Skip to comments.5 Ways the Liberal Obsession With Income Inequality Hurts the Poor
Posted on 01/04/2014 4:32:59 AM PST by Kaslin
After the last century, it shouldn't even be controversial to assert that the more a nation focuses on income inequality, the more it hurts the poor. After all, there have been whole societies formed around the slogan Marx popularized, "From each according to his ability, to each according to his need" -- and they've universally been lousy places to be poor. Would you rather be poor in America or Cuba, Vietnam or the old Soviet Union? If the question doesn't answer itself, P.J. O'Rourke's quotation about traveling to the Soviet Union with a gang of Communists should answer it for you, "These were people who believed everything about the Soviet Union was perfect, but they were bringing their own toilet paper." Meanwhile, we live in a world where China has seen tremendous economic growth by embracing some of the capitalistic policies that made America a superpower while the Democrats are embracing some of the policies that led to hundreds of millions of Chinese living in huts on less than a dollar a day.
Getting beyond that, shouldn't there be massive income inequality between someone with rare skills who works 70 hours a week and an unskilled part time worker? Most people say "yes" and even liberals who talk obsessively about income inequality behave as if there should be a difference. Do you see Michael Moore, Barack Obama, or Al Gore refusing to work for more than $20 an hour because they want to show solidarity with poor workers? No, they believe they deserve their money, but those "other people" should have more of their money taken away for the common good. If a CEO should have his pay limited, why shouldn't Michael Moore make $20 an hour? If Barack Obama thinks fast food workers are so vitally important to the economy, why doesn't he reduce his salary to the point where he only makes as much as they do? If Al Gore really believes in fighting income inequality, why doesn't he refuse to make more than the guy who spends 8 hours a day saying, "Welcome to Wal-Mart?"
The truth is that income inequality is of minimal importance in a nation like America, where so many people already move between classes, where the poor are doing so much better than they used to, and where our poor already do so well compared to the rest of the world. "Among children from families in the bottom fifth of the income distribution, 84 percent of those who go on to get a college degree will escape the bottom fifth, and 19 percent will make it all the way to the top fifth." During the Great Depression, more than 60% of Americans were living below the poverty line. Over the last 50 years, that number has generally ranged between 12%-15% -- and even that dramatically overstates the number of poor Americans because it doesn't take into account government assistance that's being paid out. On top of all that, liberals get so angry when people point out that more than 80% of poor Americans have cell phones, televisions and refrigerators while "most Americans living below the official poverty line also own a motor vehicle and have more living space than the average European." Yet, they don't take into account the fact that almost half of the world's population still lives on less than $2.50 a day. In other words, if you are poor, you can live better and have more opportunity to advance in America than you will anywhere else. That's why immigrants all across the world still want to come to this country.
What liberals don't realize or alternately, just don't care about, is that their obsession with income inequality may make them feel good, but it actually hurts the poor in a number of ways.
1) The higher the government mandated minimum wage/living wage, the more people it prices out of jobs: When you force businesses to pay people more than they can return in value with their work, companies tend to respond either by hiring better quality people, replacing the jobs with automation, moving the posts overseas or by looking for opportunities to get rid of the positions entirely. The higher the wages and benefits the government insists on, the more stagnant it makes the labor market for the people who need to build their skills the most. If your goal were to deliberately put as many young, unskilled single mothers out of work as possible, the best politically feasible way to do it would be to jack the minimum wage up into the stratosphere.
2) It emphasizes making people more comfortable, not helping them succeed: There is no shame in taking any honest job, but you're not supposed to make a living pressing the button that drops the fries into the grease at McDonald's. If you work long enough at an entry level job to worry about raising the minimum wage, you're failing your family, your society and yourself. Instead of encouraging minimum skill workers to demand that the government force businesses to give them more money than they're currently worth, we should be encouraging people to build their skills and move up, move on or start their own business. Want poor people to be eligible for more education or training? Want to give them micro-loans? Want to make it easier for them to create small businesses? Those are policies that make poor Americans more valuable. That's good for them and the country. On the other hand, trying to redistribute income ultimately brings everyone down, especially the poor Americans who lose their drive after becoming dependent on it.
3) The more government becomes involved, the more it stagnates the economy: As John F. Kennedy said, "A rising tide lifts all boats." The stronger the economy is, the more jobs it creates and the more everyone -- poor, middle-class, or rich -- benefits. How do you make the economy stronger? You keep the government small, taxes low, and regulations light. That's a proven formula that has worked time and time again. On the other hand, if you want to constipate the economy, you make the government bigger, increase taxes and pour on the regulations. How did that latter set of "solutions" work out for Detroit?
4) The more the government focuses on income inequality, the harder it is to get ahead: As Thomas Sowell likes to say, "There are no solutions; there are only trade-offs." You can see this very clearly with Obamacare, where a few people are getting subsidized care, while tens of millions more are losing their health care and paying considerably more to make up for it. It works the same way with income inequality. Want to make Wal-Mart pay all its employees twice as much? Then that means all the poor Americans who shop at Wal-Mart will have to spend more of their limited incomes to pay for it. Want to give more tax dollars to the poor? Then the rich and middle class will have to pay more in taxes. So, the moment that poor American is making enough money to get into the middle class, he's hit with a bigger tax bill that makes it harder for him to ever get ahead. In other words, the more resources we put into "helping" the poor, the harder we ultimately make it for those very same people to ever permanently escape poverty and live the American Dream.
5) It ignores the real causes of poverty: The real causes of lasting poverty in America are not greed, the rich, racism, America being "unfair," or any of the other excuses that you hear so often. Instead, the harsh truth that so many people don't want to hear is that if you stay poor in America, it's usually because you made bad life choices. Via Walter Williams, here's what you have to do in order to avoid poverty in America.
"Complete high school; get a job, any kind of a job; get married before having children; and be a law-abiding citizen. Among both black and white Americans so described, the poverty rate is in the single digits."
Instead of lying to destitute Americans and telling them that the rich became wealthy by stealing the money that the poor never had in the first place, why not tell people the truth? Yes, it might make some poor Americans feel bad, but do you think welfare, food stamps, and living in a housing project do wonders for people's moods?
#2 would be the biggest one. If people are protected from the consequences of poverty, they don’t try to improve so they can lift themselves out.
Take two farmers in the U.S, who live next to each other, and two farmers in the USSR, who also live next to each other. In each case, one farmer gets a new cow and the other doesn't. In the U.S., the neighbor farmer would praise the cow and aspire to get one for himself. In Russia, the neighbor would hope his neighbor's new cow dies!
Historically, the only examples of income equality have been societies with universal poverty.
Those who complain about “inequality” never mention how much Oprah or Mick Jagger earn or how little their stage help is paid. Nor do will they seem to care that Seattle Mariners second baseman Robinson Cano just signed a contract worth $240 million, nor that over 40 university presidents have pay packages that exceed $1 million. So who exactly are they complaining about? Times up: they only complain about business leaders who earn a lot of money. Now why would that be?
In 2012 the CEO of Walmart made $20.7 million. People who complain about income inequality imply he is a paraiste and gets paid at the expense of his workers, some of whom do not make much money. But the CEO’s job is to make sure Walmart is economically sustainable so that as many people have jobs as possible. His pay amounts to about a half cent per hour, certainly less than those employees would pay in dues to a union. Compare that to how much per hour government levies in taxes and tell me which party is a parasite and which party grows the economy.
But let’s take a different tack: the fact that people like J.K. Rowling can earn so much indicates how powerful and valuable a good idea can be in the free marketplace. Never in human history has any private citizen been able to do what Rowling has done, or Oprah or Mick Jagger or a host of other people. Today, nothing stops anyone from developing a good story for publication, nor someone from writing good software, nor holding a concert that millions want to attend.
And when they do, they don’t make anyone poor by becoming wealthy.
“Income inequality” joins Peak Oil and Global Warming as frauds of the left that are really aimed at advancing ideological agendas rather than advancing prosperity and liberty.
The answer to ‘inequality’ is not thinly veiled coveting of the wealth of prosperous people, but to encourage every person to rise to their highest potential as a human. Above all, we must never confuse our worth as human beings with money, which is the mistake made by many.
This “income inequality” currently being parroted by the Democrat Party is simply a propaganda tool, a sound bite being used as a last-ditch effort to remain relevant.
Naturally the American media is being the Democrat lapdog in helping with this effort.
In many cases it isn’t what people earn; it’s what they do with what they earn.
Income redistribution is the ultimate leftist wet dream. It is at the core of all their other schemes, such as global warming.
They want to be in charge of all the money and decide who gets how much.
If you’re black, female, homo or some other favored class, you are lead to believe you’re on the receiving end.
If you’re white and doing well, prepare to pay.
The fact is, its nothing more than a scam that enriches and empowers the re distributors...the BIG GOVERNMENT MASTERS.
So called income redistribution is nothing more than TRICKLE DOWN BIG GOVERNMENT.
This is exactly right. It’s not how much you make; it’s how much you end up with. Poor and broke are not the same thing. The lack of money is temporary. It’s what you do when their is no money that matters. Most poor people stay poor because they continue to do what makes them poor. Rich people are rich because they continue to do what makes them rich.
Yes, of course, it’s false rhetoric, but the American people for generations have embraced false rhetoric and will continue to do so.
Nobody in their right mind wants to pay a Starbucks barista and a brain surgeon the same thing. But it is true that the USA was healthier economically, more prosperous and faster growing in the 1950s and 1960s when the income curve, or pyramid, whatever, was flatter than it is now. In 1960, a corporate CEO only made about 40 times as much as the guy on the shop floor, now he makes 400 times as much. And income distribution wasn’t nearly so lopsided (i.e. crowded at the top of the pyramid) back in those days as it is now. That’s the problem.
America's rise from axes and hoes to men on the moon, and from a population of wilderness immigrants fleeing religious oppression to a place of refuge and wealth for hundreds of millions, occurred as a result of rebellion against government planning, taxation, control and regulation--not from a forced equality among persons resulting from some self-described group of so-called "progressives" who catered to the wealthy, as long as those "wealthy" ones would pay for their political power grab.
What hypocrisy they exhibit!!
They have turned upside-down the principles which made America a place of opportunity, creativity, prosperity and freedom, and now they decry the result of their coercive actions as a new rallying cry for more destruction--calling it income inequality.
The number one cause of poverty is unweb births and divorce. But, don’t expect Obama to promote real marriage. Liberals create the crises, and then use it as a straw dog to promote an evil solution (socialism).
Unfortunately, government interference doesn’t make it any better. Makes it worse.
“Unfortunately, government interference doesnt make it any better. Makes it worse.”
1: It’s not the government’s job to promote ‘income equality.’ Not according to the Constitution.
2: Prove that it was the government that did it. Back up your claims.
And 3: Why is income inequality, in itself, such a bad thing in the first place?
Income inequality, like anything else in life, is fine in moderation. Like I said before, you don’t want to pay the barista the same wage as the brain surgeon. But never in 100 years have we had so much income concentrated into so few hands. That’s a receipe for revolution, and not necessarily the kind we want.
I would argue that the #1 cause of poverty is gov’t handouts (welfare, SNAP, Medicaid/Medicare, etc.) and massive regulation.
New report debunks narrative on income inequality
The Latest News on Tax Fairness-top 20%’s share up, everyone else’s share down over last 30 years
If fairness in paying taxes means the amount you pay is based on the amount you make, then the only group in America paying at least a “fair share” is the top 20%people who make more than $74,000. For everyone else, the tax code is a bargain.
I would posit that what is harmful is not a large ratio between the 99th percentile and 1st percentile, but rather the existence of an excessively large ratio between any two consecutive percentiles or fractions thereof. I would consider a distribution in which the top person's has 1,000 times as much as someone at the bottom of the 99th percentile (who is still better than 99% of the population), who in turns has only twice as much as the bottom, to be regarded as far more dangerously skewed than one in which each percentile has 1.2 times the wealth of the one below, even though the latter would have an 82,000,000:1 ratio between the top and bottom percentiles while the former would only have a 2,000:1 ratio.
Obama and other leftists would prefer the former distribution (with themselves and their cronies being in the wealthy-elite group); conservatives would prefer the latter.