VOICES - Did you say that DWP wants to hike their rates AGAIN? How will the elderly survive our dysfunctional decision making and greed? On fixed incomes, should they really have to choose between heart medicine and utilities?
There is currently a high level of dissatisfaction among Americans of all ages over their economic lot in life. Most have little or nothing left over after paying bills at the end of each month. Most Americans believe they're worse off than their parents were. Our economic plight is a perilous one compared to that of previous generations. We are worried about what the future holds, especially as it pertains to our financial security.
Worldwide, the cost of an education has emerged as the newest threat to economic stability. Expensive preschools paved the way. This slippery slope did not exist for our parents. About 40% of all young adults’ ages 18 to 24 were enrolled in either a two- or four-year college in October 2008.
About 37% of 18- to 29-year-olds have been underemployed or out of work during the recession, the highest share among the age group in more than 30 years. More than one in three young workers state that they are currently living at home with their parents. Parents are nearing retirement, but are still supporting their adult children.
Today’s annual income is about $46,000, which is 32% higher than that of 40 years ago and the average American home is worth about $465,000, or 83% higher compared to 1965. So income is not keeping pace with the cost of homes. Most Americans do not own their own homes. They either rent or have a long-term mortgage. Until the mortgage is paid off they can't truly claim ownership.
Even if their home has increased in value from the time of purchase, they won't realize a profit unless they sell it. Some owners take out second mortgages or home equity loans against their homes thereby going deeper into debt. This is an illusion of wealth since the money isn't truly theirs.
Even though interest rates are at historical lows, and foreclosures provide cost saving incentives, only 15 % of consumers can afford to buy a home now. But is it really wise?
With home ownership comes greater financial responsibility paying higher repair costs and higher property tax rates over the last 40 years. In Southeastern US property tax rates have risen in excess of 100% in the last few years alone! Add to that, higher property insurance premiums, higher telephone bills, cable, so on and so forth.
Our parents paid a small fraction for the "privilege" of having a telephone. The greatest portion any given telephone bill is comprised of taxes - local, state, federal taxes, and "universal" taxes! Let’s not forget about the hidden fees and surtaxes which increase without fail. Without taxes the average phone bill would be about $25.00 instead of the actual cost of around $70.00.
The current level of overall taxation compared to 40 years ago would be inconceivable to our parents.
We're talking about federal, state, local taxes, corporate, business, surtaxes, hidden taxes, inheritance, gift, luxury, indirect taxes most of us can't avoid paying it. These taxes can be found in everything from the cost of a gallon of gasoline, to a gallon of milk. The domestic purchasing power of the dollar from 1965-1980 fell dramatically, when government spending was rising faster than the general economic growth. That trend has continued unchecked. In fact, inflation has camouflaged government growth while it expanded control over a larger portion of the economy.
The cost of medical care is mind boggling too. Health insurance, life insurance, and dental insurance, are systematically eating away our disposable income, but without these attempts to protect our assets, we could be teetering on bankruptcy.
Our parents didn't have to contend with the "Winner Take All Society". They worked hard and so did everyone else, and you were paid according to the results of your labor. If you were fired for failing to lead a company into gains you hung your head and worried about finding another job. Our parents couldn’t imagine a time would come when CEO’s would nearly destroy a company and walk away with a golden umbrella worth hundreds of millions. Economists Robert Frank and Philip Cook wrote about this phenomenon. Since the 1980s the top 1% has not only become richer but industries have merged and consolidated on a level that was unseen in our parents' time.
In our parents' day, the government broke down monopolies where they existed and prevented them from controlling consumers. Today, monopolies are actually encouraged by the government. This results in fewer options or choices for service providers. You spend more but get less service. You have shorter shelf life on the products you purchase and substantially worse quality. You have more “fine print” than you do customer appreciation. Under these terms, we are at the mercy of these monopolies for our basic needs. Most ominously, they can push us over the brink, taking the economy with it.
As consumers, we are only one ballot box away from ridding City Hall of its weak-kneed DWP rate increasers. But first you have to abandon much of your preconditioning! You have to stop buying their justifications. You will have to demand a written agreement from new candidates to oppose rate increases. You will have to financially support these candidates as they run for election so they don’t lean so readily on the union boys and form allegiances. You will have to wash your hands of the City Hall bobble heads once and for all. You must not allow them to leap from gilded lily pad to gilded lily pad, exchanging titles but maintaining the status quo. You will have to realize that you’re not better off than your parents and you’re never going to be as long as you allow super corporations to control your politicians through campaign contributions.
The bobble heads must have a realistic assessment of the state of our economy and not the soft porn version we are spoon fed despite spiraling decline.
(Lisa Cerda is an occasional contributor to CityWatch, a community activist, Chair of Tarzana Residents Against Poorly Planned Development, and former Tarzana Neighborhood Council board member.) –cw
Tags: DWP rate increases, income, annual income, previous generations, hidden taxes, foreclosures, student loans
CityWatch
Vol 10 Issue 35
Pub: May 1, 2012