Thursday, April 7, 2016

Minimum Facts

Low minimum wages and gender inequality are both bad for the overall U.S. economic picture, according to the International Monetary Fund. But those are two aspects of income inequality that are clearly a dividing line between Republicans and Democrats.
The GOP claims that lower-paid workers will simply lose their jobs and entry-level employees opportunities as companies, unable to meet rising minimum wage requirements at the state level, will go out of business… and that women’s familial priorities are more responsible for gender wage disparity than any overt discrimination. Anything that increases the cost of doing business remains an anathema to the Republican Party.
Dems point to a statistical glass ceiling where women performing the same level services as men generate 21% less in pay and where an increase in minimum wages will provide lots of money in the pockets of buyers ready to boost the consumer-driven economy accordingly. Meanwhile, corporations are enjoying record profits, and their major shareholders are laughing all the way to the bank.
The IMF seems to think the Dems’ position is a no-brainer. “The U.S. should increase the federal minimum wage, expand a key tax credit for low-income workers and enact more ‘family-friendly’ policies if it wants to boost the economy, Christine Lagarde, the managing director of the International Monetary Fund, said [April 5th].
“The IMF, an international organization responsible for ensuring global economic stability, has now recommended several times that the U.S. raise the federal minimum wage… The federal minimum hourly wage has been at $7.25 since 2009. It’s now 19 percent lower than it was in 1980 after adjusting for inflation.
“In the U.S., the years following the financial crisis have been a period of uneven economic growth — a recovery that to many people hasn’t felt like one. The wage proposal is one of many potential remedies that Congress has refused to enact into law. The U.S. also is the world’s only developed country that doesn’t guarantee paid time off for new mothers… ‘It is no wonder that perceptions abound that the cards are stacked against the common man — and woman — in favor of elites,’ Lagarde said.
“The IMF views these measures as necessary if the U.S. is to do its part to expand the global economy by 2 percent this year… The organization has previously urged U.S. policymakers to spend more on infrastructure — think crumbling roads and bridges — and education. The policies could also help reduce inequality.
“While the U.S. economy has been expanding by roughly 2 percent annually since the end of the Great Recession, many experts reckon that the rich have disproportionately benefited as low- and middle-income Americans increasingly fall behind.” Huffington Post, April 5th.
While the economy is growing, most Americans (supported by most global economists) feel that the level of growth is too slow, that it benefits the wealthiest classes far and away beyond any other segment of our society and that they will have to settle for a quality of life that falls short of what their parents enjoyed.
It is precisely this level of dissatisfaction that has given rise to the populist cries of Bernie Sanders on the left and Donald Trump on the right. Both factions are built on the notion that life in the United States seems to moving our future economic world in entirely the wrong direction. Trump blames a bloated federal bureaucracy with too many concessions to immigrants and international pressures just as Sanders blames Wall Street and the preferences they have extracted from the government.
Both parties need to address the need to level the playing field to reestablish hope and upward mobility to our economy. Carried interest rules, favorable capital gains treatment, off-shore shelters (even as the government fights companies’ relocating overseas to avoid taxes) and giant loopholes (carefully lobbied into existence) and regulation-exempt industries are just part of the litany of playing field tilts that favor the one-percenters. And whether you yearn for making “America great again” or “leveling the playing field against Wall Street preferences” or are one of those in the vast political middle, the overall message is simple: the United States is rapidly slipping into becoming a highly polarized plutocracy… and it is one of the worst-kept secrets on earth.
I’m Peter Dekom, and unless we fight to restore balancing and fight against increasing polarization at every level, we run the risk of losing our long-standing democracy.

No comments: