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Republican economic management since 2001 has not yielded many benefits for middle-income America. Adjusting for inflation, the incomes of college graduates actually dropped by 5 percent between 2000 and 2004 — and 44 percent of the people of Prince William are college graduates. Prince William is also ground zero for the middle-class revolt against the Bush administration’s easy immigration policies. An estimated 10 million migrants have entered the United States since 2000, at least half of them illegally, and few places in the United States have reacted more angrily than Prince William County. Last year, the Prince William Board of Supervisors voted unanimously to require the local police to check the immigration status of all arrested persons.
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Times Topics: Income Inequality
It’s widely understood that abundant low-skilled immigration hurts lower America by reducing wages. As the National Research Council noted in its comprehensive 1997 report: “If the wage of domestic unskilled workers did not fall, no domestic worker (unskilled or skilled) would gain or lose, and there would be no net domestic gain from immigration.” In other words, immigration is good for America as a whole only because — and only to the extent that — it is bad for the poorest Americans. Conversely, low-skilled immigration enriches upper America, lowering the price of personal services like landscaping and restaurant meals. And by holding down wages, immigration makes the business investments of upper America more profitable.
Middle-class Americans surely share in the cost-lowering benefits of immigration. But the middle class also pays the higher local tax bills that can result from immigration. Immigrants do not qualify for many federal benefits, but they do use the roads, schools, hospitals and prisons supported by state and local property taxes — the taxes that fall most disproportionately on the middle class.
It is also clear that immigration thickens the ranks of the American poor. The poverty rate for post-1970 immigrants and their native-born children is almost 50 percent higher than for the native born. (In 1970, established immigrants were much less likely to be poor than the native born.) No mystery why this should be so: one-third of adult new immigrants have not finished high school. And there is reason to fear that this poverty will become entrenched: barely half of Latino students complete high school on time; 48 percent of births to Latino women occur outside marriage.
IN SHORT, the trend to inequality is real, it is large and it is transforming American society and the American electoral map. Yet the conservative response to this trend verges somewhere between the obsolete and the irrelevant.
Conservatives need to stop denying reality. The stagnation of the incomes of middle-class Americans is a fact. And only by acknowledging facts can we respond effectively to the genuine difficulties of voters in the middle. We keep offering them cuts in their federal personal income taxes — even though two-thirds of Americans pay more in payroll taxes than in income taxes, and even though a majority of Americans now describe their federal income tax burden as reasonable.
What the middle class needs most is not lower income taxes but a slowdown in the soaring inflation of health-care costs. If health-insurance costs had risen 50 percent rather than 100 percent over the Bush years, middle-income voters would have enjoyed a pay raise instead of enduring wage stagnation. John McCain’s health plan, which emphasizes tax changes to encourage employees to buy their own insurance rather than rely on employers, is a start — but only the very beginning of a start. Some Republicans have brought great energy to this problem. In the Senate, Robert Bennett of Utah has written a bill with the Oregon Democrat Ron Wyden that would require employers to “cash out” employer-provided health care — and then midwife a national insurance marketplace in which employees would join plans that offered more price control and price transparency. Mitt Romney in Massachusetts put an end to the tax disadvantage that hammers consumers who buy health care directly rather than through their employers. Rudy Giuliani proposed a federal law to enable low-cost insurers in states like Kentucky to sell their products across state lines in high-cost states like New Jersey. But it remains unfortunately true that the Republican Party as a whole regards health care as “not our issue” — and certainly less exciting than another round of tax reductions.
Unlike liberals, conservatives are not bothered by the accumulation of wealth as such. We should be more troubled that the poor remain so poor. With all due respect to the needs of employers, Republicans need to recognize that the large-scale import of unskilled labor is part of the problem.
Meanwhile, the argument over same-sex marriage has become worse than a distraction from the challenge of developing policies to ensure that as many children as possible grow up with both a father and a mother in the home. Over the past 30 years, governments have effectively worked to change attitudes about smoking, seat-belt use and teenage pregnancy. Changing attitudes about unmarried childbirth may prove more difficult. Yet it is a fact that the only way to escape poverty is to work consistently — and that even after welfare reform, low-skilled single parents work less consistently than the main breadwinner in a low-skilled dual-parent household.
