The news on income inequality is in: NPR reported this morning that the top 1 per cent of the richest Americans earned more than 20 per cent of all U.S. income in 2005.  And the IRS says these income figures surpass what the top earners made in the 1990s when our economy was booming.  This is to say nothing of the share of the country’s overall wealth that the top 1 per cent controls. 

The headline of yesterday’s Wall Street Journal article asked with the sense of puzzlement: “Why job market is sagging in the middle?”  Here’s their explanation: “Technology and globalization are eroding demand for workers who do routine tasks in factories and offices, many of whom are high-school or even college grads.”  Routine tasks–sounds second-rate, doesn’t it?  Sounds so much less exciting than being a hedge fund manager, or a lawyer, or a nanny to the rich—one of the many personal service occupations that is expected to flourish, fueled by the demand from the top earners in our society.

The truth is these “routine tasks” have sustained our economy and communities across the nation, fed families, and were a source of pride for many, who felt that they were working to be a part of the American dream.  Americans who knew that if they worked hard, they could own a home, have a middle-class standard of living, and give a solid foundation to their kids, who would be able to do anything they wanted to do in the future. 

For those of us who have been following what has happened to manufacturing in our country, this news about growing income inequality is no news at all.  For well over a decade, our manufacturing base has been steadily eroded by unfair competition from abroad and government policies that encourage U.S. companies to take production overseas. 

While consumers in many cases gained from the increased trade in their ability to consume more, that gain came with a cost.  It costs us in the quality and safety of the products that we purchase; it costs us in the loss of good-paying jobs, and the decline of communities that were supported by those jobs.  And it does cost us in the increasing inequality in our society.  America is becoming a nation of haves and have-nots, not a nation where every American can succeed regardless of where he or she has come from.

We can fight the rising inequality with income redistribution through the tax system.  But when was the last time a comprehensive tax reform that effectively redistributed the income from the rich to the poor was enacted in this country?

Neither is the wealth redistribution mechanism alone the best solution for income inequality.  For most Americans subsisting on a check received from the state is not a dignified way to live.  We were brought up with the idea that we work to make a better future for ourselves and our families.  American workers would rather be given the opportunity to make a life for themselves than simply be given a government hand-out

That is why it is crucial that we keep good-paying manufacturing jobs in the U.S.  We want to preserve the middle-class in this country to have confidence in the prosperity of our nation for years to come.  That and because not everyone wants to be a rich man’s butler.

This entry was posted on Friday, October 12th, 2007 at 1:54 am and is filed under Manufacturing in the U.S., Economic Security. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.