Income disparity much more than a campaign issue
I’m a late-blooming entrepreneur from a lower middle-class upbringing. My parents came from farming and mill-town childhoods, and they bought wholesale into the part of the American dream that told them their children, through education and hard work, will do better. But their faith in my ability to move up in the world stands in stark contrast to what many Americans can expect for their own children today. In fact, since the 1970s real income for the bottom 80 percent of American families has declined. Eighty percent. That sounds preposterous, but it’s the sad truth.
This election will be decided (hopefully) when this edition of The Smoky Mountain News hits the streets. But no matter who wins, it’s this issue — which became a hot-button campaign topic — that will haunt me for the next few years. How can this have happened in this country? How has a nation that has always prided itself on egalitarian and capitalist principles let this kind of economic stratification become the norm?
Some may have been distracted by the politicizing of this issue to grasp its message: today the top 1 percent of Americans control 43 percent of the financial wealth while the bottom 80 percent control only 7 percent of the wealth. Incredibly, the wealthiest 400 Americans have the same combined wealth as the poorest 150 million people, about half the country.
Many are trying to convince you that those who are outraged by this disparity are advocating some sort of socialist fix. That is politics, not reality. In truth, we should wonder why we have a society – and a government – that lets those making these outrageous amounts at the top of the scale somehow feel they deserve so much, that “the government” should not “redistribute” their wealth.
Let’s bring this down to earth. To begin with, it’s not business owners on Main Street in Waynesville or Sylva or in like places across the nation who are part of the problem. These local entrepreneurs may make 50 percent or 100 percent more than their employees. Maybe if those business owners are really successful and have a little luck, they pay themselves two or three times what their workers make. Perhaps a few of those success stories have a couple of really good years where they sock away 10 times what their workers earn and can see a safe retirement in their future. These business owners will pay 33 to 35 percent in taxes. These are the people doing it right, keeping jobs in communities and putting their money into local businesses and charities.
The average CEO of a large company made 50 times more money than the average worker back in the 1970s. Today, the average CEO of the same-sized company makes almost 300 times more than the average worker. Do the math on that. These are the companies that we are told are too big to fail, the ones the government rescues and props up and that politicians on both sides of the aisle depend on for campaign contributions and PAC support.
Here’s the truth of it. Wages have been declining for almost four decades for everyone except the top 20 percent, yet the GDP has been steadily rising. In my basic understanding of economics, that means more money is coming into the overall economy, but those at the very top are taking more than ever.
Americans celebrate capitalism and all its promise. We idolize our system of economic mobility, and there will always have to be winners and losers. But when the very rich don’t think the working people deserve a better standard of living, then the core of our political belief system won’t hold. Yes, the poor have big-screen TVs and smart phones, but they can’t afford to send their kids to college, don’t have access to decent health care, and are staring down a retirement and old age without the means to live out a modest life. The trifles don’t buy security.
Since this has become an election issue, new reports are surfacing that point to the social cohesion that occurs when income disparity shrinks. People at both ends of the spectrum feel better, and the economy does better. Just two weeks ago, a group of top CEOs said they would be willing to pay more in taxes if they could trust the government to spend wisely.
The answer to this whole issue is in an overhaul of the tax system. Say what you want, but small- and medium-sized businesses, and individuals in the bottom half (or more) of the income brackets need to pay less. Huge corporations that pay executives millions in bonuses need to pay more, as do those CEOs themselves. It’s simple from the outside looking in.
Demanding that our leaders create a fair system is not class warfare. Class warfare is what we will have if things keep heading the way they are now.