Washington, D.C.— Kentucky Congressman John Yarmuth, Chairman of the House Budget Committee, gave the following opening statement at today’s hearing examining the real harm of inequality and solutions that can improve the economic status of working families. Remarks as prepared are below:
As a Congress, we have a responsibility to support policies that give all hard-working Americans the opportunity to succeed, no matter where they started out. Unfortunately, policies implemented over the past few decades have helped usher in an era of economic inequality that remains one of our most pressing economic and fiscal challenges. During today’s hearing, we will examine the causes and consequences of inequality and discuss possible solutions to strengthen our families and our federal budget.
Over the past 30 years, the richest 1 percent of Americans saw their wealth grow by nearly 300 percent. At the same time, the poorest 50 percent saw no growth, even as the cost of housing, health care, food, child care, and other basic necessities have gone up and up and up, making it nearly impossible for millions of American families to make ends meet. The share of national income held by the wealthiest Americans has also increased to levels not seen since the 1920s – right before the Great Depression.
In short, our economy has left working families behind. The inequality it has created has impacted every generation: our nation’s seniors are struggling to retire. Recent college graduates and young people are putting off buying their first homes or investing in assets that could increase their wealth. Parents are finding it harder to afford college, job training, and childcare, all of which are key to finding success in a changing world.
Our nation’s economic future depends on the success of working Americans. Plain and simple, if they don’t succeed, our country doesn’t succeed. Economic inequality is suppressing economic growth and eroding our tax base. It’s putting pressure on federal, state, and local budgets, and increasing the likelihood of a financial downturn. In fact, income inequality has cost the United States up to nine percentage points in cumulative economic growth over the past two decades.
But it’s important to understand that the rise in inequality is not just rooted in structural changes, globalization, or other forces beyond our control – it is also a result of decades of policy geared to help the very rich at the expense of everyone else. Beginning in the 1970s, as the United States experienced major technological advancements, our country failed to take the steps needed to ensure shared prosperity. Instead, workers suffered from trickle-down economic policies, financial industry deregulation, and attacks on organized labor. As a result, wage growth slowed, and income and wealth consolidated with the top 1 percent.
Unfortunately, here we are again: rapid advancements in automation and A.I. are set to reshape a broad swath of industries. In fact, a top official at IBM told me earlier this year that in the next three years alone, A.I. will eliminate or significantly change 120 million jobs around the world. 120 million jobs in just three years. We need to make sure that the new industries of the future and the skilled workers they demand will call the United States home, not China or any other country. Instead, we just blew $1.9 trillion on the Republican tax law that overwhelmingly benefited the wealthy and did little to improve our nation’s economy or prepare us for the future. Continued efforts to deregulate the financial industry and roll back consumer protections are endangering working Americans. Legislation aimed at weakening unions is spreading in statehouses across the country, and we are setting a record for the longest period in U.S. history without an increase in the federal minimum wage. What’s worse, the current Administration is advancing policies that would expand work requirements and redefine poverty to make fewer people eligible for assistance, which in turn makes it even harder for them to succeed.
America’s greatest asset has always been our people, more specifically our workforce, and in this rapidly changing world it is also our greatest opportunity. But the federal government must step up.
We must make a national commitment to early childhood education and work to make college more affordable. Raise the minimum wage, expand job-training opportunities, and invest in the programs that help struggling families get ahead. We need to address our aging infrastructure by overhauling our crumbling roads and bridges, updating communications systems, expanding broadband services to rural areas – all while creating the new jobs of the future. And we need responsible tax policies that will ensure companies invest here, in U.S. workers, and in the new industries that will drive innovation for generations.
We must do all of this and more – not only because economic inequality hurts American families and hinders their success, which should be enough, but because it also threatens our ability to compete in a rapidly changing global economy. I look forward to hearing from our witnesses on the importance of creating an economy that works for all Americans and strengthens our fiscal future.
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