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Growth in gap between rich and poor fastest in New England
25 March 2007Which is another way of saying the middle class shrunk. There are only three ways the middle class shrinks, 1) It leaves, 2) It moves downward to the lower class or 3) It moves up.
We know in Connecticut the middle class left. We have the highest rate of 18 to 34 year olds leaving this bluest of blue states. This article does not answer the questions, did the lower class grow? Did the upper class grow? I have my suspicions why this was left out, isn’t this the next logical question? The report does state the income levels of the poor dropped while the income levels of the rich grew, which is not the same as actual population numbers.
The report does document how the “working poor” and the middle class has left the cities and coastal areas due to the high cost of housing, willing to trade off long commutes for affordable housing. But we can assume they stayed in New England so this re-distribution of workers does not relate to “Growth in gap”.
This growth in gap is a call to action, more services are needed and taxes must be raised in a more “progressive manner” which is code for raising the rates on the wealthy. hmmmm last I checked the “Millionaire Tax” was down to somewhere between 100K$ to 200K$ per year. Sorry I don’t feel like a millionaire, maybe if I was taxed like one I’d feel richer?
The overriding “need” to tax the “rich” more reminds me of that old canard, “Liberialism, that haunting feeling that somewhere, someone is happy”.
Well here is my take on this. We know the New England area has the highest taxes and we know the New England area has the fastest growing gap between the poor and the rich. I think there is a relationship between taxation and the health of the middle class.
High taxation does not effect the poor, they don’t pay taxes. Remember from a previous post that somewhere around 38% don’t pay income tax. And taxation is more easily bore by wealthy individuals since they have more income margin. It is the middle class that has the toughest time with taxes.
We pay them, we can’t afford them and we don’t get the benefits of them.
So we leave or we become downwardly mobile.
Even the most left leaning of us generally agree a healthy middle class is required for a healthy society, where we diverge is on how to create a healthy middle class. To me it is simple, taxation hurts the middle class and the solution is not to raise taxes to pay for more programs to aid the downwardly mobile.
Get government off our backs by reducing the tax burden and we will take care of ourselves very nicely.
Among states, Connecticut, Massachusetts and Vermont all ranked among the top five nationally for increase in income disparity. And New England accounted for six of the top 20 metro areas for growth in income gap: one in New Hampshire (Nashua), one in Massachusetts (New Bedford), and four in Connecticut (Stamford-Norwalk, Bridgeport, Waterbury and Danbury).
The report’s authors attribute New England’s growing income gap to large economic forces. Many manufacturers have moved to less expensive areas and overseas, leaving fewer jobs in New England for people with relatively few skills. Meanwhile, New England has seen rising demand for highly skilled workers in technical fields.
”These shifts were more pronounced in New England because of the region’s highly educated population, strong research and development base, and relatively high cost of business operations, which pushes low-skilled jobs elsewhere,” Gittell said.
This is very telling, “high cost of business operations, which pushes low-skilled jobs elsewhere”. Like the thousands of jobs lost at Pratt, Sikorsky, Colt, Hamilton and the countless smaller firms that left.
This is also, very very wrong. What were all those so-called “low skilled jobs”? Are they talking about all those low skilled machinists??? Also leaving were all those engineering jobs that designed all that work for the “low skilled”. As I have said before it is hard to hire Aerospace workers in Connecticut. I never would have believed it.
What is also just plain wrong headed about this is, the belief that we will continue to attract high education jobs and this is just the natural evolution of our state. Hence Rell’s wish that cell stem and drug jobs will fuel our state’s economy. I doubt it. Taxes do not play favorites and capital flows downhill by the path of least resistance. Just as manufacturing has left so will the “new industries” of tomorrow. Why? Because they can get a better return for their shareholders by locating in lower cost states. It is that simple. No state has a lock on any business. People move, they vote with their feet. Our native citizens have been voting with their feet for quite a while. Our larger drug companies have moved significant segments of their operations out of state, I suspect this will accelerate.
We are seeing the affects of the natural evolution of our economy as it lives in the environment of high taxation. The higher paying jobs can weather the effects of taxation longer than lower paying jobs, so while it may look like we are evolving to a higher level, I think we are surveying the economic landscape and seeing only the surving population of the wealthy and mistaking it for evolution and not for what it is, a culled population.
As goes the middle class so will the upper class.
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