Thursday, November 03, 2011

A Commonwealth?

The official name of the state is the "Commonwealth of Massachusetts".

Carol Meyrowitz started at Fram­ing­ham-based TJX Corp. in 1983. Today, nearly 30 years later, she runs a $22 billion retailing giant. Her total compensation package of salary, cash incentives, stock awards, and retirement benefits was $8.5 million in fiscal 2009. It doubled to $17 million in 2010 and rose another 35 percent to $23 million in fiscal 2011, making her the highest-paid CEO at a publicly traded corporation in Massa­chusetts.

Altagracia Ortiz started at TJX eight years ago at a warehouse distribution center owned by a TJX chain called A.J. Wright. Ortiz's initial salary was $6 an hour and by her eighth year she was making $10.55 an hour. That’s about $22,000 on an annual basis, or one third of what Mey­rowitz’s compensation package nets her in a single day.

Meyrowitz decided to close the A.J. Wright chain to better focus the company’s resources on its faster-growing retail out­lets—TJ Maxx, Marshalls, and Home Goods. The TJX board would later cite this “important decision” as one reason for giving Meyrowitz a $6 million raise. The shutdown forced the layoff of 4,400 A.J. Wright employees, including Ortiz. “They destroyed everybody’s life at A.J. Wright,” Ortiz explained.

Inequality is pronounced in Massachusetts. Its top 25 CEOs made a combined $332 million in 2010. The wealthiest 1 percent in 2008 accounted for 22 percent of the state’s income. when just 35,000 tax filers reported a combined income of $53.7 billion. The wealthiest 10 percent of filers (349,000 in all) reported a combined income of $119 billion, which is just a shade less than the $122 billion reported by the other 90 percent. In Greater Boston, the inflation-adjusted median in­come of the wealthiest 20 percent of families grew 55 percent between 1979 and 2008, rising from $150,000 to $233,000. But over that same time period the corresponding figure for the 20 percent of families at the bottom of the income spectrum fell, dropping from $23,026 to $22,988 (and in the Berkshires a 29 percent drop and the Pioneer Valley a 24 percent drop.)

In Massachu­setts according to research by the Center for Labor Market Studies at Northeastern University, the total number of workers 65 and older increased by 64,000, or 63 percent, between 2000 and 2010. “It’s a reflection of this lengthy recession, the severity of this recession,” says Barbara Anthony, the state’s undersecretary for consumer affairs and business regulations, whose office oversees the Division of Elder Affairs. “A lot of people did all the right things—they worked hard, they saved money. But a lot of people had things happen that they couldn’t control. The enormous expense the retiring generation is now facing is something the generation before did not face. Even if you’ve done everything right, you may end up today at 65 or 67 and not be able to retire.”

Nearly 50,000 Massachu­setts families have lost their homes to foreclosure, and sliding home values have left hundreds of thousands of more in homes worth less than the mortgages on them. The US Department of Housing and Urban Develop­ment characterizes households as being burdened, meaning they are more likely to struggle to pay everyday bills, when they devote more than 30 percent of their income to paying for housing. By 2005, nearly 30 percent of middle-income Massa­chusetts homeowners were house-poor ( and 48 percent of Massachusetts renters are spending an excessive amount of their household income on rent). The share of Massachusetts families who make less than $75,000 per year while devoting an excessive amount of their household income to housing has risen, from 53 percent in 2005, to 59 percent in 2010. In 2010, 46 percent of homeowners making between $50,000 and $75,000 spent an unaffordable share of their incomes on their homes.
“Low-income workers have seen their wages fall, and their cost of housing went up, while the wealthy had their income fall less, and their cost of housing go down,”
Barry Blue­stone, an economist at Northeastern University’s Dukakis Center for Urban and Regional Policy,says.The gap between the rich and poor grew because of wages, but it’s been exacerbated because of trends in housing. Housing is leading to even greater inequality.”

No comments: