nots" agree that the system is "basically fair," although 48 percent disagreed. The comparable figures for the "haves" were 74 percent and 24 percent.

The public also believes that the primary determinants of success - hard work and education and training - in the US economic system are related to merit. Gender, race, and ethnicity, are rated as among the least important variables in gaining success in the United States.

Asked what government should do to help the poor, respondents rated education, training, and more jobs as the most effective initiatives and raising the minimum wage and lowering taxes as the least effective.