Thursday, September 20, 2012

Why We Need to Address Income Inequality

One of the questions I get often is why I keep dogmatically driving home points when people have already made up their minds. The answer is pretty simple: because you can, and do, change minds when you present an argument in a way people can relate to it, a way that they comprehend. I know because it's happened to me.

Despite many people's protests that I am leftists, I am very strongly pro free enterprise, and have been for many years. The only way to achieve economic growth, really, is to give people incentive to keep reaching higher, to keep moving forward i their careers. So the idea of income equality is a bit disconcerting at times; after all, if a burger flipper made as much as a CEO, it would be easier to stay a burger flipper.

In the 2002 Wisconsin elections, I had the pleasure of meeting a man named Tony Palmeri. He was a University of Wisconisn -- Oshkosh professor, and had a prety good understanding of labor issues. We were addressing the ida of collective bargaining, and he commented that every time collective bargaining came up, opponents would refer to it as socialism. The pproblem is, in a socialist sytem, your wages are set by the government. Conversely, in free enterprise, you have the right to shop goods and services on the open market, and the only thing a worker has to market is his labor.

Thanks to the magic of Facebook, we've all seen a half a billion graphs on income inequality in the us. It would be almost overkill to add more. But the basic truth is, CEOs and top level employees are earning more, and workers are earning less (against inflation). Of course, the laissez faire economist would insist that this is because of the basic supply/demand curve; that because of high unemployment, the supply exceeds the demand in the workforce.

But this is an inadequate answer as llong as we are outsourcing jobs and issuing H1B visas. There is obviously significant demand, and in some areas, the demand still exceeds the supply. But more to the point, many costs have actually risen during this time, while worker's pay has not.

And this brings me to my chief point: addressing income inequality. While it's tempting to say that a CEO should be able to make as much as they wish, in practice, that's just not working. Seven figure salaries are creating a super wealthy class of people who not only will never have to work, but whose heirs for several generations down will never have to work.

While the founding fathers didn't speak to this, it's a fair bet their opposition to titles of nobility stems directlly from the idea that creating a leisure class that's free from the encumbrances of labor because of excessive wealth is pretty distasteful.

Whether the wealthy want to acknowledge it, the working class deliver the value to a product. An IT worker, for instance, is the brand. When they leave employment, all their certs, their skills, their knowledge leave with them. A teacher also brings the same qualities to the table. In fact, in every area of the workforce, a knowledgeable employee brings things to the table that can't be replaced by simply walking to the day labor establishment and pointing to the guy with the yellow shoes.

I have long said that I LOVE capitalism; I just want to be included, not exploited. And a good capitallist recognizes that. They recognize the value of their employees, the value of someone who has the knowledge to keep thei gears of industry turning while they head out to the Hamptons. And they pay accordingly.

We're at a time when a llot of Americans are at their breaking point. And they're where they are because they're fed up of spending their lives in a hamster wheel, moving forever, but never forward. They want aa promise, a hope, a legacy that only the promise of upward mobility can bring. And they want to know that the simple costs of living will not drive them to bankruptcy and leave them intestate. That's a problem that can only be solved by paying executives a bit less and paying the working class a bit more.

Call it wealth redistribution if you want. I call it compassion.

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