16-50 Segment 1: Closing the Wage Gap

an empty wallet and a full of banknotes

 

The “Wage Gap” has been a persistent topic in America for years and it played a big role in determining the outcome of the recent election. We’re joined by two experts who both agree that closing the wage gap should be a top priority in this country, but who have very different takes on how that can be achieved. We talk governmental regulations, tax codes, charity, and much more in regards to bringing the haves and the have-nots together. Our experts say doing so may just bring a very divided country together before the wedge between the two groups changes America into a very different, and likely very worse-off, place for our children to inherit.

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Guests:

  • Chuck Collins, website editor for The Institute for Policy Studies and author of the book, Born on Third Base
  • Kyle Hauptman, executive director of the Main Street Growth Project

Links for more information:

 

The Wage Gap

Gary Price: During the recent campaign season we heard a lot about “the wage gap” and the 1% of the top of the wealth ladder. The next president will have his hands full, trying to reconcile these two groups, so that all Americans can make a living wage and pay their fair share of taxes. Our two guests have different ideas on how to boost the economy and level the playing field. First Chuck Collins, website editor for the Institute of Policy Studies and author of the book, Born on Third Base. Collins has a very interesting backstory. He was an heir to the Oscar-Meyer meat company fortune, but he gave it all away after seeing a group of not very well off residents of a mobile home park band together and spend every cent they had and help each other buy their park.

Collins: It sort of launched me on a process of saying, “you know maybe this wealth could be deployed in a better way,” and you know I’ve already have this debt free education maybe I’ll be fine without it. So I made the decision to give that wealth away at 26.

Gary Price: Collins sees the wage gap and the American economic system as two class wars being waged simultaneously.

Collins: There’s very much of a class war from the top down. You know, as Warren Buffet said, “there is a class war in America and my class is winning.” For 30 years real wages have been flat or falling for most people in this country. But there’s also a lot of resentment from the middle and the bottom up to the top, you know, hatred toward the wealthy or a sort of class antagonism. And I kind of argue in this book that, while that may be understandable, it actually isn’t gonna get us the kind of transformation we need because the wealthier are not monolithic and there’s large segment of people who are kind of waiting to be engaged and invited to be part of the solution.

Gary Price: He says that bringing people together of different income levels and getting to know them as people, not as bank accounts or ‘Us vs. Them’ can help engage the wealthy and the lower wage population to work to shrink the gap.

Collins: The 99%, we often organize to send our communities and work to build coalitions for fairness. But we shouldn’t forget that there are potential allies out there among the wealthy, and they may be in civic groups, and may be in near religious congregations, or they may be in a neighbourhood association – and these are people that should be engaged. You know, and some of them are distant and live behind walls and are not going to be easily reached, but the reality is there’s a lot of people who I think are waiting to be engaged and invited to social changes that we’re talking about.

Gary Price: Collins admits that wealth can change people. It can make them more distant and blind to the problems that the rest of society faces.

Collins: Someone like me who grew up in a wealthy family, I think we experience a fair amount of disconnection and distance from the rest of society. Even Michael Jordan, the basketball star, who as he became wealthy sort of recounted in his memoir how his world got smaller, how he grew afraid of people, how his sense of trust in the world diminished. I sort of feel like privilege and advantage can sometimes be like a disconnection drug, disconnecting us not from the just the suffering of the human experience but also the joy. So, that’s one of the things I write about, because I think that’s a barrier to addressing these problems of inequality.

Gary Price: Collins says that income inequality isn’t good for the wealthy either. He says that it’s bad for democracy to have a bunch of billionaires controlling the political system and it’s not healthy for a number of other reasons.

Collins: There’s a mountain of research showing that too much inequality actually destabilizes the economy. It actually slows growth and wealth creation, it’s bad for social cohesion, it’s bad for health, public health. So too much inequality now backfires on even the rich, and undermines the quality of life for everybody. So that’s one of the reasons I’m out there saying, “look one percenters, you don’t benefit from this actually. The direction we’re going in is we’re becoming sort of an economic apartheid society and that’s gonna undermine your quality life and certainly the quality of life for your children and grandchildren.”

Gary Price: Collins has some ideas on how to level the playing field and make the economy fairer for all.

Collins: After World War II,  1945-1977, we taxed high incomes and high levels of wealth very progressively and we invested it in expanding the middle class. We did that through debt free education, through very low interest loans for people to buy their first houses, we launched millions of families – mostly white families, on the wealth building train if you will. And, it’s very similar to what we can do today, we could restore the progressivity of the tax system and we can invest in infrastructure and the big fixes that would actually make a huge difference in our local lives, in our communities. All the people I know today that have student debt, $33,000 is the average amount of student debt, and in some states they’re taxing inheritances like in Washington state and funding debt free education. You know, there’s all kinds of things we can do to raise wages, raise the minimum wage – restaurant workers today are still paid a tipped minimum wage of $2.13 an hour, that’s like archaic from a previous generation. So there are simple things that we can do to raise the floor, but I argue we gotta address the concentration of wealth and power at the top.

Gary Price: Kyle Hauptman has a different take on reducing the wage gap. He’s the executive director of the Main Street Growth Project, a nonprofit/nonpartisan organization created to help communities and small businesses. He says there’s always been a wage gap and what’s important is equality of opportunity for all Americans. And that starts at the neighborhood level, with education.

Hauptman: We should pursue educational reform and have a market in education the way we do for college, where although it’s very expensive, American college education is quite good while K-12 is not. You see charter schools and private schools that have much less money than the public schooling, that manage to succeed. They don’t all, but many of them managed to succeed. And I think it’s important that we look at what works and pursue that. Give those poor parents the same thing the wealthy have, which is an opportunity to chose their own school and demand results when they’re not being served well.

Gary Price: He says that we also need the government, state and federal, to give small banks a break with fewer regulations so they can help small businesses grow and thrive.

Hauptman: Starting new businesses is the most important thing. You show me an area where there’s a lot of new businesses being created and that is an area of opportunity and economic growth. And we’ve piled a lot of regulation on small banks, like community banks, they’re the one that disproportionately give loans to small business. Meanwhile, the big companies have no problem getting capital, they can either issue bonds or they have bankers pick up their phone call on one ring, you know. But the little guy is getting squeezed out, I think we have a lot of policy reform including financial reform that would help a lot.

Gary Price: The tax code is another place where Hauptman thinks we can make changes. He says it’s way too complicated and that means people will hire tax preparers to help them find loopholes and pay less tax. Another place where we should be making changes and helping out small business people is with corporate taxes, which Hauptman says, has champions on both sides of the political aisle.

Hauptman: The fact that the US corporate tax rate of 35 is too high is something that a lot of democrats and virtually all republicans have agreed on, so there’s the possibility there. Canada is much lower, Sweden, the UK – they’ve all lowered their corporate tax rate, even Japan has – they used to be just as high as us.

Gary Price: Hauptman says that in a way the system is rigged toward the ‘haves’ to the detriment of the ‘have nots.’ He suggests that governments dial back on regulations surrounding businesses.

Hauptman: You need regulation, you need government. But when government gets more and more involved in who can set up a business, who can export, who can hire  — it tends to favor the ‘haves’ because they’re sitting at the table when they decide regulations. The more governments involved in things, the more those who have a seat at the table are gonna try to craft those rules to benefit themselves.

Gary Price: Finally, Hauptman says we have to do a better job of getting people back to work so they have a chance at the American dream and all it holds for them. He says that making it easier to start a small business is one of the pathways to realizing that dream.

Hauptman: The main success is earning your own success; it doesn’t have to be striking it rich with the next Facebook. It can be that you go to work everyday and support your family, and there are a lot of people in this country that would take that right now. Somebody in prison sure would, somebody unemployed sure would, someone underemployed who is on public benefits who doesn’t want to be – if they could go out and earn their own success and make their own way in this country and pay their bills there’s a happiness and a pride that comes in that. So, I think we wanna be a place where it’s easy to start a business, not because everyone is going to be an entrepreneur, but because when you take a boarded up building on Main street that is sitting there empty, maybe attracting vagrants, and you replace that with opportunity that helps a lot of people. It helps the town, it helps the tax revenue, it helps the people who might work there even if they’re minimum wage jobs, it helps the people who may use that service – it benefits a lot of people.

Gary Price: If we don’t do something about the wage gap now, what will our country look like in the next decades? Both Collins and Hauptman say it will likely be a different America than we have today.

Collins: Essentially we are heading to becoming  kind of racial and economic apartheid society. If wealth continues to concentrate as it has the last 30 years then we’re essentially moving to becoming a hereditary aristocracy of wealth. Meaning, we’re gonna be a society that’s governed by the sons and daughters of today’s billionaires. They will dominate our politics; they will dominate our media and our culture. But we’re essentially moving toward a society where we’ll be governed by the super wealthy and I think we’ll also see a kind of racial economic apartheid because of the fact that assets for blacks and Latinos have been stagnant or actually failing, that the divide will become great along racial lines.

Hauptman: We might wind up looking a bit like more like some of the Western European countries, meaning that they are still by and large prosperous and they haven’t descended into poverty. It could be Italy, it’s a nice place to visit and has a group of well off people who do pretty well, but very little economic mobility and less a place that is a shining city on a hill. I think you and I are proud of the fact that many people around the world, if they said you could get out of the country you’re in and you could go some places else, I think the United States would be the number one place that they want to go to. It certainly has been throughout history. The United States has assimilated more immigrants than any society on earth and we want to be that, I think, because that means we’re doing something right.

Gary Price: You can read up on how one man left the 1% to help those in the lowest part of the 99% in Chuck Collins book, Born on Third Base, available now in stores and online at chelseagreen.com.

You can find out more about the Main Street Growth Project and Kyle Hauptman on their website at mainstgrowth.com.

For more information on all of our guests, log on to our site at viewpointsonline.net. You can find archives of past programs there and on iTunes and Stitcher. I’m Gary Price.

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