While the White House and mainstream media have had us focused so intently on the cost of healthcare, over the past year or so, the cost of virtually everything else we’re forced to buy has also grown, exponentially in many cases, far outpacing the cost of medical care.
When are we going to begin to talk honestly about the fact that healthcare costs -- as painful as they may be – are just one symptom of a much larger economic problem in our country – a badly outmoded business model under which jobs, wages and the overall economy are definitely not rising--but prices are?
I think, for me, the very last economic "straw" was hearing last week that Spirit Air, which bills itself as the “first ultra-low cost airline,” has announced that it will now begin to charge up to $45 for each piece of luggage that passengers carry onto their planes and place in an overhead bin. In my opinion, if you really want to understand what’s wrong with the U.S. economy, pay very careful attention to all that Spirit has done to gouge its own customers--not just last week, but throughout the past decade.
Under this most recent scenario, Spirit Air's customers, who were already trying mightily to avoid the previously imposed and deeply resented $15 and $25 "baggage check fees," are going to be penalized for the audacity of taking their personal belongings along on their flights, whether they check them or carry them.
It’s not as if this was Spirit’s first customer infraction. No, these were the same guys who had already been charging $2 for previously complimentary beverages during their flights, including bottled water. They’re the ones who charge “seating fees” -- $7 for a middle seat and $12 for an “aisle” or “window.”
Is it a coincidence, at all, that a published report in June 2008 indicated that Spirit had eliminated its customer service department, or that the company was fined $375,000 last September for flight overbooking, lost customer baggage and deceptive advertising?
I imagine that the executives at Spirit aren’t really “sweating” the fine. They know they'll probably make that up and more in just a few months with the new "carry on luggage" fees. If you doubt that, then you obviously haven't seen the recent disclosure that, as early as 2007, airline “checked bag fees” had generated $464 million for the carriers and that, by the first nine months of 2009, those fees had jumped to nearly $2 billion. With that kind of unchecked revenue on the horizon, how long will it take for virtually every other airline to follow Spirit's lead?
This would already be a very distasteful story, if this kind of behavior was limited only to Spirit Air, or only to the airline industry. The problem is that it just "ain’t" the airlines. At the end of the day, is there really any difference, in this insatiably greed-driven and dangerously unregulated economy, between excessive fees charged by airlines, banks, credit card issuers, cell phone or mortgage companies?
This, of course, is all being permitted to happen while the average household income has stagnated and family savings and net worth have declined. How long can we, as a nation, continue to play that game without risking serious social unrest? And, more importantly, does anyone in government seem to care?
The problem is further complicated by the fact that the federal government seems to have been engaged in economic “newspeak” in recent years, blatantly twisting, and incongruously mixing the meanings of long-standing economic terms, e.g., "jobless" and "recovery," in an apparent attempt to put a “happy face” on the misery people are actually experiencing out in the real world.
What's next, "good is bad," "peace is war?" If we fall for "jobless recovery," we'll most likely accept those old Orwellian re-definitions, too.
On the subject of joblessness, the Bureau of Labor Statistics has just reported that nationwide unemployment as of March 2010 is 9.7 percent, but that African-American unemployment is 16.5 percent, with black women at 12.4 percent, and black males at an astounding 19 percent. Despite those numbers, African Americans are still being sternly warned not to expect any black-specific job creation support, lest we embarrass the president. Seems a poor trade-off: Protecting one man's job at the expense of the well-being of millions of severely impacted black families, but, hey...
How bad is 19 percent black male unemployment? Put it this way: Greece, a country teetering on the brink of total financial collapse, reported an unemployment rate of 9.2 percent in June of last year; Iceland, whose government actually did collapse last year, due to poor management of its own economy, recently reported a 7.7 percent unemployment rate. Pakistan's unemployment rate is 15.2 percent and Iraq's is at 18 percent.
How can U.S. black male unemployment be greater than that in "developing nations" with which the U.S. is currently at war?
A much-massaged report in February that, I imagine, was designed to make us all feel better about the economy, disclosed that the U.S. “core inflation” rate was better than it was 12 months ago, moving from 1.7 percent to 1.6 percent. On the surface that sounds like a good thing until you realize that "core inflation" is arrived at by leaving items such as "food " and "energy" that might, otherwise, fairly and appropriately, increase the inflation rate, out of the calculation. Hey, maybe the government's economists, after they get promoted high enough into the administration, don't have to actually shop at supermarkets or take their own cars to gas stations, anymore, so they don't know. That would explain it, wouldn't it?
By the way, the Consumer Price Index tells us that energy, alone, increased by 17.1 percent over the 12 months ended February, 2010; transportation, which includes the cost of gas, increased 13.8 percent; education increased by 4.5 percent and medical care by 3.3 percent.
Oh, and while we’re on this subject, let's not overlook the continuing extraordinary disparity between the pay scales of company CEOs and their average employee. In 1970, the average U.S. CEO’s compensation package was about 25 times that of the average production worker. By the year 2000, CEO compensation had climbed to an average $2.2 million, about 90 times the average worker’s pay and by 2004, CEO compensation was 500 times that of the average worker.
Is there any wonder why there is growing anxiety and anger among average Americans about the state of the U.S. economy and their role in it?
A recent report on the faltering U.S. economy by the Rockefeller Foundation informs us that, while most Americans are suffering in this "low pay/high cost" environment, the effects on women are especially painful. The report concludes, not unexpectedly, that women, especially women of color, are more worried, in this economy, about paying bills, losing jobs, providing for children and saving for retirement. While 26 percent of white women told the researchers that they have “had trouble paying bills" in this economy, that number grew to 42 percent for Hispanic women and 48 percent for African-American women.
As I mentioned earlier, we can readily understand just how volatile and dangerous the economy has become for Americans--and for black folks, specifically--by watching the business practices in industries such as the airlines.
Recently, for example, Continental Airlines surprisingly seemed to leave just a little something on the table for its customers when it announced that, in one more "cost-cutting" move, the carrier will now only offer food on intercontinental flights and, on certain international flights. Veteran airline-watchers were initially just a bit comforted when Continental added that it would continue to provide food on domestic flights longer than six hours. That concession seemed to be a bit customer-friendly, they thought.
But, just when they wanted to believe that Continental was at least retaining a small, soft spot in its numbers-crunching, corporate heart for cross-country fliers, they learned from United Airlines that a flight from L.A. to Philadelphia lasts just five hours and seven minutes. It appears that air travelers are going to have to fly a bit farther than coast-to-coast, if they want to be served food on a domestic Continental flight.
Sadly, it's becoming clearer every day that we're living in an economy under which the average consumer just can't win--and nobody seems to care.
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