The words “income inequality”—and on a related note, “economic mobility —are on the lips of leaders of both major parties. President Obama is expected to make the issue the key theme of his State of the Union speech; Republican star player Marco Rubio recently made a major speech on the issue, following up on Paul Ryan’s absurd attempts to rebrand himself as another “compassionate conservative” deeply concerned about the plight of the poor.
The contours of the debate are more or less set: Democrats plan to center their push around raising the minimum wage, while Republicans champion tax-cuts, eliminating various regulations, and reinforcing their old hobby horse: deriding “dependency” to promote measures adding work requirements to social programs, and refusing to extend unemployment benefits for the unemployed.
The bipartisan agreement around the need to tackle inequality, lack of mobility and poverty reflects one clear trend, that the political elites—fronting for the capitalist ruling class—are very concerned about the (correct) perception that the U.S. is run by a tiny group of super-rich people jealously holding on to their advantages in wealth and status. This perception is reinforced by the knowledge that hard work is no guarantee of even a decent standard of living, much less the path to the tiny club of capitalists on the top of the mountain.
Many mainstream media outlets have expressed some surprise that, in the words of the New York Times, “income inequality has taken on unanticipated prominence” at the beginning of election season. The capitalist political establishment, on the contrary, is fully aware that the social stability of the system is still at significant risk, despite the reams of paper, large chunks of bandwidth, and hours of television time currently being taken up by “experts” proclaiming a return to health for the economy. The view among the vast majority ranges from outright disbelief to a view that the “recovery” is purely for the rich. In other words, whatever its past validity, the American Dream is now a myth.
Politics to protect the rich
This is not terribly surprising given that the situation on the ground clearly belies the rhetoric of a return to economic health. Take unemployment for example. It is easy enough to show what seems to be a significant drop in “official” unemployment, and as some have put it “steady hiring across a wide range of sectors,” but when you look at the more meaningful employment-to-population ratio, it has not significantly changed in the past three years. This is a sign that growth in employment isn’t keeping pace with growth in population. This means that despite so-called job “growth” the actual percentage of the population employed hasn’t really budged at all.
Add to this the fact that particular subsets of the population (young people, Blacks) face even higher rates of unemployment than the national averages, and with similar trends breaking out regionally it is really no wonder that for many people “recovery” is not a term they apply to their own situation.
The two capitalist political parties see this issue in two ways. On one hand, they recognize clear majority support for things such as a higher minimum wage and recognize that perhaps the only political issues that have any broad bi-partisan relevance involve helping large numbers of people out of poverty. The obvious corollary is that an easy way to gain credibility with much of the voting public is to present oneself as a warrior in the fight against poverty.
Second, and more important, the rise outside of the electoral arena of movements against poverty and for greater economic equality are harbingers of a greater upheaval. From Occupy—which injected inequality into the political conversation—to the recent fast food workers strikes and actions aimed at WalMart, have garnered significant public attention despite their relatively modest scale. Given that the media too is a business, the fact that significant page and screen time is given to relatively small-scale movements is a clear sign that significant numbers of people have at least a passive interest in movements aimed at reducing the effects of capitalist exploitation.
For the two major parties this is a serious issue. First of it threatens their monopoly on political power, as the election of socialist Kshama Sawant in Seattle shows.Complete political bankruptcy can sooner-or-later return to bite you at the polls. Second, it threatens broader systemic stability as the rise of movements outside of the formal political process start to infringe on the rights and prerogatives of the very rich and spill over into tests of strength between the forces of the government and the forces on the street.
Rising street protests and a proliferation of third parties, even hard-to-control internal party tendencies are a recipe for eroding the ability of the two major parties, backed by big business, to shape and control the country through the political process.
Not even close to a solution
The turn towards inequality as a partisan issue, then, is a continuation of the basic role of elections as a legitimizer of the capitalist system, one that allegedly presents a choice to voters about the direction of the country. It’s obvious from the low approval ratings of Congress and the President, not to mention the limited number of people who vote, that the two major parties are struggling for legitimacy. So they have turned the 2014 election into a faux-referendum on the one issue that matters to just about everyone: their standard of living.
That being said, the proposed solutions on both sides of the aisle are clearly inadequate. For their part the Democrats are centering their push on raising the minimum wage to around $10. While in the most general sense it is positive for working people at the lowest end of the scale to have their wages increased, for many this is woefully inadequate.
Take Chicago for instance. For a single person with no kids, the proposed Democratic minimum wage of $10.10 would be about 30 cents short of a “living wage.” If that same person was the sole supporter of one child that $10 and ten cents wouldn’t even be half of a living wage.
The same trend plays out in just about every locality in every state, and given that 28 percent of low-wage workers have children and the majority is at least of child-bearing age, even at $10 an hour having a family actually becomes a luxury.
Republicans are even more cynical. Based on Marco Rubio’s speech we can infer that the Republicans are proposing a few basic ideas. One would be to make “welfare” programs a state not federal responsibility. This would obviously lead to massive cuts to these programs given that not only do states have fewer resources, but just about every state requires a so-called “balanced budget” which means either cuts or significant tax increases to meet the shifting needs of many of these programs. Given today’s political climate it isn’t difficult to figure out which one of these is more likely.
Second, more stringent “work requirements” for safety net programs will just force people into the first low-wage job that comes around, and given that even Republicans continually deride the lack of “economic mobility” it isn’t even remotely clear how this would decrease poverty.
Republicans are also proposing some tax breaks for the very poor, but this is balanced by eliminating the Earned Income Tax Credit which heavily benefits working people on the lowest ends of the wage scale. Further it ignores the fact that the social safety net programs like SNAP that Republicans want to cut are based on careful calculations of living standards. The tax break approach just gives a set cash voucher to the poorest people, with which they then, in drastically different regional and personal circumstances, have to stretch to meet their needs most likely sacrificing some for others.
It’s about the system not the symptom
In a way the inadequacy of the major parties approach to income inequality and poverty is a secondary question. In the debate as defined by bourgeois media and politics, income inequality is a seemingly independent variable not intrinsically connected to how capitalism is currently constructed.
In fact the rise of income inequality is intimately connected to the past 30 years of capitalism an era that has become known as “neoliberalism.” In short the increasing “globalization” of capital often under the guise of “free trade” created the twin issues of factories that have “run away” to other nations in search of lower wages and thus higher profits, while the disruption of traditional national economies by this “free trade” (as well as anti-communist wars) ushered in an era of mass immigration around the world creating massively increased labor competition in “core” countries like the United States, again resulting in a general lowering of the wage level. These issues are also exacerbated by the phenomenon of high-tech/low pay and the growth of the low paid service sector at the expense of the well-paid manufacturing jobs.
The adjustments demanded of workers in the United States have required competition both between nations, and even between states and localities as working people are told by their politicians that in order to attract jobs they “must” accept lower wages and massive corporate tax giveaways. This can be seen in the recent Washington state Boeing workers’ re-vote to accept a contract that had previously been roundly rejected.
In other words income inequality is the result of a massive one-sided class war against the living standards of working people by the rich and their bought-and-paid for government officials.
Seen from this perspective the problem with the major proposals from both parties isn’t that they are inadequate per se, but that they do nothing to arrest the actual trends that cause income inequality. Both parties remain committed to this general direction as seen from the more or less uniform support for a raft of new free trade deals, lower corporate taxes and plenty of corporate welfare, a Federal Reserve cheap-money-for-banks-policy, rationing medical care and pensions for the elderly—just to name a few things.
So while they propose policy remedies that will, allegedly, take just a little bit of the sting out of the massive flow of wealth to a small group of people, they propose nothing that will in any serious way stop the massive flow of wealth to a small group of people, rather perpetuating the framework of inequality if, maybe, reducing its scope just a little.
Working people under attack: Stand up, fight back!
A different strategy is needed for working people looking to live a decent life, not just a dollar or two above the poverty line. The key issue in striking a blow against the poverty (or near-poverty )economy is labor rights.
The key ingredient in the strength of corporation’s vis-à-vis workers is their ability to blackmail and cajole. Their ability to threaten workers with the shifting of a factory to a non-union state, or use the precarious position of their job to argue that there is someone “just waiting” to be hired if they don’t agree to poverty wages, greatly strengthens the power of the bosses.
Additionally, laws that limit union organizing or strikes, mean working people fight with one (or two) hands tied behind their backs. It is fairly simple. Businesses, big business in particular, have huge amounts of organized power, from bought-and-paid for elections, favorable media coverage, trade associations with tens of millions of dollars in resources, just to name a few particular advantages.
The key to opposing this massive corporate power is for working people to get together and organize, particularly at work, which is where the corporations make their profits, and thus where they are most vulnerable to disruption. If they choose to withdraw their labor, workers can make sure the trains and planes don’t run; ships don’t get unloaded; clothes and Big Macs don’t get sold; in other words the more united workers are, the more power they have to shut down the capitalist profit machine at its very heart. Literally, working people have their finger on the “start/stop” button of capitalist society.
If 2014 is truly to be the year where inequality is fought, it will be fought most effectively by strengthening the hand of labor vs. capital. A proliferation and escalation of organizing and strikes among low-wage workers, and head-on attacks against anti-union laws can go a long way to combat not just income inequality itself, but the forces that reproduce and reinforce it.
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