Wealth and Inequality
This week’s post is dedicated to the Occupiers, and to all others who thirst for social and economic justice.
On this day a year ago, an assembly of people calling themselves Occupy Wall Street gathered at a park in Manhattan, and a movement was born. No matter what you say about this amorphous, loosely knit group, there’s one thing hard to deny; they changed America’s conversation, bringing an awareness of something many of us already knew — that 99% have been getting screwed with our pants on. We have been the victims of the greatest redistribution of wealth in history, and all of it from the bottom to the top. Now you have the richest 400 Americans owning as much wealth as the bottom half of the country — 150 million people. The Census Bureau shows that the fastest growing segment of the population is the homeless.
How did we get here? From the 1950s through the 70s we had a robust middle class, with jobs that paid at least a living wage. One reason for this was that about 35% of the workforce was unionized, and that brings non-union wages up, too (today it’s about 9%). Then about 1979, as workers’ productivity kept going up, the corresponding rise in wages flatlines, and it’s stayed that way. You can see the chart at the Bureau of Labor Statistics website. Conservatives have hated the New Deal from its inception, and when Reagan became President in 1980, the demolition of the Middle Class began in earnest, beginning with attacking the unions. The virtue of greed was reborn. It wasn’t called the Me Decade for nothing. The balance was tilted even more towards the wealthy and away from the rest of us, in the tax code, in the courts (by attacking tort reform), and in the criminal justice system.
This is what John Edwards called the “two Americas,” during his Presidential campaign in 2004. Clinton did no favors for the middle class either, with NAFTA and other free trade pacts, which lost more jobs. The Bush years accelerated the downswing. From 2000 to 2010 we went from 17 million manufacturing jobs down to 12 million, and over 50 factories were closed. The change promised by Obama has not materialized, either, for a number of reasons.
So here we are, with 50 million without health care, nearly half of Americans at or near the poverty line, and most of the new jobs being created are low-pay, with few benefits. On the other end of the scale, life has never been better. What we’re headed for is neo-feudalism, with a few wealthy elite at the top, and the rest of us as peons. Of the 34 so-called developed nations, we rank towards the bottom in social mobility, median wage and median wealth.
What kind of effect does inequality have on a society? An organization called Equality Trust (equalitytrust.org.uk) has made a decades-long study of developed nations, resulting in some sobering observations. Those nations doing the best economically have some things in common: universal health care, a strong unionized workforce, strong social safety net, and a high upper margin. A strong and vibrant economy is one that benefits the majority of the population. In these countries, CEOs make around 30 to 40 times that of their workers.
Now let’s look at the other end of the scale. See if any of this seems familiar. In societies with the greatest wealth inequality, CEOs make hundreds if not thousands of times what their workers make. You have higher rates of teenage pregnancy, drug & alcohol abuse, domestic violence, divorce, crime, obesity, mental illness, child abuse, and infant mortality. That sounds a lot like America, doesn’t it? These are all symptoms of a deeply dysfunctional society. There really are two Americas. In one, Jean Valjean steals a loaf of bread and is pursued to the ends of the Earth. In the other, bankers and financiers nearly bring the nation’s economy — if not the world’s — to the brink of collapse, without so much as a single indictment, let alone any prison time. The single exception seems to have been Bernie Madoff, but he was stealing from the rich, and I think that’s a taboo of some kind.
In his book The Price of Inequality: How Today’s Divided Society Endangers Our Future, Pulitzer winning economist Joseph Stiglitz writes about how inequality affects every aspect of society, and that more inequality leads to more rules (by those making the rules) which leads to even more inequality. He also slays one of the conservatives’ sacred cows — Adam Smith’s “invisible hand” of the free market — saying the reason it’s invisible is because it was never there. Paul Krugman will tell you the same thing; cutting taxes while cutting spending has never worked.
It comes down to basic philosophy. Conservatives really seem to believe society is more stable if you don’t have a bunch of prosperous middle class folks protesting the war, or burning their bras. They like a top-down, authoritarian plutocracy with the great majority in serfdom, even though they’ve always been on the wrong side of history. They are one election away from locking it all down. There has probably never been a more urgent time to vote, because these people are after nothing less than a permanent feudal state. They’ve taken our jobs, they’ve taken our homes, and now they’re coming after our Social Security, Medicare, and everything else we have. How much more of this Americans will take is difficult to predict, but I offer a word of caution to the 1 %. We have seen movements like Occupy all over the world, in the Arab Spring, in Greece, Italy, Spain, Russia, everywhere. It’s always about inequality, and people are just plain fed up with it.
Historically, violent revolution does not come from the poor, who are far too busy trying to survive. It comes from the middle class, who has been cheated out of its expectations and the promise of a better life. So oligarchs, take note: your heads would roll into those baskets as easily as anyone else’s. I would advise you to start paying your fair share, and learn to settle for millions, rather than billions.
When social change begins, it cannot be reversed. — Cesar Chavez