The Economy: Eroding paychecks

Rising prices, weak wages and national economic trends have Americans feeling uneasy. Even in Seattle, with its relatively strong job and housing markets, the squeeze on household budgets is becoming tighter.

A new King County report shows a serious decline in the middle-class share of the population, with more people pushed into the lower-income sectors. The trend, documented over 15 years here, is not an isolated phenomenon. National policies have driven us toward historic highs in relative wealth gaps.

While there were some extremely modest gains for middle- and lower-income Americans during the Clinton years, the longer-term erosion is reflected in the latest federal report on wages and work hours. Summing up the numbers, the nonprofit Economic Policy Institute said, "A combination of slower wage growth and faster inflation has led to falling real hourly and weekly earnings for most workers." As the Seattle P-I reported, inflation has hit harder here than in the country as a whole.

Our exceptional housing costs are part of the equation here, and there are things we might do to address affordability. Likewise, County Executive Ron Sims is right to focus on helping lower-income families. There are ways to ease the impacts of poverty and improve equity. But we must also look at national and state policies, especially on taxation. As long as we have an extremely regressive state reliance on the sales tax and national policies favoring the rich, it will be impossible to reverse the middle-class squeeze.