Capitalism, when working well, realizes that better paid workers benefit everyone. But the current crop of wealthy Americans aren't likely to give in on that point

economic inequalityEconomic inequality has become a buzzword. A talking point. It’s no simple issue, and the sort of topic that makes the average person’s eyes glaze over. Nick Hanauer splashed cold water on this with his recently released article, warning the rich that “pitchforks are coming for us.” He laid bare the essential problems of today’s economic policies. Go read it if you haven’t. Hanauer made eye-opening points which deserve a deeper look.

Have you ever been poor? Do you know what it’s actually like? Not “broke” but poor. You don’t have any money. Not just now, but always. What you do have must be spent on the absolute necessities. Food. Rent. Transit. These days, phones and Internet are fast approaching “must have” categories as well.

But you don’t go to the movies. You don’t eat at restaurants. You can’t travel. You can barely buy any gifts, let alone expensive ones. You cannot contribute to your local economy, let alone the national one. You are probably not politically engaged because you are too focused on not sinking too deeply that day.

Have you ever been rich? Flush with cash? Great isn’t it? You can buy multiple homes and cars, a plane, whatever you wish. Travel wherever you like. You never have to cook unless you feel like it and then you can pay someone else to clean up after you. You are making more, thousands of times over, than the next guy. You are one of the lucky few.

But even though it’s a lot for one person, are you making up for what your economy loses from everyone else? Sure you might own three cars, but do you own 1,000? No. You will buy what you want and what you need and you’ll sit on the rest. Maybe find ways to send it offshore so you get your taxes lowered. That’s your money after all. Nobody else’s. So what if that doesn’t help the economy?

This isn’t economic balance. It’s inequality, and it’s dooming the American economic system. People need to get by in life, yes, but if they have more money to enjoy, you will build a healthy and active economy. You will still have rich people and, yes, poor people, but the gross divide that exists today will be lessened.

“The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle. The fastest-growing big city in America? Seattle.”

Mismanaged Capitalism has brought the USA to it’s current economic state. One family, the Waltons, are worth as much as almost half of all Americans. Their employees at their plethora of Wal-Mart outlets are barely paid a living wage, and rely on government assistance for buying food and making their rent.

Historically, as Hanauer expounds upon, this kind of inequality always brings about social upheaval. Revolutions. Civil war. And why? When you get right down to it, past the bluster about “having foresight” (getting lucky) and “pedigrees” (born into money), the main reason we have the plutocrats and oligarchs of today’s .01% is greed. Unfortunately, this is the component of capitalism that nobody likes to talk about, that greed is its foundation. Unfettered, it leads to disaster, like in 2008.

“The oldest and most important conflict in human societies is the battle over the concentration of wealth and power. The folks like us at the top have always told those at the bottom that our respective positions are righteous and good for all. Historically, we called that divine right. Today we have trickle-down economics.”

Here’s the thing about trickle-down economics, it works just fine. As long as you’re not part of the 99% in America. The idea behind the concept is that wealth “trickles down” to the lowest of the economic rungs. But that “bottom” isn’t anywhere in the USA. It’s in India. It’s in China. It’s in all the countries the American rich have been exporting jobs to.

Wages and living conditions have been skyrocketing in other countries, as long as you ignore how bleak it is compared to what Americans enjoy, child labor, and the odd factory explosion/collapse/mass deaths thing. Trickle-down is working, somewhat, on a global scale, not a national one like we were told it would. In terms of the planet, America is the 1%. Scarier, the 1% of America is also the 1% of the entire world.

economic inequalityTrickle-down economics do little to help most Americans. Many live paycheck to paycheck, if they’re even lucky enough to do that. They are burdened with student loan debt while they work at McDonalds or Wal-Mart. As ever, the rich get richer and the poor get poorer.

“The standard response in the minimum-wage debate, made by Republicans and their business backers and plenty of Democrats as well, is that raising the minimum wage costs jobs. Businesses will have to lay off workers. This argument reflects the orthodox economics that most people had in college. If you took Econ 101, then you literally were taught that if wages go up, employment must go down. The law of supply and demand and all that.

Because here’s an odd thing. During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo. CEOs used to earn 30 times the median wage; now they rake in 500 times.

Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before. So, too, for financial services workers and technology workers. These folks earn multiples of the median wage, yet we somehow have more and more of them.”

If workers have more money, then businesses take in more money. Rich people do not create a rich economy, they benefit from it. Neither are the rich “job creators” as they like to call themselves. True job creators are the middle class, and the the healthier that segment of Americans are, the healthier the nation’s economy. They are the source of American prosperity. And the rich are created from, and by, the middle class.

Opponents of raising the living wage have that backwards. A diminished middle class means diminished opportunities for all Americans. You need education. You need employment opportunities. You need jobs that pay you enough to pay back into the economy. Ignorance is preventing this at many turns, and it’s proving dearly expensive for everyone.

Capitalism, when working well, realizes that better paid workers are better for everyone. But the current crop of wealthy Americans aren’t likely to give in on that point. They would rather drive the nation into the ground and in 2008 they nearly succeeded. The government bailed them out at the expense of, wait for it, everyone who wasn’t the 1%.

That should have been enough of a warning shot to the uber-rich, but we are currently heading that way yet again. The assumption seems to be that all the rest of us will just go ahead and bail them out again, no matter how unlikely. That kind of ignorance is far too expensive.

When you’re King of the Mountain, you aren’t giving that position up for anyone. You will fight like Hell to stay on top. You will be lauded for it. That’s The American Dream, after all. If you have to cheat to win, stab others in the back, and tank the economy, then so be it. But why? Why would the 1% ruin the economy, get bailed out, and seem happy to try and keep it tanked?

Greed. That’s why. Hence Mr. Hanauer’s warning about the pitchforks.

That’s great for you that you made it rich folks, but the rest of us would at least like a fighting chance. It seems that the rich are not only blocking the ladders we need to climb, but they’re pulling those same ladders up after themselves once they reach the top.Nobody really expects to crack the ceiling of the 99% anymore.

Americans want to work and want to be rewarded for it. Equal opportunities. Just rewards for work. The ability to contribute to the economy, and enjoy that we can do for ourselves and our children like our parents and grandparents before us could do. It’s fair to say most people want this, no matter what side of the aisle they’re on.

economic inequalityThe majority of us don’t want food stamps, or government assistance, and sure as Hell don’t want to be called “welfare queens.”

Those exhorting such rhetoric really need to shut up now, we’re sick of you. Many of us who need that assistance were not put in that situation by choice. You are only rubbing salt in our open wounds. You are infuriating us with your expensive ignorance.

Stop obstructing. Get constructing. A better living wage is as good a place to start as any. That’s not too much to ask.


Chad R. MacDonald has a degree in English literature from Cape Breton University and subsequently received a full scholarship to AMDA in New York City. He is a former security professional, veteran of the hospitality industry, and experienced in both the arts as well as administration.He has been writing all his life, likes baseball, hockey, literature, science, the arts, and marine photography.Chad lives in Brooklyn with his wife and son and their gigantic cat.


  1. While I certainly understand the desire of many to raise the minimum wage, I don’t think it is the correct approach. We need to focus on creating a maximum wage — let’s say 30X the median wage at any corporation. We need to focus on closing tax breaks that almost solely benefit the very wealthiest. We need to tax capital gains from stock options at the same rate as ordinary income rather than a flat 15%. Measures such as these will encourage corporations to pay higher salaries because upper management will also benefit by being able to increase their maximum allowable pay.

  2. Thomas Piketty’s book has just arrived at my library, so I start the long wade tomorrow.

    In the meantime I’ve been watching the discussions on TV, YouTube and on the Net — and I see Piketty conducting himself with extraordinary style, good sense and integrity.

    It was particularly interesting to see him on Charlie Rose: Rose is usually a very fair and high-minded man, but confronted with Piketty he tried and tried and tried to make him say something stupid — right down to becoming the most common of journalists with really stupid attempts to put words in Piketty’s mouth. It was scary to watch because of course English is not Piketty’s native language, I don’t know whether it’s his second or his eighth, and one was afraid he might fall for it out of unfamiliarity with the North American game. He didn’t. Whew!

    The fine Brad DeLong (“as in de long run”) has one of the array of reasonable comments at the excellent Center for Equitable Growth.


  3. In America today exists a situation so obvious yet unseen by many…the ultra-wealthy devouring out of sheer greed every thing in their path, including the very planet itself! In the meantime the poorest of the poor sacrifice themselves to a highly unjust prison industry just to exist at all. Sorry but this is exactly the way I see it.

  4. Here is an example of what the 1% is doing in Oregon by the highest office of government!!

    Oregon’s former A.G. Dave Frohnmayer is preventing me getting employed, made me homeless! Put a lien on my fully paid Condo, and sold it.

    He is charging $550.00 an hour and his law firm Harragn, Long, Gary, Rudnick the D.A. of Lane County, the City Attorney, and the University of Oregon too!!

    Frohnmayer has committed more fraudulent crimes than any elected or non-elected official!,3369919

    All the Lane County government are complicit with him!!

    I hope & pray the FBI will investigate Frohnmayer soon!

    Please sign both petitions.

    And this one with Causes too. Thanks!

Leave a Comment