Monday, June 6, 2016

Income Inequity or Economic Disparity?


Defining our terminology.

A lot of catch-phrases, sound bites, and chain-yanking buzzwords get used and abused, especially during an election season.

Phrases such as "income inequity."

Republicans bristle at the term, because it's generally used by liberals to criticize wealthy people for their wealth, especially as America's middle class continues to stagnate, and its earning power withers.

Yet it's hard to deny that, well, America's middle class has indeed stagnated, and that our earning power has indeed withered in comparison with previous generations.  Just look around within your family, your friends, your co-workers, and your broader sphere of reference.  How many of y'all are enjoying a higher standard of living today than you did growing up?

And if your standard of living today is higher than it was when you were a young-un, compare your lifestyle today with the one your folks had, when there was likely only one breadwinner in your family.  Or your family's breadwinners were less educated than you are today.

Are you bringing more to the table today, but getting the same meal?

Of course, many American families have been able to at least hold their own over the past generation or two.  Some American families have also eased their way into a higher economic class, since the number of wealthy Americans has steadily increased over the years.  Yet by and large, our poorer classes have grown in number as well, while our middle class is hardly robust.

Sure, I drive by daycare centers when parents are picking up their kids, and I see a lot of foreign luxury cars in the parking lots, but how many of those parents work longer hours, and with how much more education, compared with their own parents, back in the day?  Besides, how many of those foreign luxury cars are leased (which is far cheaper than buying)?

Indeed, much of the wealth we see may be for show only.

I have Realtor friends who tell me many of the big McMansions being purchased at astronomical prices in the best exurban neighborhoods across north Texas... surprisingly, they're sparsely-furnished.  Maybe a few big-screen TVs in the bedrooms, but some of those extra rooms sit completely empty.  Why?  Because families are spending their money to stage an impression of affluence, but behind the stage is a bare-bones mortgage-paying operation.

This evidence is anecdotal, but many of the statistics describing America's economy seem to have cooked data, depending on the slant its producers want to spin.  We know wages may be up, but the cost of living is up, too.  We know many high-paying manufacturing jobs have been shifted overseas, and have been replaced by low-paying service jobs.  We know that a college education can usually command a higher salary than a GED, but look at all of the part-time no-benefits jobs, and the low-skill workers flooding the United States - whether they're here legally or not.  And who still thinks a 401k really is as good as a traditional retirement package?

Add everything together, and Donald Trump has at least one thing right:  we're not as great a nation as we used to be.

But is "income inequity" the problem?

To a certain extent, incomes may indeed be inequitable, at least in terms of what workers think they're worth!  But capitalism has a funny way of determining which jobs are worth more than other jobs.  It may be hard to argue that a Wall Street hedge fund manager is worth more to society than a heart surgeon, but capitalism says so.  Besides, very few Americans could afford to pay their heart surgeon a hedge fund manager's salary.

We have a society based upon money and wealth (sorry, America is not about freedom as much as it is about money; the Revolutionary War was fought over taxes, remember?).  And if a hedge fund manager can make money off of somebody else's money (which in any other context would be the very definition of a shyster), that's going to be more valued, because all a heart surgeon can do is save somebody's life.

Is that inequitable?  Maybe, but debating the point distracts us from the real issue.

And what is the real issue?  It's that we have "economic disparity" in the United States.  And not just a disparity between income levels, which would be a normal function of the choices people make regarding the jobs they take and how they spend their money.  It's a disparity in access to wealth, and our ability to preserve that wealth.

A lot of people work very hard - physically hard - for not a lot of money.  And some people exert very little physical, mental, or emotional energy and yet are quite wealthy.  If we were to simply try and bridge the gap between these two lifestyles, we'd be flirting with Communism.  Pay as an incentive is not a bad thing, although assuming poor people don't work as hard as rich people often is.

However, some folks have access to greater revenue streams than other people do.  For example, some people have access to sophisticated forms of technology that poorer people don't.  Sure, a lot of poor people have smartphones, but that's not the type of technology that will help them land lucrative high-tech jobs.

Some critics say that an even greater problem exists in America's tax codes, which are written to benefit people who have money.  For all the folks who squawk about today's obscene taxes on the rich, learn your history:  During World War II, the top tax rate was over 90%.

Yikes!

But then again, that was back when Americans wanted to pay debts incurred by wars.

Consider, too, that while many middle class Americans are small-business owners, they individually can't wield the economic and political clout that far wealthier business owners can.  For example, small businesses can't wrest economic development incentives from cities and states to relocate or expand like large companies can.  They also can't afford rent spikes and other inflated costs.  For several years now, New Yorkers have grown increasingly agitated over the re-branding of Manhattan, from the borough's kitschy neighborhood mom-and-pop stores to cookie-cutter chain stores.  The reason?  Chain stores have deeper pockets and broader logistical power to compete in the thin-margin world of New York City retailing.

But is everything tilted to favor the biggest or wealthiest?  Consider the extreme opposite of the income spectrum; the unwed welfare mother.  Can't she receive government benefits based on the number of children she has while she is unmarried?  How fair is that?

Most right-wingers like to presume that unwed mothers become baby factories because the subsidies each child receives represent a gold mine of entitlements.  However, the size of most welfare families has remained roughly consistent with the size of most non-welfare families in the United States.  Meanwhile, the value of welfare benefits has decreased over 25% during the past twenty years.  And the number of children on welfare has decreased by 66% since 1996.

But we don't have fewer poor kids, do we?  Not by any measure.  Today, 25% of all American kids are being raised without a father, and nearly half of those kids live below the poverty line.  What kind of hurdles do you suspect such living conditions make for kids hoping to escape poverty and climb up through the middle class?  It's called "institutionalized poverty," and it's been a problem for generations now, with no respite in sight.

So, since we're talking about kids who have no control over the family into which they're born, perhaps "income inequity" is some type of problem for them.

Yet still, economic disparity for a broader cross-section of our country is the buzz phrase that few of us can deny.  And economic disparity is a problem, because it engenders envy by the have-nots of things owned (or leased) by the haves.  Economic disparity helps perpetuate hedonistic living by inflating the value - both cost-wise and consumption-wise - of status commodities.  That, in turn, distorts spending patterns and helps create unrealistic expectations that people use to evaluate who they want to be, what they want to do, and how they can contribute to our overall society.

And it's not just poor people who distort our economic picture.  Wealthy people can distort it as well, by prioritizing the hedge fund managers and their ability to manufacture money from money without actually creating a product from which the broader society can benefit.  Having wealthy people add to their wealth doesn't benefit the broader society as much as a lot of wealthy people want us to believe.  After all, the reason people are wealthy is because they're hoarding a certain amount of their wealth.  Think about it:  If they were spending it on something, like developing new things, they wouldn't have that money, would they?

After all, it takes money to make money, but it seems everyone wants the quickest returns possible.

Nevertheless, while many of us may be skeptical of the way wealthy folks may or may not hoard their money, that doesn't mean that their wealth is somehow "inequitable."  Having money isn't itself good or bad; it's how you earned it (or not), and how you treat it that matters.

Which brings us back to "economic disparity" as being a better way to couch our country's widening gap between the haves and the have-nots.  And remember, having an economic disparity isn't itself good or bad, either.  It simply means that our economy rewards different people for different jobs, and lets people accrue wealth based on whatever paths their individual lives may take.  And there's nothing intrinsically wrong with that.

However, when the gap between the haves and the have-nots widens as much as it's been doing lately, isn't that generally a sign that things are not functioning as well in our economy as they should be?  After all, how long can capitalism run on a small class of wealthy people and a large class of mostly poor people, which is the direction our disparity is headed?  How long can a democratic republic run in such an economy?

Not that the wealthy should be punished for being wealthy.  Or the poor ridiculed for not being wealthy.  In fact, should wealth be the standard by which our economy is judged?

How about an economy based on a job well done?  Ability?  Productivity?  Intuition?  Commitment?  Innovation?  Intelligence?  Wisdom (it's not the same as intelligence, after all)?  Experience?  Reliability?  Honesty?

If our economy becomes all about the "winners" being defined as the ones dying with the most, you know how many losers there will be?

Well, the "winners," for starters... because then we'd probably be living with income inequity.


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