Issues

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

 

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.

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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.

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