In this Issue:

Demonic Control: Commentary by Rev. Michael Piazza
Minimum-Wage Increase Fails: Rate Has Stayed Same for 9 Years
The rich are the big gainers in America's new prosperity
Rich City Poor City: Middle-class Neighborhoods Are Disappearing
CEOs Earn 262 Times Pay of Average Worker

Demonic Control
by Rev. Michael S. Piazza

On Sunday, June 18, 2006 our guest preacher at Cathedral of Hope was Rev. Peter Johnson. Peter is a true hero of the Civil Rights movement. Although he never achieved the fame of Dr. Martin Luther King, Jr. or Andrew Young, or even Congressman John Lewis, Peter was one of the young people working in the trenches in the early days. He suffered greatly for the progress that we have made in this country, literally paying for it with his own blood. He has been arrested more than 100 times, attacked by dogs in Birmingham, Alabama, beaten 14 times and hospitalized six times, twice in a coma. As my friend Peter described being struck in the face with the butt of a shotgun by a Louisiana State Trooper, I wondered what kind of demon bigotry would cause people to act so irrationally. Ultimately, it is the demon of fear that is at the root of irrational prejudice. We who are lesbian or gay know that reality. That is why we call it homo-phobia.

Since September 11, 2001, our nation has been in the grip of the demon of fear. I label it demonic because it has taken possession of our souls and caused us to behave in ways that can only be labeled as evil. Under the control of fear, we invaded not one, but two sovereign nations. Iraq had absolutely nothing to do with 9/11, had never attacked us, and posed no threat to us. Without provocation, we let our fear delude us into justifying our invasion. While the whole world is glad to be rid of Sadaam Hussein, I suspect the families of the 100,000 dead in Iraq, and of the 2,500 American soldiers who have died, wish we had found a better way.

Nothing better illustrates the demonic control that fear has had over the American soul than our response, or lack of response, to revelations about torture. While the rest of the world is absolutely outraged, most Americans are, at best, mildly embarrassed. The administration has blatantly ignored, covered up, or rationalized revelations, trusting that our fear will negate any strong reactions. They have exploited our fears to justify disregarding and destroying our values. While there have been a few low level punishments for Abu Ghraib, they have completely ignored that the abuses there were a direct result of a shift, at the very top, in core humane values. A decade ago it would have been unthinkable that the Attorney General of the United States could suggest that our country could ignore certain provisions of the Geneva Conventions. The demon of fear has changed all that.

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The following articles are in response to last week’s eNews:
Mind the Gap: The Increasing Economic Divide

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Minimum-Wage Increase Fails
Rate Has Stayed Same for 9 Years
by Shailagh Murray
Originally Published by the Washington Post

The Senate yesterday rejected a Democratic plan to boost the minimum wage for the first time in nearly a decade, but Democrats vowed to campaign on the issue this fall to highlight their differences with the Republican majority.

The measure, offered as an amendment to an unrelated defense bill by Sen. Edward M. Kennedy (D-Mass.), would have raised the minimum wage to $7.25 per hour from the current $5.15, where it has remained for nine years. The 52 to 46 vote was eight short of the 60 required to meet a procedural requirement and pass the measure.

"We have had debates on gay marriage, we have debates on flag burning, and we have debates on estate tax," Kennedy said. "We're saying that it's time we take action to increase the minimum wage."

Democrats noted that the minimum wage has not been adjusted for inflation in nine years, despite soaring gasoline and energy prices and rising housing costs. Workers receiving the current minimum wage earn only $10,700 a year, "almost $6,000 below the poverty line for a family of three," Kennedy said.

Republicans argued that an increase in the minimum wage would discourage employers from hiring workers and would hinder people in the early stages of their careers from gaining skills and advancing. Yet eight Republicans joined 43 Democrats and one independent in supporting the Kennedy measure -- double the GOP support a similar measure garnered last year.

The Senate has rejected 11 attempts to raise the minimum wage since 1998, according to a legislative history compiled by Democrats. House Republican leaders indicated this week that they would not allow a vote on the issue this year.

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The rich are the big gainers in America's new prosperity
from The Economist

Americans do not go in for envy. The gap between rich and poor is bigger than in any other advanced country, but most people are unconcerned. Whereas Europeans fret about the way the economic pie is divided, Americans want to join the rich, not soak them. Eight out of ten, more than anywhere else, believe that though you may start poor, if you work hard, you can make pots of money. It is a central part of the American Dream.

The political consensus, therefore, has sought to pursue economic growth rather than the redistribution of income, in keeping with John Kennedy's adage that “a rising tide lifts all boats.” The tide has been rising fast recently. Thanks to a jump in productivity growth after 1995, America's economy has outpaced other rich countries' for a decade. Its workers now produce over 30% more each hour they work than ten years ago. In the late 1990s everybody shared in this boom. Though incomes were rising fastest at the top, all workers' wages far outpaced inflation.

But after 2000 something changed. The pace of productivity growth has been rising again, but now it seems to be lifting fewer boats. After you adjust for inflation, the wages of the typical American worker—the one at the very middle of the income distribution—have risen less than 1% since 2000. In the previous five years, they rose over 6%. If you take into account the value of employee benefits, such as health care, the contrast is a little less stark. But, whatever the measure, it seems clear that only the most skilled workers have seen their pay packets swell much in the current economic expansion. The fruits of productivity gains have been skewed towards the highest earners, and towards companies, whose profits have reached record levels as a share of GDP.

Even in a country that tolerates inequality, political consequences follow when the rising tide raises too few boats. The impact of stagnant wages has been dulled by rising house prices, but still most Americans are unhappy about the economy. According to the latest Gallup survey, fewer than four out of ten think it is in “excellent” or “good” shape, compared with almost seven out of ten when George Bush took office.

The White House professes to be untroubled. Average after-tax income per person, Mr Bush often points out, has risen by more than 8% on his watch, once inflation is taken into account. He is right, but his claim is misleading, since the median worker—the one in the middle of the income range—has done less well than the average, whose gains are pulled up by the big increases of those at the top.

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Rich City Poor City: Middle-class Neighborhoods Are Disappearing from the Nation's Cities, Leaving Only High- and Low-Income Districts, New Study Says
by Tyche Hendricks
Published by the San Francisco Chronicle

Ron Miguel, a retired florist and native San Franciscan, can remember when a middle-class family could buy a home in the city without breaking the bank. But over the decades, he has watched that change.

"When we moved into Potrero Hill 30 years ago, this was an affordable area ... but today I couldn't afford the homes and condos going up a block from me," said Miguel, 75. "You have a situation where the cost of housing is astronomical. It's very difficult for the middle income to survive."

The gentrification of San Francisco's neighborhoods reflects one facet of a national trend: the decline of middle-income neighborhoods in metropolitan America, according to a report released today by the Brookings Institution, a nonprofit think tank in Washington, D.C.

In other American cities like Baltimore and Philadelphia, what were once middle-class neighborhoods gave way to poverty as middle-income residents departed for the suburbs and beyond, said Alan Berube, a Brookings fellow who oversaw the study. But in San Francisco and across the Bay Area, middle-class neighborhoods are disappearing as the skyrocketing cost of housing forces middle-income families to flee in search of affordability.

"If the only place you're building middle-income housing is in the Central Valley, that's where middle-income growth will go," Berube said.

The study looked at the income levels for families and neighborhoods in the nation's 100 largest metropolitan areas from 1970 to 2000 and found that the decline in the number of middle-income neighborhoods outpaced the fall-off in middle-income families. That's partly a consequence, Berube said, of people "sorting themselves" into richer and poorer neighborhoods with less economic mixing.

"You've got families moving up the economic ladder who want to buy a better house in a better neighborhood, but that middle rung of the ladder isn't there," he said.

The end result could be "families living in the Bayview want to move up, and all that's left is Pacific Heights," Berube said. "Having those neighborhoods in the middle is important for economic and social mobility."

The study defined "middle income" as anywhere from 80 to 120 percent of the median family income for the region, which in the San Francisco metropolitan area was $75,200 in 2000.
Noe Valley is another neighborhood that has changed over the decades. In 1970, the median income in the area was roughly $10,000, just below the citywide median family income of $10,500. In 2000, the median income in the neighborhood had rocketed up to $110,000.

The report can be viewed at www.brookings.edu.

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CEOs Earn 262 Times Pay of Average Worker
by Kamal Taha
Originally Published on by Reuters

Chief executive officers in the United States earned 262 times the pay of an average worker in 2005, the second-highest level in the 40 years for which there is data, a nonprofit think-tank said on Wednesday.

In fact, a CEO earned more in one workday than an average worker earned in 52 weeks, said the Economic Policy Institute in Washington, D.C.

The typical worker's compensation averaged just under $42,000 for the year, while the average CEO brought home almost $11 million, EPI said.

In recent years, compensation has been a hot issue with shareholders who have been bombarded with news stories about chief executives who are given multimillion dollar bonus and pay packages even if shares have declined.

For example, the chief executives of 11 of the largest companies were awarded a total of $865 million in pay in the last two years, even as they presided over a total loss of $640 billion in shareholder value, a recent study from governance firm the Corporate Library, found.

In 1965, U.S. CEOs at major companies earned 24 times a worker's pay. That ratio surged in the 1990s and hit 300 at the end of the recovery in 2000, according to EPI.

CEO pay is defined by the sum of salary, bonus, value of restricted stock at grant and other long-term incentives. Worker pay is hourly wage of production and nonsupervisory works, EPI said.

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