How to Shrink Inequality in the US that lags behind Europe

A video titled Inequality for All features former Secretary of Labor Robert Reich making the point that inequality hurts the rich as well as the poor because a shrinking middle class has reduced purchasing power. He compared the Civil Rights Freedom Summer of 1964 to students who organized Wal-Mart workers for better wages than their $8 an hour average in the summer of 2014.[i] The Fight for $15 organization aims to influence politicians with the slogan “Come get our vote.” Also known as Fast Food Forward, it began in November 2012 when hundreds of fast food workers went on strike, spreading to over 200 cities in the US and other countries. It’s supported by the large Service Employees International Union and other groups like Black Lives Matter Portaland.

The largest labor movement in years, cities like Lost Angeles, Oakland, and San Francisco responded with minimum wage hikes and New York was the first state to require a $15 minimum wage for fast-food workers in chain restaurants. In 2016 California passed a $15 minimum wage to be phased in over six years.

By 2010 Americans were less likely than Europeans to favor capitalism’s free market economy. “Socialism” was the most searched word in an online dictionary in 2015,[ii] popularized by the Occupy movement and its criticism of the capitalist 1%, Bernie Sanders’ presidential campaign as a democratic socialist, and the re-election of Kshama Sawant, the socialist mayor of Seattle in 2015. Sanders’ democratic socialism is not anti-capitalist in that his models are not Marxist but the New Deal and Scandinavia. Young voters were more supportive of Sanders than his opponent Hillary Clinton and more likely to want a Democratic president than older voters. A USA TODAY/Rock the Vote poll of young people ages 18 to 34 in 2016 found they’re pragmatic rather than ideological, concerned about renewable energy (80%) and background checks for gun buyers. Another top issue for them is the economy and student debt.[iii] The Million Student March mobilized on over 125 university campuses in November 2015 and April 2016. They demanded free public education, cancellation of $1.3 trillion student debt, $15 minimum wage for campus employees, and divesting from private prison corporations. T-shirts read I am a student debt voter.org. To grow the shrinking middle-class also requires union growth, the wealthy to pay their fair share of taxes, and creating green jobs while building the decaying infrastructure.

The wealth gap is the widest in three decades in the US, the developed country with the highest rates of inequality and one of the lowest levels of social spending on programs like TANF, WIC and Earned Income Tax, according to the Economic Policy Institute.[iv] One in five US adults lives in or near poverty with almost 4.7 million dropping down to this level since the economic recession of 2008.[v] North America is the only region where the middle class doesn’t own its share and more of national wealth: 70% of the people own only 7% of the wealth.[vi] The richest 20 own more than the bottom half, so that the 1% owns as much wealth as 80% of Americans. Almost 62% of people ages 25 to 60 have suffered at least a year in poverty or near it; two-thirds of them are white.[vii] The increased rate of drug overdoses from heroin is driving up the death rate of young white adults, most of whom are not well-educated and struggle with poverty.[viii] A short documentary shows the actual life of a poor 15-year-old white mother in Missouri who lives in a single-mother family with seven children.[ix] Another documentary, Rich Hill (2014) tells the story of three impoverished white boys also in Missouri.

Families with the median household income have very little left over at the end of the month to save, so almost half of Americans own almost nothing, according to the Bureau of Labor Statistics. Reporter Nicholas Kristof reported that the US middle class is no longer the richest in the world, surpassed by Canada in median after-tax income.[x] In addition Canadians receive free health care and work fewer hours. Despite spending more per person than 10 other developed nations on health care, the US ranks last due to lack of access to primary care.[xi] Americans pay more for pharmaceuticals than any other advanced nation.

Nearly 16% of Americans in their mid-20s to mid-30s lived below the poverty line in 2013.[xii] People ages 18 to 24 are poorer than the same age group in 1990. In 2012, 20% of them were poor.[xiii] The rate of employed teens ages 16 to 19 sunk to the lowest rate since 1945, to in 2016.[xiv] The unemployment rate for 20 to 24-year-olds fell to 62%% in 2014 but pay stagnated over the previous decade. A youth advocacy group called the Young Invincibles reported in 2014 that 15% of people ages 16 to 24 were unemployed, not counting students and those too discouraged to look for work, compared with 7.3% overall.[xv] About 300 million more jobs will be needed to employ the young people entering the workforce in the next decade.

[i] Robert Reich, “Freedom Summer II, Robert Reich.org, May 31, 2014.

[ii] Inae Oh, “The Most-Searched Word of 2015 is ‘Socialism,’” Mother Jones, December 16, 2015.

http://www.motherjones.com/mojo/2015/12/2015s-bernie-sanders-socialism-merriam-webster

[iii] Susan Page and Paul Singer, “USA TODAY/Rock the Vote Poll,” USA TODAY, January 11, 2015.

http://www.usatoday.com/story/news/politics/elections/2016/01/11/poll-millennials-agenda-president-rock-the-vote-republican-trump-sanders-democrat/78556154/

[iv] Pierce Nahigyan, “8 Facts About American Inequality,” Counter Currents, October 21, 2014.

http://www.countercurrents.org/nahigyan211014.htm

[v] Jerome Roos, “One in Five US Adults Live In or Near Poverty,” ROAR Magazine, December 12, 2015.

https://roarmag.org/2015/12/12/implosion-us-middle-class-poverty/

[vi] Paul Bucheit, “2015 Wealth Data: U.S. Inequality at its Ugliest,” Common Dreams, October 19, 2015.

http://commondreams.org/views/2015/10/19/new-2015-wealth-data-us-inequality-its-ugliest

[vii] Neil Schoenherr, “Poverty Prospects Higher than Expected,” Washington University Newsroom, July 22, 2015.

http://news.wustl.edu/news/Pages/mark-rank-poverty-study-2015.aspx

[viii] Gina Kolata and Sarah Cohen, “Drug Overdoses Propel Rise in Mortality Rates of Young Whites,” New York Times, January 16, 2016.

http://mobile.nytimes.com/2016/01/17/science/drug-overdoses-propel-rise-in-mortality-rates-of-young-whites.html?_r=1

In 2014, 47,055 people died from overdoses.

[ix] http://www.nytimes.com/2014/01/22/opinion/sarahs-uncertain-path.html?nl=todaysheadlines&emc=edit_th_20140122&_r=0

[x] Nicholas Kristof, “It’s Now the Canadian Dream,” New York Times, May 14, 2014.

[xi] Dan Munro, “US Healthcare Ranked Dead Last Compared to 10 Other Countries,” Forbes, June 16, 2014.

http://www.forbes.com/sites/danmunro/2014/06/16/u-s-healthcare-ranked-dead-last-compared-to-10-other-countries/

[xii] Editorial Board, “Recovery for Whom?,” New York Times, April 12, 2014.

[xiii] Editorial Board, “Starting Out Behind,” New York Times, June 7, 2014.

[xiv] Richard Eskow, “Citi to Help Unemployed Youth?,” Huffington Post, April 11, 2014.

http://www.huffingtonpost.com/rj-eskow/citi-to-help-unemployed-y_b_5130517.html

Martha Ross, “Decoding Declines in Youth Unemployment,” Brookings Institution, June 1, 2016.

http://www.brookings.edu/blogs/the-avenue/posts/2016/06/01-declines-in-youth-employment-ross

[xv] Shaila Dewan, “In Jobless Youth, US is Said to Pay a High Price,” New York Times, January 6, 2014.

http://www.nytimes.com/2014/01/07/business/economy/in-jobless-youth-nation-is-said-to-pay-high-price.html

10 steps to increase equality in the US.

Robert Reich, “How to Shrink Inequality,” The Nation, May 6, 2014.  

 

Robert Reich updated the argument that the US is behind Europe and Canada, stating in 2014 that US disposable income after taxes is lower although Americans work longer hours (28% more than a German worker), they don’t live as long and the rate of infant mortality is higher, and Americans ages 16 to 24 rank near the bottom among rich countries in literacy.[i]

 

[i] Robert Reich, “The Perils of America’s Hard-Charging Capitalism,” The Sun, May 28, 2014.

http://www.baltimoresun.com/news/opinion/bal-the-perils-of-americas-hardcharging-capitalism-commentary-20140527,0,4967221.story

Robert Reich, “The Perils of America’s Hard-Charging Capitalism,” The Sun, May 28, 2014.

http://www.baltimoresun.com/news/opinion/bal-the-perils-of-americas-hardcharging-capitalism-commentary-20140527,0,4967221.story

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