Facing a Growing Divide in America

Perhaps I am a bit of a European-style socialist, although I’ve not thought of myself as such. I’m not that comfortable being pigeonholed. I actually agree with and/or find merit in quite a bit of what the ”other side”, the conservative right, is arguing in this discussion, this controversy over minimum wage increases. I am rather open-minded and willing to listen to the arguments.

The core issue to me though is not as clear as it seems to most conservatives. I am unconvinced that applying economic theory alone outside the context of sociological and behavioral considerations is the best response of government to those who are at the bottom of the wage scale. I certainly do not support an increase in the minimum wage for what might be called “feel good” political strategy.

I sense that solely thinking in a supply/demand free market way about minimum wages is simplistic and unrealistic, although I do agree that this works well at the micro level and does bring about efficiency and fairness. Left to run its course, it becomes a “game” in which some win because they know the rules and play well and others lose because they don’t know the rules and play poorly. Certainly the incentives and disincentives of “invisible hand” economics play a large part in the success of economies and in individual success.

But I take a broader point of view, that although this game does play out in one dimension of our society, there are other important dimensions that need attention if we as a society are to enjoy a higher quality of life.

I also think there are philosophical questions that should be addressed that are outside the realm of economic theory and equations. One relevant here is how should we respond to a class of our citizens who work fairly and honestly for wages, but those wages only allow a below poverty income. And this despite the rather significant wealth of the community at large. It seems naïve to expect that an employer would always pay a living wage. And it may be the proper duty to one’s stockholders for an employer to maximize the discounted net value of his company by paying the lowest wage the market will bear.

As we move further into the new world order, the international economy, we realize that as Anne Lynam Goddard, the new president of the Christian Children’s Fund recently stated, “Three billion people live in poverty around the world. And half of them are children.” To take free market theory to the extreme and eliminate all trade barriers, and restraint to free movement of goods and labor, would, I’d guess, result in a substantial increase in worldwide total wealth, but I think it would certainly depress the relative standard of living of America’s middle, and lower classes.

Thus moves to pure free markets have, to me, to be seen in the context of the reality in which we live.

There is a growing chasm between the wealthy and the middle class in America – this is well documented. Real growth in middle class incomes has stagnated recently, also well documented. And the top few percent of the wealthiest are doing extremely well. These are changes that will have consequences to the fabric of America and I would hope that this could be addressed sensibly and rationally and sooner rather than later. Conversations on boards such as this could be part of the process of facing this reality, and I believe conservative leaning and liberal leaning Americans must come to the same table and work together to face this squarely as we have successfully faced common issues in the past.


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