OP-ED | Malloy’s New Economic Reality: Money for the Rich, Layoffs for the Middle Class
As Gov. Dannel P. Malloy continues to carry out his austerity budget, rife with mass layoffs of state workers and deep cuts to vital services, it’s helpful to remember that sacrifice and suffering are not shared concepts.
Consider these gold-plated nuggets that your local pundits and politicians conveniently forget to mention when seeking to enrage you over state employees earning $50,000 a year and having decent health care and retirement security for their golden years:
In 2014, the average CEO of a Standard & Poors Company in Connecticut earned 341 times more than the average worker last year. Topping the list was none other than General Electric’s Jeffrey Immelt, who hauled in a cool $37 million while hatching his plan to soak Massachusetts taxpayers in GE’s relocation to Boston.
In 2015, Aetna’s Board of Directors lavished CEO Mark Bertolini with $27.9 million in compensation — nearly double the $15 million he got in 2014.
Immelt and Bertolini are positively paupers compared to Ray Dalio, who raked in $500 million as the founder and chief investment officer of Bridgewater Associates, a hedge fund firm based in Westport.
I don’t begrudge these people their salaries so much as I do the fact that their hefty paydays are not fairly taxed in this, the country’s wealthiest state. Indeed, Connecticut CEOs and hedge fund managers — all of the economic elite — are getting a great deal by living here.
According to the Institute on Taxation and Economic Policy’s data for 2015, Connecticut residents who earned between $46,000 and $76,000 paid double the tax rate (10.7 percent) than those who earned $1.3 million or more (5.3 percent). It may be a dirty little secret, but it’s nevertheless the reality of our state; rich folks and our largest corporations are benefiting from the inequitable revenue policies spawned by a government enthralled with the wealthy and powerful.
You would hope that Gov. Malloy would choose to do the right thing to heal Connecticut’s significant budgetary wounds. That he would lead the charge to restore taxes on millionaires and billionaires rather than lay off state employees, cut their pay and benefits (which is nothing more than a back-door increase on the middle class), slash vital public services and shift more of the burden onto cash-strapped municipalities.
Instead he has chosen a harmful path by advocating for a budget premised on what he constantly describes as “a new economic reality.” Give credit to the Malloy spin doctors for reducing Connecticut’s economic problems to a phrase that that could only be hatched in a corporate board room or an anti-government stink tank funded by the Koch Brothers. It sounds great, but it’s nothing more than a velvet glove wrapped around the iron fist of government austerity.
Malloy’s vision of austerity is playing out in Connecticut’s public agencies, where state employees, who have already sacrificed $1.6 billion and counting in economic concessions (including permanently lower salaries and pensions), are being laid off and perp-walked out of their facilities, with no chance to say goodbye to their co-workers and clients, or even to effect a transition that ensures a continuation of their services.
One of those workers, Nikki Montone, was employed as a youth service officer at Connecticut Juvenile Training School until April 11. She bravely talked about the political disconnect that led to more than 100 layoffs at the Connecticut Juvenile Training School in Middletown, including hers. She asked a simple question: How does it help to lay her off? What did the governor accomplish? Troubled youth at CJTS lost a dedicated worker and role model. And the state economy lost a middle class wage earner and taxpayer who must now collect unemployment.
Using a budget crisis to batter middle class workers while protecting big corporations and the ultra-wealthy is a politically convenient but tired act that’s been played out to disastrous effect. What happens now if the governor’s vision of austerity continues to prevail? What are the folks Malloy’s laying off going to do if their car needs to be fixed or their kids need a trip to the emergency room?
Is this the Connecticut we want?
You see, we can have an economy that benefits hedge fund traders and corporate CEOs, or we can have an economy that benefits everyday working people and protects the services they provide our communities. But we can’t have both.
Sal Luciano is Executive Director of Council 4, a union representing 32,000 workers. Council 4 can be reached on Facebook and through its Campaign4MiddleClass on Twitter @C4MC. Sign up for email updates from Council 4 here.
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