How Much Would You Pay for the Good Society? Where the Income Inequality Debate Can Take Us

 

good society

 

If we were able to ask the average American if s/he would be willing to pay $12.50 annually so that thousands upon thousands of people who work for a living might stand a chance of meeting their basic needs, I wonder how s/he would respond? A fully-fledged national conversation on income inequality might yield an answer.

In my last article, “How to Create Policies to Address Income Inequality?: De-Mythologize Upward Mobility,” I argued that the entrenched and very powerful narrative of individual upward mobility in U.S. culture, which often on some level informs our political thought, poses a major obstacle to creating effective policies to address income inequality as it legitimates income inequality rather than systemically confronting it. An individual might escape a low-wage  job and move up the income ladder, but that doesn’t eliminate the low-wage job or the work we need done as a society. I suggested that to address income inequality, we actually need to do something more direct—like actually address income inequality by, for example (among many possible actions), raising the minimum wage.

My brother read the article and asked me a question that I think is more generally at play in the debate: “Won’t the costs of increasing the minimum wage simply be passed on to consumers?” My first, rather knee-jerk, response to such a question is always why can’t these costs come out of salaries at the top of these companies or come out of corporate profits? I did, in that article, refer not just to raising the minimum wage but also to equalizing wages, which—if you didn’t get it—means salaries at the top might have to be adjusted lower (go ahead and call me a communist), as any solution to income inequality, almost by definition, will need to involve redistribution of existing wealth. Corporations for decades have maximized profits by lowering wages and decreasing benefits. Can’t we ask that corporations show a minimal responsibility not just to their workers but to the society of which they are a part? Such behavior is actually in the self-interest of these corporations—even Harvard says so.

But then I moved past my knee-jerk thinking and considered the question, and it became pretty interesting to me. So what if the costs of raising the minimum wage were passed on to consumers? When that question is posed, it is usually done so rhetorically, with the assumed answer that—God forbid!–it would be horribly unacceptable to raise prices for consumers, and thus we cannot raise the minimum wage—end of conversation. But what would it mean to pass the cost of a minimum wage hike on to consumers (who, let’s not forget, are typically workers, too, a fact often lost or neglected in such conversations)? I started to think about this question as something more than rhetorical, and my thinking led me to reflect also on how this debate on income inequality provides an important opportunity for us to really re-assess American values and, in ways we haven’t done, consciously craft—and pay for—the kind of world we want.

If corporations (who, after all, are apparently people) are unwilling in the name of the Good Society (a concept I refuse to believe is obsolete) to make sure their workers have the wages and benefits necessary to meet their basic needs, are the rest of us worker-consumers willing to fund it? It’s not at all clear that the citizen-consumer of today wants the lowest-priced goods and services regardless of social and human consequences. In fact, the opposite seems to be true. CNBC editor Heesun Wee reports, for example, that, “Particularly for younger consumers, including millennials, purchasing decisions are about more than cheap prices. Shoppers are buying based on a company’s values, which can include domestic manufacturing, environmentalism and ethically sourced raw materials, ranging from cocoa to cotton fibers.” These millennials, and no doubt others across generations, appear to be thinking very consciously about the type of world they want, buying organic goods and recycled products to protect the environment, free-range chickens to ensure humane treatment of the earth’s creatures, fair-trade coffee, and the like.

It may very well be that this evolving socially conscious consumer will pay for goods and services produced and provided by unexploited labor, or by more justly paid labor. What would the cost be for this Better, if not Good, Society? Well, a 2011 study regarding wages at Walmart offers some insight into this issue, finding that to raise every worker at Walmart to at least a $12 per hour wage would cost the average Walmart customer 46 cents per trip or about $12.50 annually.

This doesn’t seem like much to pay so many can receive a more livable wage (we might have to pay more for a true living wage), but maybe I’m wrong. The main point I want to make, though, is that I’m not sure we’ve ever posed the question to the average American in a way that would enable us as a collective culture to make a conscious choice in the matter. Our culture and economy function on the assumption that consumers want the lowest price, but has anybody ever asked the consumer if they want the lowest price regardless of social and human consequences? If we were able to ask the average American if s/he would be willing to pay $12.50 annually so that thousands upon thousands of people who work for a living might stand a chance of meeting their basic needs, I wonder how s/he would respond? A fully-fledged national conversation on income inequality might yield an answer.

And we can make the question more telling by elaborating more fully the economic ramifications of this choice. For example, while I am not a political economist by trade, let me risk the observation that it stands to reason that if more Americans made a living wage, state and federal governments would not only bring in more tax revenues, they would also need to spend substantially less in assistance programs from food stamps to housing and healthcare subsidies. In such a scenario, our governments might legitimately be able to afford to cut taxes, improving people’s economic lives even further and returning more than that $12.50 required to raise the minimum wage. Ironically, if corporations and the wealthiest Americans want tax cuts, perhaps the surest way to achieve those cuts is by raising the minimum wage and moving toward greater income equality.

While I don’t mean to absolve corporations of their social responsibilties (more about this in a future article), I do want us to think about options for empowering ourselves to create the world we want even if we can’t get the cooperation of the Koch brothers and their ilk. The argument that we need to exploit labor so that we have affordable goods and services is both sad—not to mention pretty evil—as well as finally uncompelling, I hope you’ll see. We can move toward the Great Society for pennies a week. It’s hard to imagine a better bargain.

If you’re ready to read more from the unbossed and unbought Politicus team, sign up for our newsletter here!

15 Replies to “How Much Would You Pay for the Good Society? Where the Income Inequality Debate Can Take Us”

  1. Americans surviving on poverty wages isn’t as simple as corporate honchos not wanting to pay their employees, it’s a symptom of the larger issue of offshored jobs, which has caused competition for jobs that drives down wages, rather than the reverse (which used to be the case) with businesses offering higher wages/benefits competing for the most talented workers. The corruption of our government, which is directly related to politicians need of eternal fundraising, has led to legislation supporting the offshoring of jobs and wealth undermining the middle class, and nothing will change until We The People DEMAND public financing for all elected offices.

  2. I’d pay more in a heartbeat if it meant others would earn a better wage and be better able to care for themselves and their families.

  3. Libretti’s decency as a person HAS in fact always stood in the way of his advancement in this hard world of ours. Clearly he has no worries about the next. What struck me in his article was the under-estimation of corporate greed. If I’m brother Koch, and I discover anyone willing to pay more than they are now for anything–much less the crap I’m forcing my employees to turn out–hell, I root out the weakness (generosity? fairness?) skim the attempted donation, and put it in my pocket.

    As Libretti’s quoted studies tell us, this is not a long-term solution and in fact hurts the economy in the end–even might prevent a “legitimate” tax cut someday. But when was longer term thinking EVER part of the filthy, self-interested, greedy-ass mindset of the folks who already have all the marbles in this country?

  4. I along with most everyone else in America would have no problem helping the poor etc. if we all knew the money would actually go where it was intended. Our oversized government would take most of that money and use it for pork barrel spending, or some other frivolous ideal. Also there would be no checks and balances on who received the money or how much they received. How do I know this? Just take a look at our oversized governments spending as it is.

  5. Oversized? its only oversized becuase you have been told it needs to be smaller. They didnt tell you why. No spending on social issues(medicare etc etc) so they can spend more on war. Our government is not oversized. It grows with the number of people we have. But the koch and others like McInsane want money to spend killing in the middle east

    Drop the propaganda, our people come first. You are acting like a trained monkey

  6. I’d give the shirt off of my back to help my fellow man. If it meant giving him a living wage, then I would. I would love to see a country where everyone is happy.

    To me, the men and women who work every day deserve a lot more then the paltry wages they’re getting now.

  7. Government has shrank more under president Obama than any modern president. The Great Republican Recession caused massive job losses throughout government agencies from federal to state level. Many economist argued the massive government layoffs caused demand to be suppressed causing more job losses in the private sector as a cause and affect. Check the BLS job reports over the Great Recession to see how many government jobs were wiped out.

  8. As the author of the article, let me be clear that I am talking about more than human decency. I am talking about enlightened self-interest. My point is that it would take very little to redistribute actually existing wealth not only to improve the lives of those on the low end of the wage scale but to make a better society for all of us. As for my friend Tim Scherman’s comment, I am well aware of corporate greed, which is why I wrote this article thinking about what it would cost the consumer to pay for a minimum wage hike. If you click on the highlighted area (even Harvard thinks so)you will see I am trying to indicate that it serves the interests of corporate america to address what the Harvard study linked there calls the “unsustainable” wealth gap.

  9. PUBLIC OPINION IN REAL AMERICA, FJM STYLE
    Most of my friends live in cities. Real cities. Places where people read books and have hopes and dreams. Little bubbles that seal out most of the things urbanites know to be true about Real America, things from which they want to hide. I am intensely jealous of all of these people, because it has been my experience that most of the things people assume about the Bush Voter parts of America are true. I live among people who wear American flag hats and “These Colors Don’t Run” t-shirts ironically. In 2014.
    Read More
    http://www.ginandtacos.com/2014/09/15/public-opinion-in-real-america-fjm-style/

  10. And also let me say to those above who are indicating they don’t want to give taxes to the government because they are afraid the government will waste it. I am talking about the benefits of raising the minimum wage and how little it would really impact consumers. The beauty of the minimum wage is that it functions like a tax on businesses but the monies go directly to the workers/consumers who need the help most, and it most likely gets pumped directly back into the economy, while also providing more tax revenues for state and federal governments.

  11. “As the economy slowly recovers, it’s become increasingly clear that it’s not just unemployed Americans who need help from the government. It’s those that are employed as well.

    “That’s the main finding of a new report from the Economic Policy Institute on wage theft. What is wage theft? It’s when employers refuse to pay their workers their rightful wages and benefits, such as refusing to pay overtime. It’s a major problem across the United States. One study, which EPI cites, examined three cities (New York, Chicago and Los Angeles) and found that two-thirds of workers in low-wage industries had experienced a pay-related offense in any given week in 2008. Those violations cost workers more than $2,600 a year on average—nearly 15 percent of their total earnings. If wage theft is as prevalent in the rest of the United States as it is in New York, Chicago and Los Angeles, then it costs workers more than $50 billion a year.” *
    http://www.juancole.com/2014/09/employers-worker-other.html

  12. ABOUT THE OFF SHORE JOBS:
    I called my bank for a question to their “advisors section” and my call went to India, to a person I could hardly understand about my issues.

    I then requested to speak to someone in this country, since there are so many unemployed here, surely could answer the phone and do the same job. But then, the workers in India make considerably less money then they would have to pay here.

    I have continue to lobby with this bank about this issue, but my puny account will not matter much if I remove it from their vault,
    BUT… if we had more people doing that, it could help bring a few jobs back home.

  13. The value of this article is that it convincingly knocks down the arguments by low-wage perpetrators (be they the Koch brothers, Heritage Foundation or Bruce Rauner)who argue that raising the minimum wage to a livable wage would be a burden to the public as costs would rise. And who the hell wants to pay more anyway? However, taking away the fear factor and putting a monetary amount for the average consumer appeals to our better angels ($12.50 a year…yeah I’d pay that). In so doing, the author lays the basis for more people to align themselves with the growing movements to raise wages – be it minimum or in low wage industries such as fast food or retail/Walmart – and expanding the movement is necessary in order to win.

Leave a Reply

Your email address will not be published.