The threats of more inequality
The United States has been experiencing a growing inequality that continues to get worse. And the majority of our wealthy individuals and corporate oligarchy are to blame.
Are they too dense, or uncaring, to see what the end result will be if they don’t share more of their profits with their workers?
For the last five decades, we have been seeing our middle class shrinking as more and more of our citizens have less disposable income (the little that’s left after the necessities of food and shelter are paid).
The result is a growing lower income class with too many slipping into poverty and homelessness.
We have too many high school graduates who can’t afford higher education and therefore are forced to accept lesser paying positions. And many who did get college degrees borrowed so much that their disposable income is reduced by huge debts.
And now more young folks live with their parents longer because they can’t afford appropriate housing. They are prompted to delay marriages and children.
Meanwhile, many who leave their parents’ home, including some who marry, satisfy their desires with mounting credit card debt – raising credit totals to record highs.
In addition, a growing list of employers – especially retailers – have drifted into hiring a higher percentage of part-time workers to escape providing benefits. So those workers can’t rely on a stable income from week-to-week as employers manipulate work hours.
As these situations mushroom and grow, I find it hard to understand the thinking of our wealthy and corporate oligarchy. They continue with an attitude of providing workers as little as they can in wages and benefits.
Don’t they understand that our economy works best for everyone when people have extra money to spend?
Look at what’s happened in rural areas. Businesses have closed. Medical and health care services have left town. All are businesses that at one time ordered the supplies and inventories they needed to serve and sell to local citizens. But they needed a minimum volume of patrons and minimum sales to stay open.
Businesses with falling sales face two choices: either charge more for their products and services or close. And if customers won’t, or can’t afford, to pay higher prices, the only choice remaining is closing.
So suppliers also suffer losses in sales. Such rural closures are examples on a small scale of what can happen with any large corporation as well. Our economy is based on volume sales, and when customers no longer have enough disposable income to buy products and services, business closures result.
When will our wealthy oligarchy realize that increasing inequality is not sustainable? It’s why we had the Great Depression and continue to face deeper recessions.
In the Depression, folks simply did not have money to buy what businesses were selling. They were forced to barter for food and shelter. They had no money to offer – just their labor.
When an ordinary guy like myself can understand these simple economic dynamics, surely CEOS and boards of directors can see the same dangers.
They are the ones causing the growing inequality by failing to pay reasonable wages so workers have some disposable income.
But I’m afraid the prevailing attitude among too many of our corporate and political leadership is: “I’m gonna get mine. I don’t care about others.”
The one glimmer of hope I see for interrupting this mounting inequality is the increasing public support and growth in unions. That support has been cited in recent reports by the U.S. Treasury, Economic Policy Institute, Forbes magazine and Capital & Main online news.
The U.S. Treasury report of last August cited “evidence that unions serve to strengthen the middle class and grow the economy at large.” It concluded increased unionization has the potential to aid in reversing “the stark increase in inequality seen over the last half century ... (and) reducing the financial fragility of the bottom 95 percent.”
The Economic Policy Institute remarked that states with legislation more agreeable to unions have a stronger economy. They provide 3.2% more income to workers
than states with antiunion laws. States with anti-union laws “have lower wages, reduced access to health and retirement benefits and higher workplace fatality rates.”
Also, we know that states with higher wages provide more tax income.
Forbes observed that today’s unions are “a new kind of beast” – different
from those of 50 years ago. They are more “reform-minded, open to innovation,” and eager to partner with employers on education, training and other workplace improvements.
One union official told me today’s unions frown on resorting to the strikes of past decades. He noted his union and some others have no-strike policies, and agreements instead that require binding
arbitration after a lengthy series of negotiations fails to result in a settlement on major issues.
All of the developments I’ve cited here should indicate to corporate leaders that they need to change their attitudes and policies. Failure to do so can only result eventually in would-be customers lacking the ability to purchase their products and services.
We already are seeing
such results in the reduced purchasing abilities of our Gen Z and Millennial generations.
Darrell Berkheimer, a retired Grass Valley journalist, filled editor positions in Pennsylvania, Utah, Georgia, Texas and New Mexico during his 60 years of writing. He has nine books of essays available through Amazon Books. Contact him at mtmrnut@yahoo.com.