Money’s all spent, can’t pay the rent

The average rent for a small apartment in Sacramento is about $1,400 a month. A person working 40 hours per week at minimum wage makes $2,064 a month, pretax. Clearly, we have a problem. Even if everything goes right, there is hardly enough money left over for food, clothing, utilities, transportation and the numerous other necessities of daily life.

And then when life happens—reduced hours at work, a speeding ticket, a burglary, a vet bill, a medical bill or any other unexpected expense—things can go quickly south, and a hard-working person can find themselves in a desperate situation. And a parent with children trying to get by on minimum wage is in an even bigger mess.

This is not just a Sacramento problem. It is an American problem.

On the recent Sacramento Metro Chamber study mission in Indianapolis, we learned how government agencies and local corporations are raising money to help people who are chronically unemployed despite the booming economy. Last week, I was in Dallas, helping an anti-poverty group develop a publication to explain how local corporations and city government are establishing training programs to help 5,000 residents escape from poverty.

Here in Sacramento, Mayor Darrell Steinberg and others are working to use money from a voter-approved increase in the sales tax for economic development in poorer neighborhoods. All of these measures are important, but without changes in federal policy they will not be enough.

In her thought-provoking book Political Tribes, Amy Chua explains that many rural whites believe that they have been excluded from diversity programs. There is no Ivy League program to benefit rural poor Christian white people. And this is one of the reasons that this “tribe” went for Donald Trump in 2016, according to Chua.

We need to reach out to Trump voters who believe that the current American system is rigged against them. This group should be part of any progressive coalition. Some of this group helped elect Barack Obama.

In the last 20 years, those in the top 1% of net worth have increased their share of our country’s wealth from 30% to 39%. This is not because the wealthy in 2019 are that much smarter or harder working than the wealthy of 1989. It is because the rules of the game were changed by cutting taxes for the rich and letting inflation reduce the minimum wage.

We need a plan that reverses America’s increasing income inequality and moves resources from the very wealthy to the poor and working class. In her presidential campaign, Sen. Elizabeth Warren is proposing a policy that would restore fair rules to the game. Her plan for a 2% wealth tax on the richest 75,000 Americans could bring in as much as $2.75 trillion over a 10-year period. Trillion!

There are some who react in horror. If the Warren plan had been in place since 1982, Amazon founder Jeff Bezos would only be worth $87 billion instead of $160 billion. However, I’m pretty sure Bezos would manage to drag himself to work knowing that he would only earn a fortune of $87 billion.

Warren’s proposal would slowly move us back to an income equality level similar to European countries, and to what we had in America only a few decades ago. We need to build a coalition and a political movement to get us there.