Nothing rankles quite so much as perceived unfairness. Yesterday at our day camp for inner-city kids, Xavier threw a fit because his classmate Marika was getting rides between our Family Center and the local school. Both children have asthma, and Xavier couldn’t comprehend why Marika should receive special treatment. It was difficult for him to understand that his asthma was not as serious as hers, that he was better able to make the trek on foot than was she.
There’s something very American about getting agitated over inequalities–after all, we proudly proclaim that “all men are created equal.” On the other hand, our love for freedom and opportunity legitimizes differences: most of us accept an economic system that rewards those who work harder or perform better.
In recent years, however, a significant number of opinion shapers–Robert Reich, during his tenure as Labor Secretary; the editors at the New York Times, Harper’s, the Atlantic Monthly, the American Prospect, and other elite journals; politicians such as Richard Gephardt and Pat Buchanan; economists such as Lester Thurow and Lawrence Mishel; and writers such as Michael Lind, Robert Frank, and Philip Cook–have asserted vigorously that today’s brand of American capitalism encourages an unacceptable degree of income inequality. These commentators argue that the gap between the rich and poor has grown at an alarming rate in recent years. They worry that middle-class Americans are so pinched by stagnating wages that they cannot afford the American dream. Mishel claims that middle-class family incomes stalled during the 1980s, and that between 1989 and 1993, median family incomes actually fell as hourly compensation declined. Union leader Ronald Blackmore asserts that “60 percent of families’ [incomes] have actually fallen . . . despite the fact that today workers are working longer hours than they ever have, the American worker is more productive than ever, and the country is richer than it ever has been.” Simply put, many commentators contend that middle- and lower-class families just aren’t “making it” any more. Some even argue that today’s families are actually worse off than their parents’ generation.
These writers and politicians complain that the robust picture of aggregate economic growth in the United States is misleading, because the rising tide isn’t lifting all boats. Instead, they claim, a few Americans–those with technical skills and many years of formal education–are capturing windfall gains as economic competition intensifies, technology advances at breakneck speed, and the American economy becomes globally enmeshed. Meanwhile, blue-collar workers and service sector employees are increasingly excluded from the economic pie as companies “outsource” manufacturing to cheaper labor in the Third World, enervate labor unions, and funnel ever greater proportions of corporate profits into CEO salaries and stock dividends instead of employee wages and benefits.
Concerns over CEO compensation have reached such heights that even the Wall Street Journal felt compelled to tackle the issue in a lengthy special section. There, author Joann Lublin wrote that “the earnings gap between executives at the very top of corporate America and the middle managers and workers has stretched into a vast chasm.” In 1994, she reported, the heads of 30 major corporations received compensation that was 212 times higher than the pay of the average American employee. This is a nearly fivefold increase since 1965, when the multiple was 44. To make matters even worse, commentators add, the same workers who have watched their wages fall face the additional stress of increasing job insecurity in the era of mergers and downsizing.
These analysts are glum about the future, too, arguing that without significant intervention, the disparity between the rich and poor will inevitably worsen. The reason, they explain, is that today’s inequality is rooted in differential educational achievement: highly educated citizens continue to make meteoric progress in income growth while high-school dropouts continue to fall ever further behind. In The Next American Nation, Michael Lind claims that as the rich and smart use their privilege of “legacy” to open the doors of elite universities to their children and grandchildren, we’ll witness an ever-increasing separation of the “overclass” from the rest of us.
This increasing separation between the classes fuels concern that growing economic disparities will have serious consequences on our nation’s economic, social, and political health. Some commentators predict that increasing income inequality will, over the long term, create a shortage of skilled laborers and increase inefficiency. Others worry about the political implications of inequality. Lester Thurow, the well-known mit economist and best-selling author, warns that “if capitalism does not deliver rising real wages in a period when the total economic pie is expanding, its hold on the political allegiance of the population will be threatened.” Richard Leone of the Twentieth Century Fund thinks this has already begun. “With a remarkable segment of the population losing ground in wealth and income,” he writes in the foreword to Edward Wolff’s recent study on inequality, Top Heavy, “the inevitably greater insecurity this group faces must be a root cause of the anger that is shaking the democratic system.”
Scholar Benjamin Schwarz warns of the grave social implications of rising inequality: “America’s post-industrial economy . . . has created a society at war with itself, in that one class dreads the very developments the other class embraces.” Currently, this “class war” manifests itself less in violent conflict than in quiet segregation. Lind, Reich, and other liberal commentators assert that a “neo-feudalism” has arisen in America. The “overclass” is “withdrawing into gated suburbs,” protected by private security guards who now outnumber public police officers. And rich citizens are providing for themselves what were previously considered “public goods”–schools, roads, and even utilities–through private homeowners’ associations. In the workplace, too, the rich and smart separate themselves from others. As Lind describes it, “Downtown office complexes resemble medieval castles–collections of towers connected by skyways and sealed off from the growing horde of the unemployable poor.”
The Wrong Conversation?
As someone who works among the urban poor, I must confess that my initial reaction to the inequality conversation is suspicion. Today’s discussion focuses our moral and intellectual energies on the issue of relative poverty when we ought to concern ourselves most with absolute poverty.
The way in which unemployment, for example, is discussed in the debate is troubling. Robert Reich has stated that he is less concerned about the quantity of jobs than about their quality. An author writing for The American Prospect concurs, arguing that America needs a more European-style economic policy that will reduce income inequality even though this will increase unemployment.
Obviously we would all like to see an increase in high-paying jobs. (There has been some good news on this front: according to a study in the Monthly Labor Review, most of the net increase in employment in the period 1992-93 occurred in jobs paying above-average wages.) Nonetheless, we shouldn’t completely disdain “low-wage, dead-end” jobs. After all, the poor person with such a job is usually better off than the poor person without one. The jobless bear a wrenching psychological, as well as economic, burden. Working in a dead-end, low-paying job at the very least gives someone something to do, something to get out of bed for, something to order one’s time. Work is part of the Creator’s plan, and it is good for the soul. Too many commentators are willing to put up with higher rates of unemployment if the policies that produce this unemployment shrink the gap between the earnings of top-tier and bottom-tier workers. But this prioritization is misguided. A growing gap between rich and poor is less morally troubling than is the entrenchment of our nation’s poorest citizens. High unemployment rates mean some families may face deepening poverty, and that’s a greater outrage than the relative differences in the earnings of, say, routine producers and upper management.
An emotive essay in U.S. News & World Report illustrates a second problem with this exclusive focus on relative poverty. Author Steven Roberts begins with a sympathetic discussion about Ken Bishop, a 48-year-old senior records clerk for AT&T. Bishop is ticked off because his income “is stuck” at $40,000. In this instance, Roberts clearly argues that $40,000 is not “good money,” since Bishop’s wife also works and still the family can’t manage its bills. At the end of the article, though, Roberts discusses Cynthia Pollard, who made $40,000 a year selling computers before she was laid off and had to go to work as a waitress. Before this setback, Pollard “wore suits and heels to work, lived in a tony Atlanta neighborhood and ate out often.” Here, Roberts communicates, $40,000 is pretty good money. A focus on relative poverty prevents us from determining just what income levels justify societal concern. Should we be dismayed that the Bishops “can’t make it” on $40,000-plus or should we be more concerned that Cynthia Pollard earns only $20,000 at her waitressing job?
(First of three parts; click here to read Part 2)
Copyright(c) 1997 by Christianity Today, Inc./Books and Culture Magazine. July/August, Vol. 3, No. 4, Page 3
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