Who Really Knows How To Address Income Inequality And Save Us From The Grave?

 

Sustainability-Ahead

So how exactly can we address income inequality by simply asking everyone to learn new skills and find a better job, avoiding the reality of the need for a re-distribution of social resources? We can’t.

Analyzing the evolution of class and income inequality under capitalism, Marx and Engels famously asserted, “What the bourgeoisie . . . produces, above all, is its own gravediggers.” They meant that the capitalist class would through relentless exploitation create conditions for its own death by unifying the working class into an engine of historical change, spurring the revolutionary overthrow of capitalism itself. Marx and Engels, of course, delighted in this prospect, envisioning an egalitarian socialist society.

These days, the prospects do not seem quite as gleeful. While the capitalist class, including but not limited to the infamous–and infamously greedy–one percent, might no doubt be engaged in digging their own graves, the rest of us might really need to worry that they will be digging our graves too–at least one can infer as much from a recent Harvard Business School study. The study, entitled “An Economy Doing Half Its Job,” points out that while large and midsize businesses have been performing strongly coming out of the Great Recession, “middle-class and working-class citizens are struggling.” This “divergence,” the study argues, is “unsustainable.” The study underscores corporate America’s self-interest in improving the overall standard of living in the U.S., warning, “Businesses cannot thrive for long while their communities languish.”

While the Harvard minds raise the scary specter of the unsustainability of a society characterized by intensifying income inequality, the solutions the study proposes offer little to re-direct American values or behaviors to privilege sustainability and address the problem’s roots. The study, in its own way, rejects pessimism, thankfully arguing against accepting “the decline of American living standards as the unfortunate but unavoidable consequence of today’s economic reality.” While seeing as futile any policy attempting to “redistribute gains,” Harvard’s optimism rests in a call to “invest and set policies to make Americans so productive that they can command higher wages even in the face of these dynamics [of globalization and technological change].” In short, the study calls for more of the same, accepting the basic framework of class society and simply asking people to increase their value within the capitalist marketplace, rather than entertaining for a second the option of redistributing wealth and re-thinking our basic standards of fairness, equity, and value.

At the risk of sounding arrogant, I wish these Harvard minds had read my recent article “How to Address Issues of Income Inequality? De-Mythologize Upward Mobility,” arguing rather than asking individuals to increase their value, we need to transform how we value the work individuals do and remunerate the vital contributions, especially by those in low-wage jobs, which make our collective lives possible. I pointed out that which seems obvious but which pundits invariably overlook, namely that as a society we need the work that gets done in those “low-wage” jobs to be accomplished for us. It is socially necessary labor, so asking people to raise their standard of living by developing new skills to move “up the ladder” won’t eliminate those “low-wage” jobs or make any less necessary the work that those occupying those jobs do for us. So how exactly can we address income inequality by simply asking everyone to learn new skills and find a better job, avoiding the reality of the need for a re-distribution of social resources? The truth is, we can’t. And the truth is also that as a society we have, in fact, been re-distributing wealth from the bottom and middle to the top for the past several decades with little complaint from the top about redistributive policies. So why are they so frowned upon now? Obviously, this is a rhetorical question.

Even former President Bill Clinton recognizes the need for a change in economic behavior and values suggestive of redistribution. At the recent Clinton Global Initiative, he offered the prediction that corporations will someday care more about their employees and overall social well-being than maximizing profits, suggesting they will do so “because of proof that markets work better that way.” He prophesized this choice: “We’re going to share inequality, misery, and conflict, or we’re going to share prosperity, responsibilities and a sense of community.”

While a hopeful prediction, we can find examples of thriving enterprises that already have these values built into their plans; and they aren’t necessarily doing so “because of proof that markets work better that way” but because they value people and the work they do, promoting a broader social vision. Take Honey Butter Fried Chicken, a small, independently-owned restaurant on the Northwest side of Chicago. Josh Kulp explains that he and his co-chef and co-managing partner Christine Cikowski, along with their business partners and designers Jen Mayer and Chris Jennings, opened the restaurant “in a conscious attempt to provide a space where employees could thrive.” They wanted to be “known and respected not only for offering responsible and delicious food . . . but also for being an amazing place to work.” Kulp stresses that “from the outset, we have emphasized paying a fair wage, offering paid sick time, paid vacation time, and health benefits,” which they have been able to offer through Affordable Care Act. They share all financial information with their employees and hope to offer profit-sharing to their employees in the future.

They do not ask the busboys or dishwashers to increase their value or improve their skills to earn a higher wage. There is a recognition that for the restaurant to be successful, this work is necessary. They don’t try to de-value the work to maximize value. They have in fact re-valued the work by focusing on the vital role the worker fulfills in the enterprise. This is not a re-distribution of wealth but simply a sensible distribution of it. In my one visit to the restaurant, Kulp introduced me to several of his employees, including younger ones whom he was encouraging to attend college. It was clear Kulp viewed his business as part of a larger social project that will lead to the kind of humane world he envisions and from which he will benefit.

While Adam Smith, chiefly a moral philosopher, argued that if each individual pursued his individual interests to the fullest, generating as much revenue as possible, such behavior would in the end serve the public good more than if one acted with serving the public good as a conscious end. “I have never known much good done by those who affected to trade for the public good.”

Well, we can certainly see that Smith’s vision has resulted in a world in which a substantial number of people do not have their basic needs met. The generation of wealth in our particular socio-economic system does not promote the commonweal but leads to gross inequality. The vision of Kulp and his people, one that foregrounds a vision of the Great Society, has perhaps found its time, moving us beyond Smith’s proverbial invisible hand.

I know I wish Kulp had written that Harvard Business School report. Perhaps he will issue a Honey Butter Fried Chicken report. If he does, I hope it has the same authority, as he and his partners are wise.

18 Replies to “Who Really Knows How To Address Income Inequality And Save Us From The Grave?”

  1. If the right were truly the Christians they claim to be, this is what they would suggest to stop income inequality gap:
    1. Increase taxes on the wealthy
    2. Close all loopholes that aide the 1% at the expense of everybody else.
    3. -Penalize all corporations that move their headquarters overseas and outsource American jobs abroad
    4. Increase the federal minimum wage to $15 hour.
    5. Address the income inequity that hurts females, the disabled, and black Americans the most.
    6. Punish the banks and Wall Street when caught cheating/lying to taxpayers.
    7. Make banks pay back every red penny they schemed out of taxpayers.
    8. Eliminate all subsidies to corporations, businesses, organizations, and groups that benefit from the loopholes.
    9. Regulate everything.
    10.Non privatize everything.
    11. Businesses must give their employees a cost of living raise every year.
    12. Give raises twice a year.
    13. Tax churches, if they balk and refuse,find out what property they own and threaten to t…

  2. the problem with the Harvard study is that it doesn’t take into account the changes in what businesses are looking for.

    in this country we have largely abandoned the apprenticeship system, in which companies would offer paid training in a skill the company needed. the trained employee was given greater responsibility and pay as his skills increased.

    instead, what has replaced it is an increasingly expensive form of higher education, in which the student bears all the costs of his or her training. in the end, after accumulating a mountain of debt, the student then tries to find a company which needs his or her skills. guess wrong on your schooling, and you may never earn enough to repay those loans. there is no guarantee of employment upon completion of your education, and you may find your skills obsolete when you graduate.

    the apprenticeship system served this country well for most of its existence. and it still serves other countries, such as those in Europe, well.

  3. 1. Because why? For fairness? Taxes does not equal charity. Cut out parts of the government that waste enormous amounts of money. The wealthy are the job creators in this country, if you tax them enough they will not create new businesses because the cost outweighs the potential profit. Or even worse they will start or move their businesses over seas.

    2. Abolish the IRS – implement the Fairtax – http://fairtax.org/how-fairtax-works/

    3. Reduce taxes on corporations especially small businesses and work hard to make America the most profitable place in the world to create and run a business.

    4. This would effectively cut the workforce by 1/2. Any well run business allocates a certain percentage of expenses to labor. If you double the labor cost, 1/2 of the employees would have to be cut to maintain profits.

  4. 5. How is this to be done exactly? Shouldn’t hard work, and work ethic be enough? Like income inequality in the Obama Whitehouse? http://www.cbsnews.com/news/white-house-pay-gap-between-men-and-women-persists/

    6. Punish anyone especially politicians who are caught cheating/lying to taxpayers, IF found guilty in a court of law.

    7. Punish anyone who schemed money off taxpayers, if found guilty in a court of law.

    8. Eliminate all favoritism to all groups, implement the fairtax.

    9. The more regulations, the more cost. Last thing this economy needs is another regulation. The less government interaction the better. If you want to see the prices go up on something, add some more regulations.

    10. Because we all know the government does a better job of running everything. USPS? Amtrak?

    11. A cost of living increase every year would be nice to at least keep up with inflation. But you cannot legislate pay rates just like you shouldn’t legislate morality.

  5. 12. That would be nice, but see above

    13. Tax churches, NO. Most Churches do more charity and help more people than the government will ever do. Before the great society, church groups where the primary people who helped those in need.

  6. Any and all businesses must pay a living wage, provide insurance including vision and dental and PENSIONS as was done in the past and created a vibrant middle class. The 1% do not need to make one more dime and should be taxed on every single penny they make including paying into Social Security.

  7. “Fairness” has become something of a fetishistic term used rhetorically to justify inequality. Whoever determined it’s fair for CEOs to earn 100s even 1000s of times what workers who produce their wealth earn? This standard of “fairness” is not a global one and, within the U.S., not a historical one. And who determined someone could claim ownership of part of the earth and sell those resources to other earthlings? This to me is a strange standard of fairness.

  8. I’m not sure how letting corporations do whatever they want will in any way relieve income inequality. It is precisely that kind of unregulated license that creates inequality. At the same time, corporations like Walmart can pay substandard wages because the government subsidizes the wage with food stamps and other assistance–which means Walmart is really dependent on government assistance.

  9. “The wealthy are the job creators in this country, if you tax them enough they will not create new businesses because the cost outweighs the potential profit.”

    Yes, yes, the same old rhetoric. YOU CAN’T TAX THE JOB CREATORS(hands to face in holy terror). Bull pucky.

    The “job creators” have been given tax break after tax break with the premise that the less taxes they have to pay the more money they will have to hire more people. Or cut their taxes and they can afford to raise wages and/or provide health care. Where are the jobs? Where is the increase in wages and health care?

    That has been the biggest lie ever told to the American people. And it benefits only 1 group of people…. the 1%ers.

    “The more regulations, the more cost.”

    In other words we can all get cancer from toxic junk in the water/soil. What do you say to the fracking in CA poisoning the aquifers?

    http://politicususa.wpengine.com/2014/10/11/report-confirms-fracking-poisoning-californias-dwindling-aquif

  10. What if leaning new skills doesn’t lead to a better job, or any job at all? That is the reality many people are stuck with in today’s economy. They are serfs to the landowners and the lords can’t see that a “french revolution” is brewing.

  11. I’ve been warning that another revolt is coming. It’s happened often in the past and tragically it’s always been greedy people who created it.

    Granted in France, Russia, and the colonies fought the monarchy, but now it’s the corporatists and the right wingers who are destroying this country, which is like nazi Germany and the Communists in Eastern Germany.

    The gop may not like the comparisons, but it’s there.

  12. You really are out of balance with reality. But the greedy and the ignorant always are. Religion is now on t.v. et nauseum.

    Of course wanting money, and too often going off scripture, making up their own meanings along the way.

    We have evolved along the way to where most Americans were doing better, but when LBJ signed the VRA then the racists starting doing their damage.

    The Dixiecrats contaminating the Republican Party, and the corporatists more and more forcing their way into politics until we have the disasters we have today.

    Indeed tax the corporations and it they continue to move their business out of our country, then charge them heavy import taxes and we the Middle Class Americans will create our own businesses.

    It won’t be easy, but it would set our country to back to when it was great. It isn’t great anymore.

  13. Corporations were taxed for over a century and did just fine. In fact if you did the research you would find the income taxes were much higher for the wealthy many years ago.

    When the GOP tried to lower taxes to ridiculously low levels again putting the pressure on the Middle Class we had the Great Depression:

    http://datadrivenviewpoints.com/2012/12/03/a-99-year-history-of-u-s-income-tax-rates/

    As for you assertion that the wealthy are job creators, true, in China and other third world countries, not here so much. I lost my job which I had many many years to China.

    Wake up, Pat.

  14. “The wealthy are the jobs creators……”…ah yes that old pee on thee refrain that repubs have been pushing for decades, that offers no proof. Yet, Bush and Brownback have shown just how disasterous these policies are in living color.

  15. The wealthy creat no jobs without the peasants ordering the product. The main flaw in the propaganda of the right. The rest gets worse, only 2% of the 1% are job crerators

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