Working for a Living (or Economic Apartheid)

Hola mi Gente,

I’m almost afraid to say it because it might jinx it, but I can feel spring in the air (now, watch it snow for Easter. LOL).

Looking for work, or being essentially unemployed, is very stressful. These are the times when I find I have to be more vigilant in applying spiritual principles and practices. 

* * *

The endless slums of Detroit, MI

Economic Apartheid

Lots of people who are smart and work hard and play by the rules don't have a fraction of what I have. I realize I don’t have my wealth because I’m so brilliant. Luck has a lot to do with it.

 -- Eric Schmidt, former CEO of Google, Inc.

As I watch Hillary Clinton supporters shilling neoliberal economic theory, I am reminded about the myths that rationalize economic policies that have devastated the middle class. Since the 1980s, income inequality has risen to proportions never seen before in this country. The constant bray of neoliberals like Hillary and neoconservatives is that if we continue to adhere to the prevailing economic policies that gut regulations and worship the market, we will all be better off.

In fact, the vast majority of Americans are worse off today than they were20-30 years ago. Today, most of us work far longer hours for less pay and less job security. Between 1979 and 2007, the top 1 percent took home well over half (53.9 percent) of the total increase in U.S. income. Over this period, the average income of the bottom 99 percent of U.S. taxpayers grew by 18.9 percent. Simultaneously, the average income of the top 1 percent grew over 10 times as much—by 200.5 percent.

And yet, economic conservatives continue to clamor for more tax cuts for the rich. As a percentage of wealth, middle class workers pay more in taxes than wealthy individuals. In fact, some pay more in taxes than multinational corporations. Another name for neoliberal economic policies is what’s known in the con game as a “bait and switch.” Meaning you may get a nominal windfall on your return, but you’re paying out the ass for other crucial services such as college, childcare, and other “luxuries.”

In his 2004 report, I Didn't Do It Alone: Society's Contribution to Individual Wealth and Success, Chuck Collins spotlights successful entrepreneurs and concludes that the myth of self-made success is destructive to the economic infrastructure that fosters wealth creation. Collins states, “How we think about wealth creation is important since policies such as large tax cuts for the wealthy and market deregulation often draw on the myth of the self-made man.” He adds, “Taxes are portrayed as onerous, unfair redistribution of privately created wealth -- not as reinvestment or giving back to society. Yet, where would many wealthy entrepreneurs be today without taxpayer investment in the Internet, transportation, public education, the legal system, the human genome, and so on?”

 

It seems that when you actually ask successful people, they tell a different story than the ones being sold in the corporate media (remember that five corporations own the majority of US media). They emphasize key factors such as the advantages of privilege, and inheritance and race. Others emphasized government-provided services such as subsidized college tuition, and government investments in technological research. And still others noted good old-fashioned luck. Click here to read the full report.

Neoliberal superstition would have you believe the myths so that the long con can continue. If we are lucky, history books will write about this era as the greatest con ever.

On the other side of the ledger are the vast majority of us who scrape by from paycheck to paycheck, year after year, without much to show for it. When income barely covers the basic cost of living, building even a small amount of wealth becomes impossible. I recently read an article that noted even people in New York City making over $100,000 a year are fearful they would not be able to afford their apartments.

As I alluded previously, income inequality has grown since neoliberals have taken over economic policy. Between 1983 and 2003, average income for households in the top 5% grew by $108,987. The gains were far smaller for every other income group. In 2003, the 20% of households with the least earnings scraped by with an average income of just $9,996, only $839 more in real dollars than what they had 20 years earlier.

Income and wealth are related in two ways. People with high incomes can accumulate wealth, and this wealth can generate additional income. However, for the vast majority of Americans, income is just a means of surviving.

So why should you care about economic inequality? You might point out that many poor people in the US today own cars and cell phones, luxuries that even millionaires didn’t have a hundred years ago. But last century’s luxuries are this year’s necessities. Let’s see you find and keep a job without a car or cellphone, for example. Furthermore, human beings tend to define their standards of living in relative, not absolute terms.

Extreme inequality (as found here in the U.S.), reduces people’s sense of inclusion in the larger society. It reduces the likelihood that they will be able to work together to solve social problems. It also contributes to overt forms of social conflict.

Studies of US states and Canadian provinces show that higher income inequality is associated with higher rates of homicide. In 1990, for instance, the homicide rate in the US was Louisiana. That state also had the highest level of income inequality. In fact, in a remarkable study published in book form, The Spirit Level, there is strong evidence that more unequal societies are bad for almost everyone within them -- the well-off and the poor. Almost every modern social and environmental problem -- ill health, lack of community life, violence, drugs, obesity, mental illness, long working hours, big prison populations -- is more likely to occur in a less equal society. That we, the people, continue to vote for and abide by these policies is one of the great mysteries of modern times.

References

Census, “Historical Income Tables-Households,” Tables H1 and H3 (click here) 

Daly, M., & et al. (2000). Income inequality and homicide rates in Canada and the United States. Canadian Journal of Criminology, 43(2), 219-236. (click here)

  

Wilkinson, R., Pickett, K. (2005). The spirit level: Why greater equality makes societies stronger. New York: Bloomsbury Press. (click here)

Landa, D., & Kapstein, E. B. (2001). Inequality, growth, and democracy. World Politics, 53(2), 264-296. (click here)

Kawachi, I., Kennedy, B. P., Lochner, K., & Prothrow-Stith, D. (1997). Social capital, income inequality, and mortality. American Journal of Public Health, 87(9), 1491-1498. (click here