It’s the Stupid Economy: Why Income Inequality Ought To Be This Election’s Hot Topic

The health of an economy should correlate directly to the health of the people living within it, not to their economic impoverishment.

Bernie Sanders’ socialist presence in the presidential primary mix as well as populist sentiment brewing on both sides of the political aisle promise, hopefully, to keep the much-needed conversation on income inequality front and center in our national debates.


Unfortunately, the discussions of income inequality too often get subsumed into questions about the health of the U.S. economy overall—as politicians preach to Bill Clinton’s same old song, “It’s the economy, stupid.” We need, though, to recognize that these are not the same discussions at all. In fact, many proposals to prop up—or restore the health of–our current economic system are actually at odds with improving the standard of living for workers in America. For example, while “Right-to Work” laws might to some extent be effective in creating business-friendly environments attractive to corporations, in states with such legislation workers tend to receive less in both wages and benefits. Nonetheless, despite this data, Governor Bruce Rauner of Illinois is pushing for right-to-work legislation by creating “economic empowerment zones” in which local communities could decide if workers can opt out of paying dues to the unions which protect them in the workplace and bargain for their wages and benefits. In this case, empowering the economy means disempowering workers and decreasing their wages and benefits.

We have to ask, is this the type of economy we want to improve, stupid? Can’t we organize our economic life more smartly?


Sam Brownback’s efforts to improve the local economy in Kansas by dramatically slashing taxes on businesses and the wealthy overall have resulted in severe social decay, leaving a wasteland without adequate revenue to sustain public schools or vital social services.

So much for trickle-down economics. But even the ludicrous pretense that the wealth redistributed to the top will trickle down has been dropped.

Donald Trump, for example, in a recent interview with The Detroit News actually outlined a plan to drive down wages, pointing the finger at auto-workers who, he believes, earn too high of a wage. Expressing dismay that Ford plans to open a factory in Mexico, Trump proposed an alternative strategy for lowering labor costs that would keep jobs in the U.S. by closing plants in Michigan and moving production to more corporate-friendly regions: “You can go to different parts of the United States and then ultimately you’d full-circle—you’ll come back to Michigan because those guys are going to want their jobs back even if it is less. We can do rotation in the United States—it doesn’t have to be in Mexico.”

We see here no plan to address income inequality as a social ill but only to exacerbate it as a corporate benefit for the wealthy. Moreover, Trump reveals that the sought-after boosts in corporate profits are not intended at all to trickle down. The wealth only trickles up from wage reductions workers suffer, perpetrating another mass re-distribution of wealth from the bottom to the top.

For all their railing against calls for re-distribution of wealth, our nation’s economic elite seem to engage quite a bit in the practice.

Of course, even many of the most persistent arguments marshalled to defend policies aimed at addressing the wealth gap rely, typically, on their own brand of trickle up economics. Nick Hanauer, for example, a venture capitalist with the Seattle-based firm Second Avenue partners, dismisses “the dire warnings of economic calamity [that] rain down” whenever the prospect of raising wages arises. He terms this alarmist response “Chicken Little economics,” documenting that these alarms have sounded with every substantial increase in the minimum wage since 1938 without the economic sky ever having fallen. In urging New York to raise its minimum wage to fifteen dollars, he points to Seattle and San Francisco as cities that significantly increased their minimum wage to the benefit rather than detriment of their economies. Raising the minimum wage, so goes the argument, creates more able consumers, buoying the economy as a whole and causing wealth to trickle up.

Still, these arguments center around the question of whether raising the minimum wage—a small step in addressing income inequality—helps or hurts the economy. They never question the current economic arrangement in any fundamental way. Consider, for example, some of the following headlines on stories covering this ongoing issue on CNBC.Com: “State Minimum Wage Hikes: Help or Hindrance?” and “Easy Street or the Breadline?: New Year Wage Hike Debated.”

The debate usually goes like this: Opponents of a minimum wage increase offer the threatening prospect that the strain on employers will be so great that businesses, particularly small ones, will be forced to eliminate positions, especially entry-level jobs, resulting in more bust than boom for American workers. The other side usually represented asserts that since raising the minimum wage provides more disposable income for the lowest paid workers struggling to meet their needs, the increase will function as an immediate economic stimulus since the money earned will be immediately pumped back into the economy, which is largely driven by consumer spending. These proponents who see the increase as economic stimulus tend to downplay the Congressional Budget Office’s forecast that while 24.5 million workers will get a raise, 500,000 workers might lose their jobs were the federal minimum wage to be raised to $10.10.

While there is plenty of illogic in this debate, first we have to highlight the ill-conceived nature of the question itself, as asking whether increasing the minimum wage will hurt or help the economy leads us down a dead end.

Here’s what I mean:

From a progressive political perspective, what if we discover that raising the minimum wage would hurt the economy? Should we then cease to advocate for the infinitesimal redistribution of wealth that would help low-wage workers, who play such a key role in producing the wealth of our nation, meet their basic needs? Should the progressive position be that those working for low wages must continue to do so and stop asking for more, regardless of whether or not they can meet their basic needs on those wages, so that more people aren’t thrown out of work and the economy isn’t hurt?

Of course not, but progressives need to re-frame the debate. To those who argue that raising the minimum wage will hurt the economy, we need to ask how smartly organized is an economy in which those who do vital and necessary work cannot afford to meet their most basic needs.

The health of an economy, it seems to me, should correlate directly to the health of the people living within it, not to their economic impoverishment. If a healthy or strong economy requires that those who work within it to produce and distribute goods and services are not able themselves to access those goods and services to meet their needs, then we need to question the human viability of that economy, not worry about whether we’re hurting the economy with our policies. Indeed, an economy that achieves health when the people working within it suffer is one that we need to hurt by dismantling and overhauling it. The economy is supposed to serve us; we aren’t supposed to serve the economy.

What we need to do is remind ourselves that the purpose of an economy is, in the most efficient way, to produce and distribute goods and services to meet the needs of those living within the economy. As the wealth gap increases, it seems clear our economy is not doing that. Malcolm X famously said, “We didn’t land on Plymouth rock. Plymouth rock landed on us.” We might adapt this saying to characterize an economy that seems to land hard on the people who work within it rather than working hard for its people.

17 Replies to “It’s the Stupid Economy: Why Income Inequality Ought To Be This Election’s Hot Topic”

  1. …Trump, Kochs…all the billionaires are the same; sociopathetic excuses for humans who don’t give a “F”ing DAMN what happens to the peons as long as they get everything…and I mean EVERY-GD-THING that has the slightest value…

  2. Those ( Republicans ) that see a livable minimum wage as a threat, or call for it’s elimination, are really lusting for the re-institution of slavery.

    Their scheme is a reverse pyramid …with a race-to-the-bottom where everything ‘trickles’ down, and that’s all it ever is: a trickle.

    Time that this nation fulfilled the American Revolution, and eliminate ALL our ‘kings’.

  3. I know of one industry that needs reforming not only will it boost the economy but it can reduce the debt

    The Pentagon Doesn’t Know What it Spent 8.5 Trillion Dollars on

    When government is completely dysfunctional and seems not to serve the people’s interests, we have to wonder where our tax dollars are going. Thanks to a Reuters investigation by Scot Paltrow, we have an answer—or, rather, a non-answer. Apparently, the Pentagon has made use of $8.5 trillion of our tax money handed over by Congress since 1996—but don’t ask what was done with the money. The Department of Defense doesn’t have a clue
    Read More

  4. Oh,SOME know where ‘it’ and lots more went:
    Defense contractors ( corporations ), debt-servicing ( multi-national, non US, big banks ); and bribes, corruption, and lobbyists.

  5. Unfortunately, Americans have a short attention span. They were VERY interesting in income inequality in the 1930 and 1932 elections when it hit a peak of over 25% of wealth distributed to the top 1%. The House, Senate and White House all flipped Democratic by the 1932 Elections.

    However, by 1946, American voters put the GOP back in control of the Senate.

    I my opinion, the same thing holds from 2008 to today.

  6. America seemed to be healing and moving forward after the struggles of the Civil Rights movement.

    In the 1970’s and ’80’s, Blacks began working alongside Whites more, living next to Whites, coming into the homes of Whites on tv and film, flying and vacationing along with Whites, becoming friends, couples and marrying Whites more, and more Americans felt they were in reach of, or was actually living “The American Dream”.

    The Republicans and the powers that be decided they had to put a stop to that and the prosperity, hope, peace and equality that seemed to be within reach for America with their “Trickle down” bull.

    Republicans are cunning and sinister and I wish Clinton and Sanders and the good people of America would take a page out of Trump’s book and start calling them out for not being nice.

    President Obama has been too polite with them which didn’t inspire them to turn the other cheek, but only emboldened them to become more hateful and deranged.

    Well, look …

  7. Serious question. If this election should be run on income inequality why no mention of the progressives that is running for Congress since if anything will be done about it they write the laws?

  8. It’s amazing how some of these dips—- STILL believe in trickle down. It does NOT f—— work, period.

  9. The problem for socialism in this country is that it flies in the face of the American Dream. Most Americans admire the wealthy and want to be rich themselves. They believe in individual initiative. Demonizing millionaires and billionaires is not that appealing to the great span of the American public. Sanders and his income redistribution and a 90% tax rate is not attractive even to those it might help. Trump, who is no more presidential material than Sanders, has a 1% tax for those making up to $30,000; 5% for those earning $30,000 to $100,000; 10% for those earning $100,000 to $1,000,000; and 15% on incomes over $1,000,000. He throws in a 14.25% wealth tax on assets, excluding the primary home, over $10,000,000 and does away with the federal inheritance tax. Trump and Sanders have their far end of the spectrum supporters but in the end Americans vote moderate.

  10. There is all this talk about income inequality. What exactly would define “income equality”?

    The minimum wage: There are only two groups earning minimum wage. The first is entry level workers who are mostly teenagers working part time after school and on weekends. And damn few of them are working for only minimum wage.

    The other group is those in the service industry such as servers, bartenders and sky caps. They also earn $tips$ and many of them make a good living. Bars and restaurants are hit the hardest when MW is raised. Especially the small Ma and Pop bars that everyone loves.

    Now, if you are able bodied/minded, 20 years old or older and working full time for ONLY minimum wage:

    You have not proven to your boss that you’re worth more than that. The ones who get the raises are those that show ambition, do more than expected and want to learn.

    Or you’re too damn lazy or stupid to look for another job that pays your level of skill and knowledge.

  11. Great Comment!
    Beware, fellow plutocrats, the pitchforks are coming for YOU!

    If American’s Only Knew.
    2008’s Catastrophic Crash was Orchestrated Folks! Pubs did that to Enrich The Already Rich….who’ve watched it grow.

    Meanwhile, they knew the next Dem President would be putting out the Fire that Dubya and The Dick Set-Into-Motion.

    If the American People Only Knew.
    We need more of This:

    Nick Hanauer: “Beware, fellow plutocrats, the pitchforks are coming”

    (The Younger Generations need to see this)

  12. I’ve been wanting to get this historical definition/quote on Supply-side Economics (aka ‘trickle-down-economics’) out into the webisphere for a long time, it seems we have been debating this particular POV for a long-long-time, but there is so much truth in it, I hope it will take off & become the new meme– (pass it around ;): SUPPLY-SIDE ECONOMICS- The theory, popular under Ronald Reagan, that lower taxes for the wealthy would result in more money in the economy that would “trickle down” to benefit low-income persons. Belief in supply-side economics influenced Reagan to advocate a combination of reduced government spending for social programs, increased military expenditures, tax cuts for the wealthy, and a balanced federal budget. Opponents characterized supply-side economics as: “Feeding the Sparrows By Feeding the Horses.” (In Whitaker & Federico, p.361-2, 1997) -think about that–there’s truth in this.. ~Pass it on: this old-outdated, backward perspective sure is pure **it..

  13. Been wanting to get this historical definition/quote out into the web-universe for quite some time- hope you will pass it on, too (the more who know about it, the better -maybe it will become a new meme?;) -In the 1800s they called it the: “horse & sparrow” theory, but economists call it: “supply-side economics” & most people now call it the: “trickle-down economics” of Ronald Reagan. Definition: theory that lower taxes for the wealthy result in more money in the economy that would “trickle down” to benefit low-income persons. Belief influenced Reagan to advocate a combination of reduced government spending for social programs/increased military expenditures/tax cuts for wealthy/& a balanced federal budget. Opponents of this theory characterized supply-side economics as: “Feeding the sparrows by feeding the horses.” (Whitaker & Federico, p.361-2, 1997). -Think about this/pass it on-there is truth in this because any validity of the ‘trickle-down’ theory is surely pure $_it! ..

  14. Not since the age of the Robber Barons in the late 1800s has there been such income inequality in the United States.

    The wealthy industrialists with their mega-corporations were doing the same thing in trying to influence policy & laws with their money & lobbying efforts that our current-day corporate plutocrats are attempting in the wake of the Citizens United case decided by “our?” great Supreme Court.

    That era gave rise to Teddy Roosevelt & the “Trust-busters” to break up the big banks & corps, & later to the passing of the Glass-Steagall Act in 1933.

    LITTLE will change until we get something in place comparable to Glass-Steagall (Dodd-Frank doesn’t go far enough because it had to be watered down in order to get a few Repubs to vote for it), & strong, progressive leaders in office like TR (yes, TR was Repub, but he was a Progressive & he was more like Dem/Prog than Republicans of today/or even yesteryear).

    People–> VOTE President NOV 2016! & VOTE Midterms NOV 2018!

  15. Income Inequality negatively impacts our future generations. YOUR children/OUR grandchildren will not have the prospects & opportunity Americans enjoy unless we DO something to change the trajectory the Republican Old-Guard wants us to retrace. Remember/learn from history-refuse to walk the old path again


    “The day will come when the progress of nations will be judged:

    -Not by their military or economic strength,
    -Nor by the splendor of their capital cities & public buildings,
    -But by the well-being of their peoples:

    *By their levels of health, nutrition, & education;
    *By their opportunities to earn a fair reward for their labours;
    *By their ability to participate in the decisions that affect their lives;
    *By the respect that is shown for their civil & political liberties;
    *By the provision that is made for those who are vulnerable & disadvantaged; &
    *By the protection that is afforded to the growing minds & bodies of their children


  16. oops, it said I had 3 spaces remaining-sorry…

    United Nations Children’s Fund 1993

    *I love this world view/perspective/POV – I think this is what we, as a nation, should be striving toward…

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