November 28, 2011

The New Inequality

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Accusations of inequality have been unfairly thrown around these past few months by both sides of the political spectrum. The small, but loud, minority has hijacked the inequality debate.On the extreme left, we have those who believe that the American political and economic system only rewards the rich and punishes the poor and that this injustice is the root of all inequality. They are called the It’s-All-Their-Faulters. They believe their personal financial malaise is solely caused by actions of the elite, and in order to fix the immovable unemployment rates we have now, the inequality gap must be closed immediately and permanently. For them, all guilt lies with the Wall Street executives. These individuals have been turned into caricatures of the Occupy Wall Street movement.On the extreme right, we have those who believe the Occupy Wall Street protesters — and those who share their beliefs — are lazy, uneducated Marxists. These are the Nobody-To-Blame-But-Themselvesers. In their minds, had these unemployed bums leeching off federal subsidies gone to college or chosen to study economics instead of interior design, they would be employed. For the Nobody-To-Blame-But-Themselvesers, the inequality gap is no one’s fault but the jobless and the poor.  But neither side is completely right.For the It’s-All-Their-Faulters, inequality isn’t the loathsome beast they see it to be. It is a necessary byproduct of meritocracy and is the very substance that fuels the American Dream — seeing the one percent succeed pushes the 99 percent to strive for higher earnings. And the Nobody-To-Blame-But-Themselvesers aren’t entirely correct either. Income disparity in the United States has grown in the past three decades thanks to runaway bonuses and has been exacerbated by a mortgage crisis caused in part by weak financial regulation.The right way to look at inequality lies with the people in the middle: the We’re-All-In-This-Togetherers. These are the individuals who realize that inequality is an unavoidable reality of capitalism, but at least everyone — rich and poor — diligently works to keep it under control because it may doom us all.But this understanding of inequality is looking more like a relic of the past. There used to be an implicit understanding woven into the social contract that said whatever happened to the economy of this nation, good or bad, would affect all its citizens equally. It would be in everyone’s best interests to be fiscally responsible, in order to avoid the financial catastrophe we’re in now and to strive to secure the country’s future. No income bracket could afford to ignore the others. The poor needed the rich for employment and the rich needed the poor for labor. So naturally, workers were given adequate salaries and health plans or else the bosses would risk loss of productivity.But stakes in each other’s futures didn’t stop there. It was also in the elite’s best interests to pay their taxes in order to invest in the country’s highways, local roads, schools, public transportation and public universities. They needed their workers, present and future, to be smart, healthy and efficient.  A few decades ago, this country was a ship and all its citizens were passengers, sinking or floating together.   Unfortunately, that communal notion isn’t true anymore because the elite are no longer passengers on this ship. The destinies of the American poor and rich are no longer intertwined. Inequality, once anathema to both sides, is now tolerable to the rich. The current income gap isn’t just a difference in earnings — it has become a physical manifestation sheltering the upper class.If potholes suddenly pockmark the roads of their neighborhoods or their school systems suddenly face severe budget cuts, the rich can afford to pack up and leave for gated communities with lower crime rates where their kids can attend private schools.If state schools or community colleges lose their government funding, the rich can move their kids to private universities. Of the top 146 universities, just 3 percent of students are from the lowest income quartile and 74 percent come from the top quartile income bracket.If American workers have insufficient  skills or excessive demands, corporations can simply outsource labor to elsewhere on the globe, hitting lower income brackets the hardest. In 2009, families making more than $150,000 only had an unemployment rate of 3.2 percent. For families making less than $12,499, the unemployment rate was a stunning 30.8 percent. And for those making $12,500 to $20,000, it remained a soaring 19.1 percent.Nowadays, once you’ve managed to climb to the top of the socioeconomic hierarchy, you kick down the ladder so no one else can follow in your footsteps.So what do we need to do to restore the American community? Do we listen to the It’s-All-Their-Faulters by raising taxes on the rich? Or do we listen to the Nobody-To-Blame-But-Themselvesers by cutting our social safety nets?We listen to neither. Instead, we need to listen to the ones in the middle — the We’re-All-In-This-Togetherers. According to the advice of Harvard professor Michael Sandel, we must raise taxes on those who can afford it, but rather than using this revenue to expand our social safety nets, we need to invest back into our country’s infrastructure in order to bring together the rich and poor again. Let’s pour the money back into our public education system, our roads, our bridges, our highways, our universities, our libraries, our buses and subways, our parks and our science research.Once upon an American history, the citizens of this nation realized that no one could become successful and remain there by his own effort. Let’s remind ourselves of those times.Steven Zhang is a senior in the College of Arts and Sciences. He may be reached at The Bigger Picture appears alternate Tuesdays this semester.

Original Author: Steven Zhang