Ending Hunger in America, 2014 Hunger Report Introduction - Page 20

INTRODUCTION $12.78 an hour, but IBISWorld, an independent industry research firm, reports that workers are paid $8.81 hourly on average.52 A study by the Committee on Education and the Workforce in the House of Representatives found that in Wisconsin, a typical Wal-Mart store costs taxpayers $5,815 per employee because workers qualify for, and participate in, public safety net programs.53 In the early twentieth century, Henry Ford realized that to build a larger market for the cars he was producing, workers such as the ones he employed in his factories needed to earn enough money to afford one. Ford doubled his workers’ wages, and as factory workers everywhere dreamed of coming to work at his plant, it led other employers to raise wages to keep their workers from bolting to Ford at the first opportunity.54 The U.S. economy has changed a great deal since Ford’s day. So has the thinking at its largest companies. When Henry Ford passed away in 1947, CEOs at top U.S. companies were earning on average about 20 times more than a rank-and-file worker.55 By 2012, CEOs were earning 204 times the average wage.56 The divergence between what companies pay their executives and Franklin D. Roosevelt Presidential Library what they pay average workers has been the source of a wide-ranging national conversation about income inequality. Between 1978 President Franklin D. and 2012, CEO compensation rose by 875 percent, while worker compensation rose by an Roosevelt signs into law the Social Security average of 5.4 percent.57 Act in 1935. Behind Exit polling during the 2012 election showed that most Americans believe that the him is Frances Perkins, economy is not working for them; 76 percent strongly believed that the rich are getting richer Secretary of Labor and and the poor are getting poorer.58 A 2011 study by the Pew Economic Mobility Project found first female cabinet that four out of five Americans believe that the government does an ineffective job of helping member, who pushed the president to enact poor and middle-class people.59 Americans are clearly frustrated. massive public works By some measures, such as productivity growth or GDP, the U.S. economy has performed projects and create jobs exceptionally well over the last few decades. Yet real wages have been stagnant.60 Income for millions of uneminequality has widened to levels not seen since the financial crash that caused the Great ployed workers. Depression. The New Deal is a useful reference point for us today. During the New Deal, the government attacked income inequality and succeeded, putting the country on a path of broadly shared prosperity that lasted for decades. In the United States, our concept of a social contract is rooted in the New Deal, the policies and institutions created by President Franklin D. Roosevelt’s administration in the 1930s. A social contract is basically a right to economic security. At the beginning of the chapter, we explained that hunger and poverty are indivisible. Here at the end, let’s turn that around. www.bread.org/institute? ? 2014 Hunger Report? 29 n