By Robert Reich
Even
though French economist Thomas Piketty has made an air-tight case that we’re
heading toward levels of inequality not seen since the days of the
nineteenth-century robber barons, right-wing conservatives haven’t stopped
lying about what’s happening and what to do about it.
Herewith, the four
biggest right-wing lies about inequality, followed by the truth.
Lie number one: The rich and
CEOs are America’s job creators.
So
we dare not tax them.
The truth is the middle
class and poor are the job-creators through their purchases of goods and
services. If they don’t have enough purchasing power because they’re not
paid enough, companies won’t create more jobs and economy won’t grow.
We’ve endured the most
anemic recovery on record because most Americans don’t have enough money to get
the economy out of first gear. The economy is barely growing and real wages
continue to drop.
We keep having false dawns. An average of 200,000 jobs were created in
the United States over the last three months, but huge numbers of Americans
continue to drop out of the labor force.
Lie number two: People are paid
what they’re worth in the market.
So
we shouldn’t tamper with pay.
The facts contradict
this. CEOs who got 30 times the pay of typical workers forty years ago now
get 300 times their pay not because they’ve done such a great job but because
they control their compensation committees and their stock options have
ballooned.
Meanwhile, most
American workers earn less today than they did forty years ago, adjusted for
inflation, not because they’re working less hard now but because they don’t
have strong unions bargaining for them.
More than a third of
all workers in the private sector were unionized forty years ago; now, fewer
than 7
percent belong to a
union.
Lie number three: Anyone can
make it in America with enough guts, gumption, and intelligence.
So
we don’t need to do anything for poor and lower-middle class kids.
The truth is we do less
than nothing for poor and lower-middle class kids. Their schools
don’t have enough teachers or staff, their textbooks are outdated, they lack
science labs, their school buildings are falling apart.
We’re the only rich
nation to spend less educating poor kids than we do educating kids from wealthy
families.
All told, 42 percent of
children born to poor families will still be in poverty as adults – a higher
percent than in any other advanced nation.
Lie number four: Increasing the
minimum wage will result in fewer jobs.
So
we shouldn’t raise it.
In fact, studies show
that increases in the minimum wage put more money in the pockets of people who
will spend it – resulting in more jobs, and counteracting any negative
employment effects of an increase in the minimum.
Three of my colleagues
here at the University of California at Berkeley — Arindrajit Dube, T. William
Lester, and Michael Reich – have compared adjacent counties and communities
across the United States, some with higher minimum wages than others but
similar in every other way.
They found no loss of jobs in those with the
higher minimums.
The truth is, America’s
lurch toward widening inequality can be reversed. But doing so will require
bold political steps.
At the least, the rich
must pay higher taxes in order to pay for better-quality education for kids
from poor and middle-class families. Labor unions must be strengthened,
especially in lower-wage occupations, in order to give workers the bargaining
power they need to get better pay. And the minimum wage must be raised.
Don’t listen to the
right-wing lies about inequality. Know the truth, and act on it.
ROBERT B. REICH - Chancellor’s Professor of Public Policy at
the University of California at Berkeley and Senior Fellow at the Blum Center
for Developing Economies, was Secretary of Labor in the Clinton administration.
Time Magazine named him one of the ten most effective cabinet secretaries of
the twentieth century. He has written thirteen books, including the best
sellers “Aftershock" and “The Work of Nations." His latest,
"Beyond Outrage," is now out in paperback. He is also a founding
editor of the American Prospect magazine and chairman of Common Cause. His new
film, "Inequality for All," is now available on Netflix, iTunes, DVD,
and On Demand.