The Case for a Maximum Wage E-Book

Sam Pizzigati

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch
• Veröffentlichungsjahr: 2018

Seitenzahl: 135

Beschreibung

Modern societies set limits, on everything from how fast motorists can drive to how much waste factory owners can dump in our rivers. But incomes in our deeply unequal world have no limits. Could capping top incomes tackle rising inequality more effectively than conventional approaches? In this engaging book, leading analyst Sam Pizzigati details how egalitarians worldwide are demonstrating that a "maximum wage" could be both economically viable and politically practical. He shows how, building on local initiatives, governments could use their tax systems to enforce fair income ratios across the board. The ultimate goal? That ought to be, Pizzigati argues, a world without a super rich. He explains why we need to create that world -- and how we could speed its creation.

Leseprobe

Contents

Cover

Copyright

Dedication

Acknowledgments

Introduction: Moderation in All Things, Even Income

Notes

1 Defining Excess

Notes

2 The Magic of Maximum Multiples

Notes

3 A Society without a Super Rich

Notes

4 Pipe Dream or Politically Practical Project?

Notes

5 Evolving toward Equity

Notes

End User License Agreement

Guide

Cover

Table of Contents

Begin Reading

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The Case For series

Sam Pizzigati, The Case for a Maximum Wage

The Case for a Maximum Wage

Sam Pizzigati

polity

Copyright © Sam Pizzigati 2018

The right of Sam Pizzigati to be identified as Author of this Work has been asserted in accordance with the UK Copyright, Designs and Patents Act 1988.

First published in 2018 by Polity Press

Polity Press65 Bridge StreetCambridge CB2 1UR, UK

Polity Press101 Station Landing Suite 300Medford, MA 02155, USA

All rights reserved. Except for the quotation of short passages for the purpose of criticism and review, no part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher.

ISBN-13: 978-1-5095-2495-2

A catalogue record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data

Names: Pizzigati, Sam, author.Title: The case for a maximum wage / Sam Pizzigati.Description: Cambridge, UK ; Medford, MA : Polity Press, 2018. | Series: The case for | Includes bibliographical references and index.Identifiers: LCCN 2017048524 (print) | LCCN 2017050835 (ebook) | ISBN 9781509524952 (Epub) | ISBN 9781509524914 (hardback) | ISBN 9781509524921(pbk.)Subjects: LCSH: Wages--Government policy--United States. | Rich people--Government policy--United States. | Equality--United States.Classification: LCC HD4975 (ebook) | LCC HD4975 .P27 2018 (print) | DDC 331.2/3--dc23LC record available at https://lccn.loc.gov/2017048524

The publisher has used its best endeavours to ensure that the URLs for external websites referred to in this book are correct and active at the time of going to press. However, the publisher has no responsibility for the websites and can make no guarantee that a site will remain live or that the content is or will remain appropriate.

Every effort has been made to trace all copyright holders, but if any have been inadvertently overlooked the publisher will be pleased to include any necessary credits in any subsequent reprint or edition.

For further information on Polity, visit our website:politybooks.com

For Pablo, Chaly, and Tomás

Acknowledgments

I’ve been writing about inequality – and the notion of a “maximum wage” – for almost three decades now. I can’t seem to stop. That may be because the societies I know best keep getting more unequal. Or maybe I just enjoy hanging out with egalitarians, most notably my collaborators on Inequality.org.

My thanks to everyone whose ideas and encouragement have shaped this slender volume. A special appreciation to New York labor activist Jeff Vogel and Canadian researcher Jacob David Poulin-Litvak, two indefatigables on all things maximum wage related.

These chapters also owe much of the value they may have to the patient scrutiny of ace readers Nancy Leibold and Carl Luty. My deepest thanks as well to my eminently thoughtful editors at Polity, George Owers and Justin Dyer. And my deepest gratitude, as always, goes to Karabelle. She may not have lived long enough to peruse these pages, but her wisdom and compassion, after nearly a half-century together, remain my rock.

Sam Pizzigati October 2017

IntroductionModeration in All Things, Even Income

Most of us shy away from excess. Everything works better, we understand, in moderation. Too much of anything, even essentials for our health and humanity, does us no good. Too much food can leave us dangerously obese. Too much strenuous exercise can break down our bodies. Even too much love can become suffocatingly obsessive.

Excess creates messes. Societies grasp this reality almost instinctively – and set limits to keep excess at bay. We limit how fast motorists can drive. We limit how much waste factory owners can dump in our rivers. We limit how much noise our neighbors can make.

But we don’t set limits on everything. We do not limit personal income. We have no “speed limit” on how rapidly the rich can become richer. And they have become richer. Phenomenally richer.

Many of our most compelling numbers on global fortunes come from the annual wealth reports the Credit Suisse Research Institute began publishing in 2010. Midway through 2017, Credit Suisse calculates, the world’s wealthiest 1 percent held 50.1 percent of global wealth, more than the rest of the world combined.

Those who hold truly grand fortunes – over $50 million in net worth – make up just a tiny fraction of the wealthy who can claim global top 1 percent status.1 Credit Suisse counts over 148,000 of these “ultra-high net worth” fortunes, with about half in the United States.

The richest of the ultra rich, the world’s billionaires, now total over 2,000. The least of these billionaires now hold 279,000 times more personal wealth than our planet’s typical adult.

The activist charity Oxfam has translated the Credit Suisse numbers into some memorable images. In 2009, the group points out, the world’s 380 richest billionaires – a cohort small enough to fit into a jumbo jetliner – held as much wealth as humanity’s poorest half. By 2017, the combined fortunes of just 42 billionaires could offset the entire net worth of the 3.7 billion people who make up the world’s bottom half.2 These eight could ride comfortably in a standard-sized city-bus.

This top-heavy distribution of the world’s treasure, some maintain, rates as no big deal. Think of all the entertainment value the super rich create, they quip. How could we live without the Instagrams of young wealthy heirs “flaunting their Rolexes, Maybachs and pet lions”?3 One recent British TV series took viewers “behind the scenes at a luxury hotel to reveal the extravagant and ridiculous requests of the rich and famous.”4 In one episode, a guest checks in with 200 pieces of luggage, a bride insists on an elephant for her wedding party, and a gentleman of means wants his socks pressed. We’re expected to giggle at their vanities.

Most of the world, fortunately, sees vast gaps in income and wealth as no laughing matter. Inequality has become, as Barack Obama observed early in his second term, the “defining challenge of our time.”5

“A world in which 1 percent of humanity controls as much wealth as the other 99 percent,” Obama added in a United Nations address, “will never be stable.”6

Leading global figures have echoed those sentiments. Pope Francis has labeled inequality “the root of social evil.” Nobel Peace Prize laureate Muhammad Yunus, the celebrated founder of the microfinance movement, has described the concentration of the world’s wealth as a “ticking time bomb.”7 In 2014, a survey of over 1,700 global movers and shakers set to attend the annual World Economic Forum in Davos identified “deepening income inequality” as the world’s most pressing issue.8

People worldwide, the Washington, DC-based Pew Research Center has found, share a similar perspective.9 Pew surveyed 44 nations in 2015. Majorities in all 44 called the gap between rich and poor “a big problem facing their countries.”

All these anxieties about our economic divides rest upon a veritable explosion of research into inequality’s impact on our daily lives and long-term prospects. Over the last quarter-century, the International Social Science Council reports, the number of studies on inequality-related concerns has increased “five-fold.”10

Much of this new research involves the United States, the world’s most unequal developed nation. In the United States, as elsewhere, inequality endangers almost everything we hold dear. Divorce rates run the highest in American counties where inequality has increased the fastest. US states with income highly concentrated at the economic summit have more carbon emissions and weaker environmental protections. Highly unequal states also have higher incidences of hate crimes.11 Just plain civility suffers, too, in less equal jurisdictions. People in America’s most unequal states, notes University of Melbourne psychologist Nick Haslam, “score relatively low on agreeableness” and show more willingness “to engage in immoral behaviour.”12

Researchers have found stark differences between more and less unequal jurisdictions at the national level as well. In 2009, the British social scientists Richard Wilkinson and Kate Pickett brought these differences to global attention with their landmark book, The Spirit Level: Why Greater Equality Makes Us Stronger, since published in some two dozen foreign editions. People in more unequal developed nations, The Spirit Level revealed, can be anywhere from two to ten times more likely than people in more equal nations to be obese or get murdered, to mistrust others or have a pregnant teen daughter, to become a drug addict or end up in prison.

Earlier work by Wilkinson and Pickett had focused attention on what may be inequality’s most dramatic impact: People in more equal nations live significantly longer than people in less equal nations. The distinctly unequal United States ranks close to the developed world basement on life expectancy – despite spending on health care almost triple the developed world per capita average.13 If current trends continue, the medical journal Lancet reported in 2017, American lifespans – once among the world’s longest – will by 2030 stretch no longer than lifespans in Mexico, a far less prosperous nation.14

News reports typically blame America’s shockingly low life-expectancy rates on a lack of access to affordable health care or poverty or poor personal habits. But epidemiologists – scientists who study health outcomes – point out that the United States ranked as one of the world’s healthiest nations in the 1950s, a time when ample numbers of Americans smoked heavily, ate a diet that would horrify any twenty-first-century nutritionist, and hardly ever exercised. Poor Americans, then as now, had chronic problems accessing health care. And poverty, epidemiologists add, can’t explain why fully insured middle-income Americans today live shorter, less healthy lives than middle-income people in other rich nations.

What can explain these shorter, less healthy lives? Epidemiologists cite what they call “the social determinants of health.” The more inequality in a society, the more stress. Chronic stress, over time, wears down our immune systems and leaves us more vulnerable to disease. This same stress drives people to seek relief in unhealthy habits. They may do drugs or smoke – or eat more “comfort foods” packed with sugar and fat.

Inequality has an equally potent impact on healthrelated public policy.

Much of our adult health, University of Washington epidemiologist Stephen Bezruchka explains, gets programmed into us at an early age.15 Given this reality, guaranteeing every child adequate support in the early years ought to be the top priority for any society committed to better health for all. But more unequal nations do precious little of this guaranteeing. They regularly appear at the bottom of global rankings for child well-being.16

Why do more unequal nations so consistently shortchange children? Their behavior at first glance seems inexplicable. No politicians in modern democracies ever campaign against kids. So why doesn’t public policy in unequal nations adequately support kids? The answer may well lie in the most classic of inequality critiques: Intense concentrations of wealth, political thinkers have long argued, undermine democratic governance. Among these thinkers: the Americans who founded the world’s first modern republic in 1776.

“The Founders understood full well that if severe economic inequality emerged,” writes Vanderbilt University legal scholar Ganesh Sitaraman, “their democratic experiment would collapse.”17

In the contemporary United States, severe economic inequality has emerged, and that emergence has political scientists studying whether the nation even still rates the democracy label. Northwestern University’s Benjamin Page and Princeton’s Martin Gilens have crunched 20 years of data – on nearly 1,800 policy issues – to see how well contemporary American politics “responds to the wishes of the average citizen.”18

What do the data show?

“If you observe the United States right now, you discover that the average citizen has no detectable influence on policy,” notes Page. “That’s not much of a democracy.”

The deeply unequal Philippines also rates as not much of a democracy, and local business leaders like Henry Schumacher of the Filipino European Chamber of Commerce see inequality as the culprit: “Inequality breeds corruption and leads to a dependency of the poor on their political leaders.”19 Corruption, in turn, aggravates inequality: Only the well-off can afford to bribe. An unholy trinity – inequality, corruption, and mistrust – creates a “vicious circle” almost impossible to bust.

In unequal nations, agrees a 2016 International

Monetary Fund analysis, people simply trust others less.20 Its authors, Alexander Hijzen and Eric Gould, posit that this may be one reason why inequality undercuts economic growth and development. Over recent years, the world’s three prime global economic institutions – the IMF, the World Bank, and the OECD, a government-funded economic think tank for the developed world – have all chimed in with research that directly ties inequality to economic dysfunction.

A generation ago, ironically, mainstream economists believed that greater equality fostered dysfunction. Any attempts to restrain incomes at the top, this mainstream held, would reduce incentives to save and invest and throttle the economic growth necessary to “lift all boats.” But that mainstream has reversed course and now sees inequality as more likely to sink boats than lift them.21 Rising income inequality, IMF managing director Christine Lagarde warned in 2014, is casting a “dark shadow” across the global economy.22 Reversing inequality’s “long-run rise,” the OECD noted the same year, “would not only make societies less unfair, but also richer.”23

Economists and epidemiologists, psychologists and political scientists: Researchers from multiple disciplines have detailed the high price we pay when we tolerate intense maldistributions of income and wealth. If we want a world more welcoming to the best humanity can be, the social science consensus holds, we need to narrow the gaps that divide us.

But how? Here we have no clear consensus. We do have options. Societies can narrow the gaps in income that distance our most and least affluent in three basic ways. We can level up incomes at the bottom of our economic order. We can level down incomes at the top. Or we can do both.

Those who sit atop our economic order – and those who seek their favor – typically do their best to confine us to the first of these options. To narrow our economic divides, friends of grand fortune advise, we need to work at lifting up the bottom. Fighting inequality, they maintain, need only involve attacking poverty, nothing more.