America may be reaching its limit on economic inequality


Seattle Times
By: Jerry Large
December 1, 2013

The passage of a $15 minimum wage in SeaTac and the election of socialist candidate Kshama Sawant to the Seattle City Council may be part of a larger change, one that isn't about ideology or political labels, but basic fairness and practicality.

Americans will tolerate a great deal of economic inequality, but we may be reaching the limit, and we aren't alone. Growing inequality afflicts many prosperous countries, and it's beginning to dawn on a range of people that it's neither sustainable nor morally supportable.

Last week, Pope Francis issued a paper in which he warned that the "idolatry of money " would lead to a new tyranny.

He wrote, "Some people continue to defend trickle-down theories which assume that economic growth, encouraged by a free market, will inevitably succeed in bringing about greater justice and inclusiveness in the world."

But those theories, the pope said, have never been supported by the facts.

Here in the United States, where "trickle-down" has its most fervent supporters, we've seen a steady decline in the fortunes of the middle class and the poor while the wealthiest Americans grow richer by the minute. And we know excessive inequality has not played out well in the past -- remember the Great Depression?

Here's where I start preaching socialism, right? Wrong. We already have socialism; just look at how quickly the state found tax breaks when Boeing threatened to move away. We have farm subsidies for billionaires, while the government considers cutting food-aid benefits for the poorest Americans.

The free market isn't free. Small businesses may have to struggle, but at the high end there are all kinds of public help. The free market costs all of us something.

Wal-Mart and lots of other businesses can pay their workers less than they need to live and let taxpayers make up the difference with various forms of aid.

Increasing the minimum wage is good for taxpayers. Let a politically active Republican businessman tell you that. I'm talking about Ron Unz, publisher of "The American Conservative," and now the leading force behind an effort to raise the California minimum wage to $12 an hour.

Unz said in a New York Times interview last week that because there are so many very low-wage workers relying on social-welfare programs, increasing their income "would save something on the order of tens of billions of dollars. Doesn't it make more sense for employers to pay their workers than the government?"

Some employers already take it upon themselves to pay fairer wages. Dick's Drive-In pays more than the fast-food standard, and its leadership is also clear that it expects workers to stay only a while and to pursue better jobs. It even helps with education. The company is about smart business practices, as its success shows, but it cares about its soul, too.

Costco is another company that does well and does good, too. But Dicks and Costco get attention because they are exceptions to the rule. For most of our history, a lot of Americans thought labor should be free -- we had 250 years of slavery -- which I suspect contributes to a lingering lack of respect for labor.

Consider the way Boeing, which always has paid well, handled the contract with its Machinists. The company sent them a revised contract with a short deadline to approve it and an ultimatum -- that it would move elsewhere if the workers refused. It did this even though nowhere else has workers with the necessary skills or the necessary infrastructure.

Of late, Boeing has seemed drawn to states mostly in the South, where anti-union policies are strongest.

Well, the Machinists said no anyway, and in SeaTac the voters said yes to a living wage, and in Seattle voters said how about something different for a change. Around the country, low-wage workers are protesting and some state and national politicians are responding. The outcry is less about some specific wage level than it is about an increasing lack of respect in high places for working people and for democratic values.

None of this pushback is a revolution. It's just people being tired and worried about being trampled on the way to where we are headed now. There may be cause for a revolution, but I suspect a little more fairness is all most people really want.

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This page contains a single entry by CFED published on December 4, 2013 4:42 PM.

America's entrepreneurial spirit is in jeopardy was the previous entry in this blog.

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