Do you find that $20 bill in your pocket evaporating faster than ever, and your paychecks taking you shorter and shorter distances? It’s no hallucination. There’s a shift going on. It’s a shift helping ensure the comfortable middle-class lifestyles our parents enjoyed become as obsolete as an eight-track tape player.
Costs once borne by better-heeled folks are increasingly bearing down on the fragile shoulders of American taxpayers. Expenses, burdens, commitments, and responsibilities once assumed by employers are now the obligation of the American wage earner. In short, if you look around, you’ll find things are being shifted. And the more they’re shifted, the more likely you are to be shafted.
You’ll find article after article bearing the same essential story line. Expenses not so long ago shouldered by someone in corporate America are now being subtly and gradually transitioned to the backs of average folks.
There’s the case in Ohio where the payouts to victims resulting from medical malpractice lawsuits may soon be vacuumed from Buckeye taxpayers’ accounts rather than insurers’. There’s the report from Washington State about a state senate initiative to let employers and insurance companies negotiate with injured workers and pay out less than the workers’ claims are worth, with the logical result that injured, disabled individuals will turn to public assistance.
And of course, there are the instances of mega-rich retail empires that gorge on profits while failing to pay living wages or provide affordable health insurance to their workers, ensuring those workers will turn to taxpayer-financed programs like Medicaid to garner the assistance they or their family members will likely require.
Caught in the crossfire
Your ability to raise kids and build college, home, and retirement savings might not be too badly dented by just one of these shifts. But when the shifts are coming from all directions, well, it’s no surprise editorial cartoons are portraying the U.S. middle class as a chalk line on pavement behind police tape.
Amid the growing library of books examining this phenomenon, one of my favorites is David Cay Johnston’s New York Times bestseller Free Lunch.
What’s that, you say? There’s no such thing as a free lunch? That’s right, someone must pick up the tab when, as the book’s subtitle says, “the wealthiest Americans enrich themselves at government expense.” That someone is you.
In the book, Johnston details how tax subsidies continue to be dispensed to the country’s most-moneyed individuals while jobs for average Americans disappear. Who’s reaping those windfalls? Big box retailers, gigantic shopping complexes, professional sports franchises, and politically-connected companies get the money that’s been shifted. All the while, schools and libraries, police departments, parks and playgrounds, and John Q. Public get shafted.
Johnston maintains a consistently indignant stance throughout the book, but rises to near blood-boiling rage — and takes his readers there as well — when describing a particular category of outdoor sporting goods retailer whose nearly city-sized stores are planted just off the exit ramps of many interstate highways.
These retail corporations (Johnston pinpoints two particular names) seek subsidies from local municipalities that include free land, monetary grants, and recapture of sales, property, and other taxes to build and operate stores, arguing their stores will bring traffic into the town once they arrive.
The only problem is that once they arrive, they usually don’t generate the boomtown commercial atmosphere promised. (One store I pass in the extreme corner of northwest Indiana sticks out in the middle of a one-time cornfield, but the area around it is as bleak as a 1930s-era Dust Bowl hamlet.)
Townsfolk have paid the tab for the store, and are helping fund its continued operation through tax givebacks, while the retailer’s corporate owners reap giant profits. How big? Between 2004 and 2006, one retailer earned $223 million, while collecting almost $294 million in subsidies. I don’t know about you, but I call that elevating the role of shifting and shafting to an art form.
Don’t shaft yourself
So, why all this about the shift and the shaft? I’m not asking you to occupy Wall Street or rage against corporate greed. That’s not going to make one iota of difference in how your personal household finances stack up.
But it could be you’re looking for a reason to put your financial house in order. It might be you’re the type who needs a little righteous indignation to spur you to life-changing action. It may be you can make needed personal spending, saving, and investing transformations only by coming to grips with the full extent of the encroachment into the pants pockets of you and your fellow Americans.
If that’s the case, while you’re not likely to be able to avoid being affected by all the shifting, you may be able to survive some of the shafting.