That economic inequality has increased over the last half century can hardly be denied. I also happen to believe that you can’t maintain social equality without greater economic equality than we have now. At USA Today three pundits offer three different strategies for addressing the problem:
- Tackle childhood poverty
- Strengthen labor unions
- Exert political power to give workers more leverage in negotiating higher wages
I think that all three are ignoring some important factors so I’ll offer my own thoughts. The factors they’re ignoring include that higher wages are meaningless to people without jobs and the government cannot require that jobs be retained within the U. S. at a higher wage level.
What I would do is somewhat different. I would implement the following:
- We must control and reduce immigration. Nothing else makes a bit of difference as long as employers can import a workforce, whether within or outside the law, at lower wages.
- Restrain the ability of companies that engage in offshore outsourcing to bid on federal contracts. That might go as far as precluding it. If that doesn’t work, impose other restrictions, like prohibiting publicly-held companies from engaging in offshore outsourcing.
- We need to definancialize the economy. I have written on this subject in the past.
- We need to control wages in highly subsidized sectors.
I’m open to other suggestions but I think that those are sine qua non.
I agree that it’s a serious problem but I doubt that we can legislate our way out of it. My view of the situation is from the very bottom up, that is, I’ve been destitute despite working every day and I still know many people in the same situation. Because of my “career” in sales I’ve also known quite a few people who are in business and have done very well.
Let’s start here: The upper and middle class do not shop in convenience stores, the underclass hardly shops anywhere else.
The upper and middle class do not:
Have multiple babies out of wedlock.
Play the lottery, scratch off cards, pickle cards, bingo, slots.
Buy autos they cannot afford on credit and have them repossessed,
losing their investment.
Smoke cigarettes. $5.00/pack, 2 a day x 365 =$3,650/year
Get arrested. Now here’s a place for legislation.
If you have a record, say shoplifting, you are damn near unemployable.
IMO, if you have served or paid the penalty, your record should be expunged.
Gain weight. Get a handicapped sticker because of that, go on disability.
Use illegal drugs. Almost every employer except kitchen help drug tests.
Use cash advance stores. 2,000%? interest.
Max out credit cards. If you are late on ANY bill, rates shoot to 39%.
And so it rolls downhill. Fail to register vehicles on time. Ticket.
No auto insurance? Ticket.
Can’t pay the ticket? Warrant.
Auto breaks down? Towed. No money? You’ve lost your car, but not your debt on it.
When you are poor and honest, life is like walking on a railroad track, one foot in front of the other, any misstep, disaster, there’s just no cushion.
And there’s no cushion because you are trying to run too fast.
When you are poor, you need to act like it, admit it. knuckle down and build that cushion. Don’t try to dress like you have money, or drive like you have money, or gamble like you’re going to hit it.
And yet I know from long experience, this advice is useless to help most poor people. The problem is time preference. They want it now, and that keeps them poor.
Feel free to try any legislation you think will work, I’m skeptical.
‘And yet I know from long experience, this advice is useless to help most poor people. The problem is time preference. They want it now, and that keeps them poor.’
Lack of impulse control is a big contributing factor to staying poor. A culture that encourages sponging by shiftless family members is another.
‘Tackle childhood poverty
Giving money to the parents to feed and clothe children is pointless unless you can ensure that they actually do it. Child poverty is also an ever-shifting target, see how childhood hunger has shifted to food insufficiency (i.e. child misses a meal or two during the course of a year) to justify continued outlays. It’s a problem, yes. But allowing people to keep their own money to start with might be better.
Strengthen labor unions
For what purpose? To increase campaign contributions to their preferred politicians? The goals of the original labor unions have largely been met. Their primary purpose now is a threat to ensure that employers don’t revert to the bad old days before George Meany and John L Lewis (and IMO many would if there were no labor unions).
Exert political power to give workers more leverage in negotiating higher wages
Exert political power to force higher wages results in fewer domestic jobs. Some people can’t read reports or understand statistics.
Childhood poverty is often a result of parental choices.
‘We need to control wages in highly subsidized sectors.’
We need to desubsidize highly subsidized sectors. That would mostly take care of controlling wages.
That’s where we started. It didn’t work. As a society we have extensive experience with laissez-faire but as individuals not so much because it was abandoned more than a century ago. We need to get our heads around the reality that interfering in markets is sometimes necessary but when we do it requires oversight, compensating measures, and ongoing adjustment. Policy is not easy. Right now we’ve got the interfering in markets part without the compensating measures. That introduces distortions that retard economic growth.
“Exert political power to force higher wages results in fewer domestic jobs. ”
So we are just stuck permanently with bad inequality. Truly, the wealthy have a God given right to such a high percentage of our wealth and earnings.
Steve
Truly, the wealthy
To 90% of Americans, that’s you, Steve.
I would bring training for the trades back into the high schools. When I first started teaching a child could apply to enter into a training program their junior year. They graduated both with a high school diploma and a good paying job. There was no debt and these classes were extremely motivating with little to no discipline problems. Being in a trade provides for a decent living.