The gilded age in American history was a period of enormous economic expansion as well as unprecedented income inequality and poverty. Out of this calamity came the Progressive era in American politics, arguably the most transformative political movement in this nation’s history. Women’s suffrage, the income tax, the direct election of U.S. Senators, the rise of worker’s unions, the secret ballot, referendums—all lasting reforms from then that made this nation more democratic while building the foundation for a middle class. We saw whistle blowers and activists creating organizations like the NAACP and Planned Parenthood. Government and corporate misconduct and corruption were reined in and snuffed out. Monopolies and Trusts were busted and regulated to benefit consumers and business alike. The few decades all of this happened under were in direct response to the economic and social injustice of the gilded age. We today are in the second gilded age.
We have the highest income inequality of any developed nation. 47% of this nation’s wealth goes to the top 10% of earners since the recession. 24% goes to the top 1% of earners. That is the worst income distribution since the government started keeping track in 1912. The ability of the poor to rise in economic circumstance is at comparable lows. Corporations are sitting on trillions in cash for the simple fact that they have nowhere to expand locally because of inadequate demand. Despite our corporate tax rate of 35%, the effective corporate tax rate is closer to 13% because of loopholes. The tax burden on the American people is at its lowest level in 50 years, particularly for our wealthiest citizens. And during the past 30 years of this massive shift in wealth to a small portion of the population, the majority of middle class incomes have stagnated and dipped.
We are continuing to slash needed public expenditures despite the fact that the deficit is rapidly shrinking. The federal stimulus money was the only engine keeping us from rolling back into another recession, but now those funds are largely dried up. There is no demand to support the robust economic recovery we truly need to replenish the coffers of our desperately needed social services and safety nets, let alone infrastructural investment.
This nation is better when its economy functions more fairly and equally. It isn’t socialism; it isn’t rewarding the jobless or punishing entrepreneurship. It’s basic economics. When the majority of our population can’t afford the basic necessities let alone American made goods without financing through enormous debt, we decline.
And as we have this wage stagnation, lack of new jobs, and explosion of household debt, we have to listen to the gall of corporations or pundits complaining of taxation or pressure to support better wages even as their CEO’s and shareholders rake in huge sums and bonuses. Of course these wealthy individuals and corporations contribute massive sums to charity and to our tax base, but this is because they control most of the wealth. Peter Buffet put it well in the New York Times when he said that our plutocratic nature of wealth and trickle down is creating a “charitable industrial complex”; a perpetual poverty machine dependent on our ultra rich that holds things in place just enough without fixing much.
Excessive wealth needs to be scrutinized with policy for the public good. How much money does one really need to win the game of life? It is possible to be quite wealthy and sustain a corporate workforce that isn’t living on poverty wage and subsidized by federal aid. The 6 members of the Walton family who own most of Wal-Mart have a combined total of 70 billion in assets, more than the bottom 30% of America combined. The average full-time worker at Wal-Mart makes about $13 per hour. Wal-Mart’s competitor Costco pays its employees an average of $21 per hour with vastly superior benefits in healthcare and bonuses. And the owner of Costco is at a worth of about 2 billion in assets—poor guy. Costco has higher growth than Wal-Mart does, lower employee turnover, and better customer satisfaction. My point is that it’s quite possible for large corporations to pay their workers middle class wages and be filthy rich in the process. Maximizing profit just for Wall Street stockholders while neglecting workers isn’t the best business model these days, and it shouldn’t be socially acceptable.
$7.25 an hour is not a living wage. Thousands of fast food workers went on strike this summer demanding higher wages. One model developed shows that if McDonald’s workers earned $15.00 per hour, the Big Mac would cost a mere 68 cents more to consumers. Another demonstrated by a group of 100 economists shows how a $10.50 wage would force a laughable 5 cent rise in the sandwich. I understand the push from small businesses that are scraping by to resist the minimum wage increase; our most burdensome regulations aimed at big business are subverted and passed onto small businesses. But big profitable giants can afford to give their workers better. The increased economic activity, tax revenue, and better societal structure that sustainable higher wages for workers across the board has far outweighs the non-proportional inflation that might be incurred in the process.
This nation is at its peak when its inequality in wealth is lowest and our social mobility is highest, when we educate ourselves and build things as a public. There is a healthy level of inequality that still has our most entrepreneurial citizens living like kings. Being American and living the American dream is more than just thumping your chest with a rifle and yelling “freedom!” like it’s an embodiment of Braveheart. It’s more than taking your cap off and singing the national anthem. Having an advanced economy and high wages compared to the third world shouldn’t be an excuse for chastising the middle and working class for striving to betterment. Individualism as a part of our culture doesn’t need to be a free-for-all of apathy towards our fellow citizens.
The most successful waves of change are not tumultuous revolutions, but sustained campaigns of popular reform much like during the Progressive era. The catalyst for this change is the day-to-day dissatisfaction with the status quo. Things have to be so bad that they induce widespread political support for change. Such happened with the gilded age, and so the Great Depression as well as the Great Recession. Momentum for change fades when the chaos subsides. But as the status quo and economic stagnation for the middle class drag on in this second gilded age, one hopes that the political momentum to usher in the new era of progress we need comes faster. Gerrymandering and misinformation won’t stop the unrest that builds from the rusting of the American dream and the success that closely follows it. We need to actually invest in the American people. The options for such investment are innumerable for both the private and public sector. The return on that investment is immeasurable for everyone.