Conservative solutions to inequality are a mish-mash of contradictory messages, but at their core is a consistent theme: punish the losers. Progressives must counter that theme with: build a better game. (More)

Inequality and ‘The Greater Good’ Part III: A Better Game (Non-Cynical Saturday)

This week Morning Feature considers the conservative argument that rising inequality serves the greater good by fostering work, innovation, and growth. Thursday we saw how the right have twisted President John Kennedy’s phrase “a rising tide lifts all boats.” Yesterday we saw how models predict that even a growing economy can leave most people behind, and evidence that rising inequality both caused the Great Recession and undermined the recovery. Today we conclude with proposals to enable more innovators and broaden the benefits of growth.

“It teaches work ethic”

Sarah Palin doesn’t think progressives should care about fast-food workers, or that fast-food workers should earn a living wage:

We believe – wait, I thought fast food joints – don’t you guys think that they’re like of the devil or something? Liberals, you want to send those evil employees who would dare work at a fast food joint that you just don’t believe in – I don’t know, I thought you wanted to send them to purgatory or something. So they all go vegan. And wages and picket lines, I don’t know, they’re not often discussed in purgatory are they? I don’t know, why are you even worried about fast food wages? Well, we believe – an America where minimum wage jobs, they’re not lifetime gigs, they’re stepping stones to sustainable wages. It teaches work ethic.

Talking Points Memo justifiably described that as “word salad,” but it does highlight the right wing view of the working poor. The Ayn Rand Institute’s Don Martin offered this take back in May:

A few weeks ago I was listening to the Dave Ramsey radio show and I heard him take a call from a young man who was struggling with a low-paying job and two kids he had to support all on his own. I was impressed with Dave’s advice.

Dave counseled the caller on a few short-term things he could do to try to improve his situation, but stressed that over the long term he had to get his income up. Above all, Dave said, the young man had to become a reader: he had to spend less time watching TV and more time acquiring the knowledge necessary to make his services worth more on the job market. Dave even sent him a box full of books to get him started.
The simple fact is that in America today, even with all of the government barriers to success, you can make something of yourself regardless of where you start. No one is trapped in a low-paying job. No, I’m not saying it’s necessarily your fault if you only earn $7.25 an hour. What I am saying is that even if it’s not your fault, becoming successful is your responsibility. No one can or should do it for you. The world doesn’t owe any of us a living.

If you’re earning a below-living wage, the right-wing thinking goes, then that’s what you deserve … unless you make yourself worth more.

“Educate yourself”

Martin then quoted this 2007 analysis by “personal finance guru” J.D. Roth:

  • Work two jobs. If debt or living expenses are keeping you down, take a second job.[…]
  • Seek a promotion. Find a way to advance in your current job.[…]
  • Change companies. If there’s no path to higher income at your current job, what about a similar job with another company?[…]
  • Change professions. You may need to leave your current field altogether.[…]
  • Steer clear of corporate giants. As a small business owner, I’m biased against big corporations. Publicly held companies have huge motivations to keep worker wages and benefits low.[…]
  • Educate yourself. Finally – and most importantly – do what you can to increase your education and marketability. Make yourself appealing to employers. Develop skills that they can use.

Roth goes on to write at some length, citing 2007 data on the wage gap between high school- and college-educated workers. He recommends community college, taking only practical classes (no philosophy or creative writing), and building contact networks with faculty and other students. And if you still can’t find a way up, he cautions, “you may need to look inward.”

“What a snob”

In fact big chains pay better than small retailers, because they have more of those supervisory positions Roth says minimum wage workers should seek. But that quibble aside, many conservatives disagree with his claim that education is the path out of poverty. When President Obama urged all high school students to graduate and get additional education, then-presidential candidate Rick Santorum said this:

President Obama once said he wants everybody in America to go to college. What a snob. Not all folks are gifted in the same way. Some people have incredible gifts with their hands…there are good decent men and women who go out and work hard every day and put their skills to test that aren’t taught by some liberal college professor trying to indoctrinate them. Oh, I understand why he wants you to go to college. He wants to remake you in his image. I want to create jobs so people can remake their children into their image, not his.

That was partly a right-wing knee-jerk reaction to anything President Obama proposes. But not entirely. Reagan-era Secretary of Education William Bennett wrote a book asking Is College Worth It?, arguing that “too many people are going to college.” In fact, of the over 3500 U.S. colleges and universities, Bennett says only 150 are worth the cost:

He found college is “worth it” if you get into a top tier university like Stanford, or study an in-demand field like nuclear engineering at even a lower tier school.

The problem, Bennett says, is people going to second-tier schools, majoring in less-marketable liberal arts fields, and taking on debt to do so.

As for what could turn around what some have called a student debt “bubble” in this country, Bennett has some ideas. They don’t involve changes to government policy or a massive overhaul of how colleges do business. They may involve tears and parents’ basements.

“Mainly, we’d have a lot of frustrated, over-educated people”

Harold Kuttner, co-founder of the progressive American Prospect, agrees that higher education is not the solution to inequality:

To hear a lot of economists tell the story, the remedy is mostly education. It’s true that better-educated people command higher earnings. But it’s also the case that the relative premium paid to college graduates has been declining in recent years.

If everyone in America got a PhD, the job market would not be transformed. Mainly, we’d have a lot of frustrated, over-educated people.

The current period of widening inequality, after all, is one during which more and more Americans have been going to college. Conversely, the era of broadly distributed prosperity in the three decades after World War II was a time when many in the blue-collar middle class hadn’t graduated from high school.

I’m not disparaging education – it’s good for both the economy and the society to have a well-educated population. But the sources of equality and prosperity mainly lie elsewhere.

And education doesn’t benefit everyone equally:

Meet Steve and Kwame, two fictional guys who just graduated from the University of Maryland. Almost everything about them is weirdly identical – they majored in the same subject, they got the same grades in college, they have the same bullet points on their resumes – but Kwame is African American and Steve is white. Now, they’re both spending their post-pomp-and-circumstance summer looking for jobs. Do they have the same employment prospects?

A recent report from the advocacy group Young Invincibles suggests not: African American millennial men need two or more levels of education to have the same employment prospects as their white peers. White male college graduates have a 97.6% employment rate. Black male college graduates have a 92.8% employment rate – which correlates more closely with the job prospects for white men who have some college education but no degree (92.5%).

“To sort out the best and the brightest”

Indeed conservatives and libertarians want to extend the ‘top-tier’ distinction down to primary and secondary education through greater funding for charter schools:

Success (defined as beating the competition) [charter school advocates argue] is influenced by competitive advantage, which derives from application of fixed capacities (some have it, and some do not) that are motivated by extrinsic reward. As a result, policies focus on hiring and firing able teachers rather than on developing them. “No-excuses” charter schools filter out those who do not fit in or have the “grit” to struggle though. Based on this vision the function of education will continue to be to sort out the best and the brightest for advancement.[…]

Hence, evidence of limited impact of charter schools, their tendency to increase segregation and the apparent folly of firing a few presumably ineffective teachers in order to have systemic impact are not viewed as problematic. Systemic impact was never been the goal. What they envision passing through their filter is improved chances for some motivated children who with a stronger education will have a competitive advantage over the rest of the children stuck in schools that simply cannot be improved. Reform, by this light, just makes the competition fairer. As a result, implementation of favored policies rather than achievement of systemic results are taken as evidence of success.

“The Obama economy is not working”

Meanwhile, the American workforce is shrinking and Rep. Marsha Blackburn (R-TN) knows who to blame:

What we need the president to do is to say the Obama economy is not working. The labor force participation rate is the worst it has been in 40 years.

She wasn’t alone. Representatives Lynn Jenkins (R-KS) and Cathy McMorris-Rogers (R-WA) have made the same claim, as has Sen. Ted Cruz (R-TX).

In fact half of the declining labor pool reflects the retirement of Baby Boomers, and most of the rest reflects would-be workers staying in school or taking more time to raise their children. Only about 15% of the decline is due to people giving up on jobs. And that’s a mixed statistic, according to George Washington University economist Tara Sinclair:

In general, economists like to see more people working because it generally helps economic growth, said Tara Sinclair, a George Washington University economist. But it’s also important to keep in mind that leaving the labor force can be a voluntary decision. “Perhaps people would prefer to have more time at home rather than more stuff,” she said.

“Such a game appears highly unattractive”

Which brings us back to economist-mathematician Ole Peters’ example of economic growth that benefits only a lucky few, as described at Direct Economic Democracy:

This simple set up means that a large enough population of players will, in aggregate, steadily gain from playing the game but all of the winnings will randomly accrue to an ever smaller minority of players whilst almost everyone loses almost everything. Ole Peters points out that from an individual’s perspective playing such a game appears highly unattractive. A critical point to emphasize is that it is just as unattractive for a winner to continue with the game as it is for anyone else. A winning or losing streak does not influence the future. A rational winner would choose to stop and keep the winnings.

Look back at J.D. Roth’s self-improvement list and you’ll find a common element. From taking on a second job to asking for a promotion to changing companies or careers to going back to school, they all involve adding risk. Some of the risks are obvious: such as changing companies or career fields, or borrowing money to go back to school. Others are less obvious. Your boss may read asking for a promotion – or your taking another job – as a sign that it’s time to look for your replacement.

And you may go back to school for a field that looks good when you start, but has dried up or is saturated by the time you finish. Nor is majoring in science, technology, engineering, or medicine (STEM) a guarantee, as fewer than half of college STEM majors end up working in STEM jobs.

Why take on that extra risk to become more productive – and possibly lose what little you have – in an economy where the 1% grab 95% of the earnings from new productivity? In a game like that, many people may reasonably choose “more time at home rather than more stuff.”

Rather than asking people to “look inward” if they can’t earn a living wage, we could raise the minimum wage:

New data released by the Department of Labor shows that raising the minimum wage in some states does not appear to have had a negative impact on job growth, contrary to what critics said would happen.

In a report on Friday, the 13 states that raised their minimum wages on Jan. 1 have added jobs at a faster pace than those that did not.

Paying more workers a living wage creates more jobs, and more economic growth. That’s the kind of “rising tide” President Kennedy meant, one that truly does “lift all boats.” It serves both the individual and the greater good … because it’s a game more people will want to play.


Happy Saturday!