A Bold, New World View, Part 8- Combatting the Pro-Growth Economy’s Misery

Read Part 1 here.

Read Part 2 here.

Read Part 3 here.

Read Part 4 here.

Read Part 5 here.

Read Part 6 here.

Read Part 7 here.

There are two words that should never have been applied to human beings- efficiency and productivity. The dehumanization of labor, the push for more for less, is literally killing us as a people. You get more education, you work around the clock, you give more and more for your job, and what do you get? Not pensions and health benefits, plenty of student debt, less vacation time, and less general satisfaction. We’re productivity vessels at this point, trained to produce efficiently and without much in guarantee for a return.

There are three essential problems in our economy right now. Two are very macro, one is a microeconomics issue that touches almost everyone. These problems exist even in a thirty-five year plus era of stock market growth, GDP growth, and relative prosperity. As I see them, the three biggest problems in our economy are:

  1. Too much of the wealth and rewards of our economy are flowing to the top of the economy, or as Marx would put it, capital over labor.
  2. Dishonesty and deregulation of our economy has eliminated the safety and certainty in our market for the middle and working class in America.
  3. American labor is being devalued, the relationship between workers and their employers is increasingly imbalanced, and the constant pressures of our labor is doing real harm to our happiness in our home life. The social contract that we would offer our labor in exchange for meeting our needs is increasingly not being honored.

It is important to understand these are not random things that just “happened,” but rather the result of policy changes, both public and private that put us here. The destruction of labor unions in America made it easier to exploit American workers. Companies dropping defined benefit pensions in favor of 401K’s helped make retirement less and less secure. Letting the payroll tax fall further and further behind in funding Social Security and Medicare was a policy choice. Letting the minimum wage lapse further and further behind, getting rid of windfall tax brackets, de-fanging the SEC and other regulatory agencies and boards, and using state and local governments to guarantee financing for the wealthy’s projects are all just some of the examples of policy choices made that guaranteed growth for the rich, but did nothing for the certainty of the rest of America. We got to the three main problems I cited above because of these policy choices.

If policy decisions are causing the problems, then obviously it will take different policies to change them. What would those policies look like? How would they be different than the status quo? Here’s my thoughts on what they should be-

  • Progressive income tax reform that adds brackets at the top, protects earned income at the bottom of earnings, discourages inequality, and prioritizes the needs of middle income earners. Imagine if the tax code protected your first $30,000 from taxation, rather than the new yacht you bought with your ten millionth? Imagine a multi-millionaire/windfall bracket? Imagine less loopholes, but more write-offs for middle income families? It could be done, and probably without even “soaking” the rich.
  • Corporate taxes that incentivize “good” behavior, instead of bad. What if the tax code didn’t reward out-sourcing? What if the tax code did reward companies for providing health benefits and pensions, allowing unionization, and paid sick leave? What if the tax code rewarded companies for being environmentally friendly? What if it penalized companies for paying below a livable wage? What the tax code incentivized or penalized is just a matter of the choices made by the people writing it.
  • Ending the risk of financial ruin because of health costs. There has been a lot of debate over the best way to achieve universal health care. It’s important that we remember the fundamental problem with American health care- people can’t afford the services. It’s not the quality of the care, or even the cost of the annual check up. It’s the catastrophic costs, the cost of pharmaceuticals, and the cost of chronic health issues. Expanding Medicare to cover all prescription drug coverage, while also giving the program the ability to negotiate costs down would dramatically lower the cost of pharma. Expanding Medicaid to cover catastrophic and long-term, chronic condition care for everyone would eliminate the fear of bankruptcy for middle-class and low-income Americans.
  • Raising the ceiling on payroll taxes to fund Medicare and Social Security. When Ronald Reagan signed the last major overhaul on the payroll tax, the tax covered 90% of all earnings. The current cap on payroll taxes is $128,400, or about a quarter of what 90% of earnings would be today. If we just went back to 90%, let alone raising the cap to $1 million, or eliminating the cap, any and all issues Medicare and Social Security currently have with sustainability. In fact, we could make Social Security a true retirement for all Americans and lower the Medicare eligibility age to cover almost all middle-aged Americans now.
  • Bring back the 40 hour work week, or should I say OVERTIME. Americans are working longer and harder than ever before, but making less and less real dollars for their increased productivity. “Living to work” is not a healthy condition for anyone. Your parents may tell you working harder is better, but the truth is that it’s not how you should live your life. Re-instituting to 40 hour work week means incentivizing vacation time for all workers and bringing back overtime for ALL workers. When you work beyond 40 hours, you should be paid at an increased rate for that extra worker. This should be as true for salary jobs as hourly. Americans shouldn’t be on a 24 hour clock at work, constantly check their work e-mails, without being compensated for such. Yes, we would lose some efficiency in our economy, and yes it might take more workers to match our productivity- but that’s the point. Human beings need off time. They also should earn more for work beyond the standard.
  • End the war on drugs, mass incarceration, and “the box.” Who gets hurt by the “war on drugs” and mass incarceration the most? Poor people. Not because they’re the worst people, but because they’re the “most policed” people, and can’t afford the best defense. So we arrest them, throw them in prison, make the taxpayers pay for them, and then what? When they get out of prison, we make it very difficult for them to find work and become productive. We create a condition of poverty that turns poor people towards black market crime, then incarcerate them, then make them check a box on job applications after prison that hurts their chances of getting work. Turning away from the “war on drugs” and mass incarceration to start would help ease this economic trap. “Banning the box” and other ways to ease re-entry to society is also needed.
  • Index the minimum wage to inflation. The federal minimum wage was last increased in 2007. Things don’t cost what they did then. The minimum wage should be a living wage. It should also be indexed to both the region or state you are in, and inflation. Take the politics out of it and insure people can make a living.
  • Make union organizing easier and simpler. There has been a fall in real dollar earnings for working class Americans that follows closely to the decline of organized labor in America. It’s time to end that. Stop allowing management to interfere with labor organizing, intimidate workers, and avoid unionization in any field of work. Institute card-check, so workers can easily and freely organize a union.

If we made even some of these reforms, we would both improve quality of life, and happiness in our work force. We would insure people who work can live without fear of economic ruin. We would lower stress and anxiety levels in the public. We would see better outcomes across society. By the way, we’d still be a remarkably rich country. Consumption would rise, our economy would grow. Perhaps efficiency and productivity would take a hit, and economic benefit would be more spread out. What’s wrong with that though?

2 thoughts on “A Bold, New World View, Part 8- Combatting the Pro-Growth Economy’s Misery

  1. Pingback: A Bold, New World View, Part 9- Of Class and Identity | Rags to Rich’s

  2. Pingback: A Bold, New World View, Part 11- Regionalism Still Matters | Rags to Rich’s

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