Published:
Monday, Oct. 21, 2013
Our Declaration of Independence states that “all men are created
equal.” Over the years, Americans have removed many barriers to that
great aspiration – with the Fourteenth Amendment, the vote for women, the civil rights
acts, public education and more.
But since the late 1970s, the United States slowly has become the
most unequal of the world’s developed nations in its distribution of
income and wealth. Our middle class is shrinking.
A new film, “Inequality for All,” hopes to bring attention to this. The protagonist is the passionate Robert Reich, an economics professor at the University of California, Berkeley,
and a former labor secretary during the Clinton administration.
The timing certainly is right for a clear explanation of what has
happened economically to the middle class in the last 30 years, and the impact
it is having on our democracy. All to the good if it can begin a spirited
conversation to consider remedies.
The most stark visual in the film is a suspension bridge, not unlike the Golden Gate Bridge. One tower is 1928; the other is 2007.
These are the peak years of income inequality in
the United States.
In both cases, we had economic crashes the year after the peak – and
recovery took concerted action. Change did not come alone through market forces.
The most stark fact in the film is that the typical male worker in
2010 earned $33,751; in 1978, he earned $48,302, in inflation-adjusted dollars.
This stagnation of middle class incomes, Reich points out, has
been masked by families becoming two-earner households, working longer hours
(300 hours a year more than Europeans), usingcredit cards and tapping their homes as ATM machines. But with the bursting of the housing bubble, the mask has been lifted: “All
of the coping mechanisms of flat wages for 30 years are now exhausted.”
And a new report released last Tuesday by the UC
Berkeley Labor Center points out more than half of fast-food workers – at
places such as McDonald’s, Subway, Burger King and Wendy’s – working 40
or more hours per week are enrolled in public assistance programs to cover
basic needs of food, rent and health care. That costs all of us.
Those at the top, however, have fared better. And if you think
that’s all to the good, think again.
Nick Hanauer, a Seattle
pillow manufacturer and venture capitalist, points out in the film that the
rich can buy only so many pillows and jeans. They invest some in companies
creating jobs, but a lot goes to “funds of funds” –
financiers financing other financiers instead of real industries.
That helps to explain why inequality is widening even as the
economy is growing.
So what is the solution? Reich believes we should emulate the United States
of the three decades after World War II.
That was a time when education was a national priority, including
higher education. Presidents Franklin D. Roosevelt and Harry S. Truman championed large-scale investments to
assure greater access. And states contributed, too.
It was a time of investment in infrastructure, such as the
interstate highway system.
And, Reich points out, it was a time when more than one-third of
workers belonged to labor unions that ensured that workers got a piece of productivity gains. As companies are designed to make
profits, we need some countervailing force to look after the American worker.
All this led to a cycle of economic growth, greater tax revenues, more government spending, a
better educated populace – a cycle that fed on itself.
Can this generation summon the political will to advance the
aspiration of the Declaration of Independence? We should not stand by as our
“land of opportunity” fails to meet that promise.
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