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Palin: Working-Class Hero?

Last updated: July 31, 2020 | October 09, 2008 | Paula M. Graham
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Gov. Sarah Palin (flickr: bbeanan) Gov. Sarah Palin (flickr: bbeanan)

ANCHORAGE, Alaska — On the campaign trail over the past two weeks, Alaska Gov. Sarah Palin has been courting the working-class vote.

“I know what Americans are going through,” she said after the stock markets took another dive last week. “Todd and I, heck, we’re going through that right now even as we speak — which may put me again kind of on the outs of those Washington elite who don’t like the idea of just an everyday, working-class American running for such an office.”

As economic forecasts remain bleak and the foreclosure rate continues to rise, the McCain campaign needs to shore up support among blue-collar workers in such key battleground states as Ohio and Pennsylvania. Palin’s folksy language and personal anecdotes are clearly part of that effort.

Illustration by: Matt Mahurin Illustration by: Matt Mahurin

Palin often calls herself working class and a regular “Joe Six Pack.” But her income, assets and access to health care place her higher up the economic ladder. While she describes herself as a member of the working class, when faced with policy choices on issues important to blue-collar voters, Palin, over the course of her political career, rarely breaks in their favor.

A close examination of Palin’s record on such issues as health care, the minimum wage, taxes and retirement funds shows that she has remained silent on proposals that would channel public money to programs beneficial to working-class Alaskans. In other instances, Palin supported programs that favored wealthy Alaskans over low-income families.

Financially, Palin and her husband, Todd, are far from being members of the working class. In America, where class is usually defined by household income, a middle-class family earns about $49,000 a year. In Alaska, the median income for a family is about $60,000. The Palins made $166,000 last year, putting them in the top 20 percent of U.S. earners, according to the U.S. Census Bureau. When including the $17,000 Palin received in per diem payments as governor, the family is bumped into the 95th percentile. The Palin’s assets total $1.2 million, including a lakefront house valued at about half a million dollars, a snowmobile and a float plane.

Todd, a union worker on the North Slope, and Sarah Palin both have jobs that include comprehensive health benefits for their family. And, unlike most Americans, Todd Palin and the Palin children are entitled to federally funded comprehensive health care because of Todd’s Native Alaskan ancestry. The Dept. of Health and Human Services provides comprehensive coverage through the Indian Health Service for people like Todd Palin and his children, who trace their Yup’ik heritage back to Todd Palin’s maternal grandmother.

Many working-class advocates in Alaska say that Palin’s affinity for the working class has not resulted in increased funding for programs that benefit working families.

Instead, as her supporters say, Palin has established her fiscal conservative bona-fides in resisting spending on social programs — even when the state’s budget surplus is expected to reach between $5 billion and $9 billion next year in a state of about 650,0000 people.

Palin has been specifically criticized for allowing Alaska to remain one of the least generous states in a federally backed health-care program for the children of working-class families; for remaining silent on a proposal to raise the state’s minimum wage; for tacitly supporting the privatization of public employee pensions; and for implementing a regressive tax in her hometown of Wasilla while mayor.

HEALTH CARE

Lack of health care is a hallmark of an hourly, working-class job in America.

Both Sen. John McCain and Sen. Barack Obama have taken up the health-care issue in the presidential campaign. Palin noted during the vice-presidential debate that her family has gone through periods when they were uninsured. She said she understands what it’s like for Americans “to sit around the kitchen table” figuring out how to “pay out-of-pocket for health care.”

While this may resonate with many voters, it’s unlikely that Palin or her family has gone for long without health insurance. Todd Palin has had high-paying union jobs on the North Slope for much of the Palins’ marriage. Now, as governor, Sarah Palin qualifies for state coverage.

Even if they did lack insurance, the family would likely have qualified for a federally funded state-based program, Alaska Area Native Health Service, because of Todd Palin’s Native Alaskan ancestry.

Residents are eligible for the program’s free services if they hold stock in one of four native Alaska corporations, including the Bristol Bay Native Corp. According to public disclosure forms that Sarah Palin filed with the state of Alaska, her husband and their children are BBNC shareholders, meaning they would likely qualify for the health service program.

The McCain-Palin campaign has not replied to repeated inquiries, left over the course of four days, requesting comment about the native health-care program.

As governor, Sarah Palin has not sought to dramatically expand coverage for the children of working-class Alaskans.

By next year, Alaska’s state budget surplus is expected to be between $5 billion and $9 billion because of the high price of oil. Taxes on oil production and oil royalties account for the bulk of the state’s revenue. Alaskans do not pay income tax.

A separate fund of just under $40 billion holds oil royalties that are distributed yearly to all Alaskans, even children. This year payments hit $2,000 per person. The state also dispensed an additional $1,200 per person to help offset the same high energy prices fueling the budget boon.

During this boom time in Juneau, Palin has proved herself to be a staunch fiscal conservative, rather than a populist politician of the working class.

For example, Alaska is one of the nation’s least generous states when it comes to working-class children’s health-care programs, according to a report from the non-partisan health-care research group Kaiser Family Foundation.

Alaska allows children of parents earning up to 175 percent of the poverty level, or about $30,000 a year, to participate in the program. Only two states in the nation, North Dakota and Nebraska, have less generous programs. Another 40 states cover up to at least 200 percent of the poverty level, around $42,000 nationally.

In May 2007, Palin signed a bill that re-instated 1,300 of 2,500 children who had been cut from the state’s version of the federal “SCHIP” program — the State Children’s Health Insurance Program — during tight financial times a few years before.

Under SCHIP, the federal government grants states 70 percent of the cost of providing health-care for the children of the working-class.

Palin’s critics say that during a time of budget surplus the program should be expanded, not just partially reinstated.

“[SCHIP] is a very cheap way of getting health-care for working families,” said Rep. Les Gara, a Democrat from Anchorage who is critical of Palin’s policies affecting the working class. Gara said he thought Alaska should cover children up to 200 percent of the poverty level, as most other states do.

MINIMUM WAGE

One cornerstone of Palin’s campaign on the national stage has been “job creation.”

While mayor of Wasilla from 1996 to 2002, Palin supported growth and job creation as well. Her policies ushered in rapid commercial development — particularly the construction of new big box stores. Today, the biggest employer in Wasilla is Wal-Mart, employing more people than the city.

Palin supports job creation, but she has not supported government’s role in setting wages.

Though the cost of living in Alaska is higher than most other states in the United States, because most basics have to be shipped in, Gov. Palin regularly remained silent on efforts to raise the Alaska state minimum wage from $7.15 an hour to $8 an hour last year. In rural parts of Alaska, like the town of Nome, milk recently topped $7.50 a gallon and gasoline cost $5.36 a gallon. About 5 percent of the Alaska workforce makes minimum wage, some 14,000 people.

Next summer the Alaska state minimum wage will fall below the federal minimum wage if it remains the same. The hourly rate is lower than that of 35 other states – and the lowest minimum wage on the West coast.

RETIREMENT PRIVATIZATION

In an interview with Hugh Hewitt last week, Palin sympathized with Americans whose retirement plans are in the market, noting how she felt the pain too.

“The relatively low number of investments that we have, looking at the hit that we’re taking, probably $20,000 last week in his 401(k) plan that was hit. I’m thinking, geez, the rest of America, they’re facing the exact same thing that we are.” When asked why things are tight for her family, she said, “It’s just the great financial crisis that America is in as our savings accounts also, and a 401(k), they’re being hit.”

Palin didn’t mention that she did not intervene when state lawmakers attempted to reinstate a state pension plan supported by labor unions and public employees, for which Palin qualifies.

In 2005 President George W. Bush wrote to state legislatures across the country urging them to privatize state pension programs. Alaska lawmakers, led by then-Gov. Frank Murkowski, adopted such a plan for all new state employees.

Three years later, there is little public support for the system. A coalition of unions, state employees and public policy analysts has formed to push the legislature to re-adopt the old system.

Though both Republican and Democratic leadership has agreed the privatized system probably does not save the state money, a vote to return to a standard pension plan broke along party lines.

Palin did not weigh in during the debate.

“I think with some leadership,” Gara said. “We’d be able to reverse that Murkowski rule.” Gara pointed out that Palin had an 80 percent approval rating at the time of the vote, and her backing could have been vital.

REGRESSIVE TAXATION

Palin’s signature project as mayor of Wasilla was a sports complex, complete with an indoor hockey rink. The project was meant to be a community focal point, particularly in the long, dark winters here. It’s popularity has taken off recently.

To pay for the rink, Palin took out a $14.7 million bond. She raised local sales tax by half a percent to cover the cost of the project.

The move perhaps paints a slightly different picture from what Palin’s has presented on the national stage.

“As mayor, every year I was in office I did reduce taxes,” Palin said during the vice presidential debate. “I eliminated personal property taxes and eliminated small business inventory taxes and as governor we suspended our state fuel tax.”

At a press conference in Wasilla, the town’s current mayor differentiated the sales tax hike from other types of taxes, noting that it will be eliminated once the bond is repaid.

The tax, though temporary, is still regressive as opposed to progressive. There is no sliding scale adjusted for income level. Federal income taxes, for example, are structured so that those who make more money pay a higher percentage of earnings in taxes. Low-income people, with less disposable money, pay a smaller portion of their overall pay.

“The tax is unfair,” said Bob McIntryre, the director of the non-partisan Citizens for Tax Justice.

McIntyre explained that the tax disproportionately affects low-income families, who generally spend everything they make. “Things that you spend money on that are subject to sales tax goes down dramatically as income rises,” McIntyre said.

In a 2003 report, McIntyre studied Alaska tax policies from 1989 to 2002 and found that regressive tax policies are common in the state. McIntyre found that the poorest Alaskans, those making under $15,000 a year, paid 3.8 percent of their income in Alaska state and local taxes. Middle-income earners paid about 3 percent of their income. Wealthy Alaskans paid roughly 2.8 percent.

With no progressive income tax in place, working-class Alaskans end up paying a higher percent than their wealthy counterparts.

On the campaign trail, in battleground states across the nation. Palin is running as a strong advocate of the working class. This is an essential part of her message. But her record in Alaska, as both a mayor and governor, shows someone who has not been eager to push for pro-working-class policies.

*Update: This story has been corrected to say Gov. Sarah Palin signed a health care bill in 2007, not 2004. *

Paula M. Graham | Paula is a writer and editor who works as a freelancer. She covers subjects such as banking, insurance, and digital marketing in his writing. Paula is a bookworm who also enjoys podcasts and freshly made coffee.

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