The other day, I was involved in a discussion about income inequality. Now the term "income inequality" is indeed something of a misnomer, in that many people interpret it as meaning that one who believes it is a problem, is advocating a standard income for all. Which is the furthest thing from the truth. Of course there will be differences of outcomes in a growing economy. However, what the term income inequality really refers to is the ratio: The fact that growing numbers of American corporations are hauling in wads of cash for the elite who run the corporation without doing anything to help the constituencies that they-as publically chartered corporations (or at the least, entities that operate in the public sphere)-interact with and represent.
The discussion spriraled quickly, as they so often do these days, into conservative talk radio talking points with someone inevitably spouting the completly bogus and unethical line: " Stop trying to take from others and instead go out and make your own money. Stop being jealous of the success of others."
It is total and complete bullshit. Here is why:
One of the big reasons the U.S. economy is so lousy is that big American companies are hoarding cash and "maximizing profits" instead of investing in their people and future projects
This behavior is contributing to record income inequality in the country and starving the primary engine of U.S. economic growth — the vast American middle class — of purchasing power. (See charts below).
If average Americans don't get paid living wages, they can't spend much money buying products and services. And when average Americans can't buy products and services, the companies that sell products and services to average Americans can't grow. So the profit obsession of America's big companies is, ironically, hurting their ability to accelerate revenue growth.
One obvious solution to this problem is for big companies to pay their people more — to share more of the vast wealth that they create with the people who create it.
The companies have record profit margins, so they can certainly afford to do this.
But, unfortunately, over the past three decades, what began as a healthy and necessary effort to make our companies more efficient has evolved into a warped consensus that the only value that companies create is financial (cash) and that the only thing managers and owners should ever worry about is making more of it.
This view is an insult to anyone who has ever dreamed of having a job that is about more than money. And it is a short-sighted and destructive view of capitalism, an economic system that sustains not just this country but most countries in the world.
This view has become deeply entrenched, though.
The authors of the viewpoint that it is nothing but envy, are engaging in group selfishness. They justify their own selfishness, by projecting on others the idea that they have a right to be that way. They don't.
In other words, you get told that anyone who suggests that great companies should share the value they create with all three constituencies instead of just lining the pockets of shareholders is an idiot.
After all, these folks say, one law of capitalism is that employers pay their employees as little as possible. Employees are just "costs." You should try to minimize those "costs" whenever and wherever you can.
This view, unfortunately, is not just selfish and demeaning. It's also economically stupid. Those "costs" you are minimizing (employees) are also current and prospective customers for your company and other companies. And the less money they have, the fewer products and services they are going to buy.
Obviously, the folks who own and run America's big corporations want to do as well as they can for themselves. But the key point is this:
It is not a law that they pay their employees as little as possible.
It is a choice.
It is indeed a choice, and a poor one. One thing I have noticed however,is that most of the people who think they have a responsibility to chastise me-live in a bubble of belief. Primarily they believe that nothing bad is going to happen to them, they are fine, and always will be. And furthermore, if anything bad does happen to someone else, its all that other person's fault for being unprepared. This arrogant attitude persists, even though they themselves are just one serious illness, or a layoff away from catastrophe themselves. Nor do they feel a responsibility to see the situation change. After all, "they give to charity". Which has zero to do with the central problem at hand.
If that is not hypocritical-I don't know what is.