Despite the optimism found in the business pages of local newspapers, Oregon’s working families are still struggling to get by. That’s the findings of a new report by the Oregon Center for Public Policy, which details how Oregon’s working class took the biggest hits during the recent recession and have still not regained lost ground.

Over the last three years, Oregon workers saw their annual earnings slide below their 1976 level by $100 — nearly $600 less than the earning peak they enjoyed in 2000. Even median-income households saw their earning power drop by almost $3,000. The exception to this backslide was high-tech workers who, as of last year, were about 12 percent ahead of their 1979 wages.

As expected under capitalism, even greater inequality was to be found when looking at the larger economic picture in Oregon. During the 80s and 90s, the income gap between Oregon’s richest one percent and middle-income families narrowed in only two of the state’s 33 counties. The bust in capital gains in 2001 and 2002 helped narrow that gap some. Compared to 1979, however, real adjusted gross incomes of the richest one percent in 2002 grew by 91 percent. In contrast, the average income of Oregon’s middle fifth families declined by 3.6 percent.

Even more alarming is the growing number of Oregon’s working class who remain stuck in poverty despite having jobs. The working poor rate now stands at about double the percentage rate of the late 1970s. About 64 percent of Oregon’s poor families with children worked at least one quarter of the year, while 27 percent worked full-time, year-round. Contrary to the image put forward by Right-wing pundits, only 8 percent of poor working families are relying solely upon public assistance.

Lower wages aren’t the only cause for the plight of Oregon’s working class or for the delayed recovery. The Oregon Center for Public Policy found that health care and insurance, housing costs, education costs and taxes are having impacts as well.

In 2002-03, about 562,000 Oregonians were without health insurance for at least 12 months. That’s a jump of 105,500 from the 1999-00 period. Oregon workers felt the health insurance squeeze in other ways as the percent of workers expected to pay part of their coverage went from 36 percent in 1993 to 60 percent in 2002. The health care crisis for Oregon’s working class was also reflected in the 70 percent rise in charity care by Oregon hospitals in 2003, a jump preceded by a 39 percent increase in 2002.While Oregon’s working class was receiving less health care, they were also experiencing a similar crisis in housing. In 2001-02, 87 percent of Oregon renters with incomes under $20,000 had unaffordable rental costs. In Multnomah County, 27 percent of renters paid more than half their income to rent in 2002-03.

The traditional working class tool for increasing family wealth — education — is becoming less and less accessible to working people. Fees and tuition at the University of Oregon jumped 48 percent — to $5,670 per school year — in just four years.

Perhaps most menacing to the long-term health of Oregon’s working class and to the state economy is the growing debt problem.

During the recent recession, personal bankruptcy filings happened at a rate four times higher than took place during the early 1980s recession. Bankruptcy filings outpaced new college degrees in 2002.

Oregon’s foreclosure rate on prime mortgages went from extremely low in the 1990s to well above the national rate after the current recession set in. Subprime mortgage loans are also at risk. At the recent recession’s high point, nearly 10 percent of Oregon’s subprime mortgage loans were in foreclosure.

Oregon’s working class has fallen prey to even more predatory lending operations with the economic downturn. The total number of loans made by “payday lenders” has tripled in three years, going from $64 million in 1999 to $175 million in 2002. Payday lenders are now more common than McDonald’s in Oregon.

Another growth area for predatory lending businesses is “tax refund loans.” Low income workers who increasingly rely on tax refunds to pay off debt, or worse, to pay for basic necessities, are handing over millions to lenders offering high-interest loans for people who can’t wait for the IRS to mail their refund. The zip code with the highest share of low income working families with rapid refund loans is in Warm Springs.

While the report does not assign blame or offer solutions, the grim picture presented is a clear indictment of failed policies and strategies. As predicted more than a decade earlier by opponents of NAFTA and other neo-liberal policies, capitalism will create the most horrible poverty and environmental destruction in pursuit of profits. These destructive appetites are no longer confined to outside our borders. As these numbers show, Oregon, along with many other states are on their way to becoming Third World societies.

The question is whether Oregon’s working class and its allies can come together with their counterparts across the nation and across our borders to resist these demands. Collective action at this level is the only chance we have to create a future far different than the one this report hints at.

Dave Mazza is editor of the Alliance.