American Workers in Age of Trump just aren’t being Paid Fairly

By Josh Hoxie | ( ) | – –

Imploring people to simply work harder ignores the fact that most jobs don’t pay enough to get ahead.

The gap between the rich and poor has been growing for decades. Some claim this growing gap is the natural result of smart, hard workers getting what they deserve (fabulous wealth) and lazy, mediocre workers getting what they deserve, too (poverty).

This framing is fundamentally wrong.

Consider, as Haitian filmmaker Raoul Peck points out, that Bill Gates’ net worth exceeds 30 years’ worth of the entire collective output of Haiti. Consider further that Gates’ full time job right now is to give away his money. All day, every day — through the Bill and Melinda Gates foundation — the Microsoft founder seeks ways to give away his enormous fortune.

Despite his best efforts, Gates’ treasure continues to rise, not shrink, year after year by more than 10 percent — meaning his $80 billion could become $1 trillion before his 90th birthday. That’s trillion with a T.

This is obviously an extreme example, but it’s illustrative.

Today’s inequality isn’t driven by individual choices, but by an unfair system that enables a few (mostly white) people to become wealthy, while many (mostly non-white) families are unable to build wealth.

The racial component of our growing divide is often overlooked, but it’s a critical part of just how unfair our economic system is. If current trends persist, it would take the average black family 228 years to reach the level of wealth the average white family already has today.

For comparison, George Washington started his presidency 228 years ago. It’s a long time.

If you think the main driver of poverty is lazy takers sitting around rather than working, the solutions to poverty are pretty straightforward: Eliminate public programs that help the poor, so they have to pull themselves up by their bootstraps. That’s essentially the doctrine of the modern Republican Party.

But imploring people to simply work harder ignores the fact that most jobs don’t pay enough to get ahead. The federal minimum wage, $7.25 an hour, isn’t enough to live on in any major city in the country. And half the jobs in the United States pay less than $15 an hour.

Getting an education isn’t a guaranteed pathway out of poverty either. Consider, as New School professor Darrick Hamilton points out, that black college graduates only own about two-thirds the wealth of white high school dropouts.

Creating a more fair and just economy will require solutions at the systemic level, not the individual level. That means acknowledging the unfair starting points we all begin with and taking steps to level the playing field.

One idea for how to do this is through baby bonds, also known as child savings accounts. This would basically start every child with a small savings account at birth, which would appreciate over time and could be used for getting an education or starting a business later on.

A 1992 bill called KidSave, for example, would’ve given $1,000 to each of the 4 million babies born in the United States. That would’ve grown to an estimated $700,000 each by age 65 thanks to the wonder of compounding interest.

Had child savings accounts been established in 1979, the racial wealth gap would be 82 percent lower than it currently is, according to the Annie E. Casey Foundation. The gap within racial groups would likely be smaller, too.

Other systemic ideas include including instituting single-payer healthcare, ending mass incarceration, investing in debt-free higher education, and much more.

To create a more fair and just economy, one first must recognize that the current economic system is deeply unfair and unjust. Then the work to change the system can begin.

Josh Hoxie directs the Project on Taxation and Opportunity at the Institute for Policy Studies.



Related video added by Juan Cole:

Would a $15 minimum wage work in Ohio? NBC4 WCMH-TV Columbus

2 Responses

  1. Back in the 1950s, Louis Kelso and Mortimer Adler’s book, The Capitalist Manifesto, explained Kelso’s lifelong argument that automation & productivity increases makes it more and more impossible to keep people productively employed. The choice is to either allow inequality to skyrocket back to 19th century levels, or to use an infinitude of governmental band-aids to redistribute wealth from company owners to everyone else. It’s ironic now that Kelso’s main concern in the Eisenhower era was that there was too much of the latter; it was inconceivable to him that society would be deformed by the Reagan revolution to swing in the barbaric neo-Victorian direction instead.

    But it may now be too late to impose his solution: force the banking industry to finance the conversion of workers into worker/owners through employee stock ownership. Like the lifetime savings plan suggested above, the idea is to get ordinary citizens into the investor class over time, because soon the working class must become the unemployed class. Growing share ownership allows the nature of employees’ earnings to transition from wages reflecting the actual (declining) value of their labor, to dividends based on the value of decisions they make as shareholders using knowledge they acquired before the robots took over.

  2. There are some simple reasons why American workers are getting screwed . . .

    – The “rugged individual” syndrome (basic selfishness) where American workers refuse to unionize to ensure fair treatment by companies.

    – Technology is eliminating most jobs. In many cases robotics is lots cheaper than any human no matter how uneducated the human is.

    – Robotics means the USA has a HUGE excess of uneducated workers. That is, the supply vastly exceeds the demand. When supply is high and demand is low, prices (wages) go through the floor

    – Americans, who will NEVER be rich, care far too much about how much the rich pay in taxes instead of electing politicians that will tax the rich to the maximum. Personally, I have no problem with anyone that makes more than US$250k/year paying 99% tax on everything over US$250K. NO ONE needs more than US$250K/yr to live.

    – Americans have zero understanding of macro economics, so are easily sold a HUGE bucket of lies.

    – Americans vote republican out of racism and greed – “we can’t have those non-whites getting one cent more than the poor whites.” That is, Americans vote out of pure ugly emotion never in their own self interest.

    If Americans actually thought about their futures, they would vote progressive all the way and transfer as much wealth as possible from the rich to the poor and middle class (those making less than US$250k/yr).

    BUT . . .

    Because that would be “socialism” and Americans will never do that, even though socialism is a very good social construct.

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