By Carol Driscoll
What is the meaning of the alarming growth in income inequality throughout the world? According to a recent report issued by the charity organization Oxfam, “by next year, the world’s wealthiest 1% will control as much of the planet’s assets as the other 99%.” About this, Winnie Byanyima, Oxfam’s executive director, asks…
“Do we really want to live in a world where the 1% own more than the rest of us combined? The scale of global inequality is quite simply staggering, and… the gap between the richest and the rest is widening fast.”
The stark human costs of increasing income inequality include millions of people in the U.S. forced to work two or even three low-paying jobs just to stay afloat, and often still not able to afford sufficient food and medical care. As the New York Times reports (Jan. 26), “Since 2000, the middle-class share of households has continued to narrow, the main reason being that more people have fallen to the bottom.” Today wages are stagnant for most people lucky enough to have a job. Meanwhile, the so-called drop in our unemployment rate is, according to Forbes Magazine, “simply misleading….Despite the significant decrease in the official U.S. Bureau of Labor Statistics (BLS) unemployment rate (6.2%), the real rate is over double that at 12.6%.” This statistic is mirrored in the shameful fact that 48 million Americans—more than one in seven—were living in poverty in 2014 (U.S. Census Bureau). Union jobs were once an entry into the middle class, enabling men and women to live with economic security: to buy a home, educate their children, take a vacation. Many of these jobs have been eliminated as corporate America has moved much of manufacturing overseas, and as some states and cities are privatizing public services that are essential for the well-being of millions, including children and the elderly.
Income Inequality and Profit Economics—the Link
In an earlier post for Unions Matter! I wrote: “Income inequality is the inevitable by-product, the direct result of an economic system based on profit….” What I didn’t say then is something I’ve seen since: that this inequality is not a “by-product” of profit economics, but is essential to its very existence! In our profit economy, wealth coming from the labor of many persons doesn’t go to the workers who created this wealth, but instead to corporate executives and shareholders, who do no work at all for their dividends. In her commentary to an issue of The Right of Aesthetic Realism to Be Known, Ellen Reiss, Aesthetic Realism Chairman of Education, describes the basis of the profit system, which bothcreates and depends upon growing income inequality:
“In the last years, I have been describing the following fact: those who insist that the profit way must be the basis of our economy have been trying to do the one thing that can now keep it going. That one thing is: make Americans work for less and less pay, so more and more of the money they earn with their labor can go into the pockets of the owners, who don’t do the work. Only by increasingly impoverishing the American people can the profit system now go on. Of course, to pay people less and less, to impoverish them successfully, one must try to annihilate unions. Unions—which have fought for and won better economic lives for people over the decades, are one of the biggest embodiments of ethics as a force.”
Ellen Reiss is right and what she’s describing is compelling evidence that income inequality is needed for the profit system to continue.
Income Inequality and Economic Growth
A recent article in The Atlantic Monthly, “17 Things We Learned about Income Inequality in 2014,” states:
“Inequality could also impair growth if those in the middle and at the bottom have no money to spend…. Research by the International Monetary Fund argues that high inequality is correlated with low economic growth.”
Clearly, for economic activity to continue and grow, the daily labor of men and women is indispensable. It is their ability to provide services, to produce and transport the goods we all need—and to have the money to pay for them—that drives our economy. After all, as Eli Siegel, the founder of Aesthetic Realism, once pointed out with humor the central role of labor in economics: “You can bring $100,000 to a tree, but it won’t grow toothpicks.” Mr. Siegel used literature, history, economic data, and current events to document his statement below, which I see as indisputably true—and I’m proud it’s the motto of this blog:
“The most important thing in industry is the person who does the industry, which is the worker. That…never can change. Labor is the only source of wealth. There is no other source, except land, the raw material….Every bit of capital that exists was made by labor, just as everything that is consumed is.“
This is why unions are so important: they have persistently and courageously fought for respect, for dignity, for workplace safety, for decent wages in the pockets of working men and women. Related to this is the vitally important question, asked by Eli Siegel, which must be answered for people’s lives to fare well: “What does a person deserve by being a person?” The answer is, every person deserves—as a beginning point—these things: a roof over one’s head, nutritious food, guaranteed medical care, an education, a good paying job, and—not least—the right to join a union.
What Do the American People Hope for in 2015?
In her commentary, Ellen Reiss explains:
“The thing needed to replace the profit system is….an economy based on ethics and aesthetics: an economy based on seeing that the way to be truly selfish, the way to express yourself, be yourself, is to be just to people, things, the world into which we were all born.”
As a person who worked for, benefitted from, and loves unions, I believe that only an economy based on ethics and aesthetics will eradicate income inequality, and meet the hopes of people. It is necessary for every union official to study what this means to be an effective force for economic justice for everyone.