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?
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.
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 marshaled 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.
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.
