WASHINGTON (WOMENSENEWS)–We don’t need a panel of blue-chip economists to tell us that we have been in a recession since March. Those women who work full-time, full-year, with incomes below $25,000 a year–46 percent of African American women, 52 percent of Latinas and 35 percent of white women–barely experienced the good that came with our 10-year economic expansion, but they were and they remain on the front lines of the downturn.
Without official notification of recession, they saw income imperiled and second jobs and overtime opportunities disappear. It got worse after the attacks on Sept. 11, but while the economy took a hit, it already had been careening downward since March, when President Bush made his bid to cut taxes. That was an attempt that had the trappings of populism–every taxpayer, supposedly, was to get at least $300–but an outcome that blatantly favored the wealthy.
Here we go again. The House of Representatives has crafted a stimulus package so patently a charade that even Treasury Secretary Paul O’Neil described it as “show business.” In other words, House Republicans asked for everything they had ever wanted to give to their corporate bosses, including the repeal of the alternative minimum tax. They asked without regard for the folks who are really suffering in our economy, those folks at the bottom who have been laid off from their service jobs–disproportionately held by women.
They asked without considering the economic implications of such giveaways, which would push the tax burden onto those who could least afford it. And they asked without considering the many ironies that arise when a secretary who earns $25,000 at the Ford Motor Company pays a higher federal tax rate, 15.6 percent, than her corporation, which earned $9.4 billion in pretax profits in 1999, but paid only 6.3 percent of that in federal taxes. Absent the alternative minimum tax, Ford would have paid almost nothing in taxes.
It is important to note that the alternative minimum tax was passed during the Reagan years, after that administration introduced so many corporate loopholes, especially accelerated depreciation, that many corporations were able to get away without paying any taxes at all. The Tax Reform Act of 1986 closed some corporate tax loopholes and added the alternative minimum tax to make sure that large profitable corporations would be required to pay a reasonable amount of taxes. Of course, what is “reasonable” lies in the eyes of the beholder. How reasonable is it, really, for corporations to pay less than 10 percent of their pretax profits in taxes while their employees pay significantly more? And how greedy is it for corporations to ask that such taxes be eliminated, operating under the veil of a terrorist-induced stimulus package?
In Post-Sept. 11 Climate, Patriotism Is Overriding and Misleading
We now live in a climate where patriotism overrides everything else, and where there has been a rush to hegemonic thinking. Given this, Senate Majority Leader Tom Daschle, D-S.D., has shown courage in standing up to the pressure to pass an economic stimulus package that will stimulate little more than corporate pocketbooks. Daschle has been vilified by Republicans as an “obstructionist” because he won’t let these tax cuts through the Senate.
Instead, he seeks to increase unemployment compensation and provide health insurance for those who have been laid off. For President Bush and Vice President Dick Cheney to describe this as obstructionist is to set themselves in opposition to the majority of the American people.
As this article is being written, many are wondering whether there should be a stimulus package at all. Most economists think things will turn around in nine months or so. Things won’t improve more quickly with a corporate-based stimulus, only a stimulus that favors working people will jump-start the economy, and if the Senate can’t wrest that from the House, we are probably better off with nothing.
Women should not believe the hype that corporate stimulus helps us. After all, we lived through 10 years of economic expansion and barely saw the wage gap between men and women narrow. We haven’t seen the minimum wage increase in five years, though the majority (actually 70 percent) of those who earn the minimum wage are women. Indeed, though there was women-friendly leadership in the White House for the last eight years, the words gender equity were rarely spoken.
Now, the same administration that eliminated the White House Office on Women has sent First Lady Laura Bush out stumping about the rights of women in Afghanistan. Interestingly, Mrs. Bush has not spoken about the rights of women in this country, many of whom live behind the figurative veil of inequality and secondary status.
Women Advised to Resist Stimulus Plan Laden With Corporate Giveaways
From a policy perspective, then, women must fight against a stimulus package that is heavily loaded toward corporate giveaways because it frays the safety net that women rely on and because it increases the tax burden for those at the bottom, who are disproportionately women.
But there’s a personal perspective on this, too. Many women want to know what they can do to make it through these rough times, especially during the consumer-driven holidays, especially when many don’t know whether they’ll get a bonus or a pink slip at the end of the year.
My advice to women is to curtail or stop spending and to take this moment of economic chaos to review personal financial goals. I realize that advice flies in the face of the campaign for “patriotic spending,” but I think that such a campaign is ill-advised when our nation is experiencing an unprecedented number of personal bankruptcies. While our spending may jump-start the economy, it may also push some of us into an economic insecurity that we can ill-afford.
I’m not advocating hoarding, or suggesting that women avoid that year-end giving that is so important to charitable organizations. However, I am suggesting that each of us separate herself from the policy discussion in order to assess her finances in the next year. We’re in a recession and that especially affects those of us who make their living in travel and leisure and in the related service industries.
We keep getting conflicting advice. Be on alert. Live normally. Many women have lived their whole lives on alert, which makes crisis and economic recession normal. Still, we must all look at ways we can make the policy climate personally empowering by supporting progressive legislators, and by understanding how to make the political an opportunity for personal financial growth and development.
Julianne Malveaux is an economist in Washington, D.C., who writes about politics, economics, gender and race.