Ah, sweet Labor Day.
In normal times the weekend marks the end of summer’s heat, the beginning of baseball’s pennant stretch and a chance to revel in the promise of American life.
But these are not normal times.
This summer’s heat rarely broke a sweat. The baseball season never made it past mid-August. And the promise of American life, well, it raises a troubling question: Whose American life? That of the skilled or the unskilled? The haves or the have-nots?
If we’re lucky, we’ll get a warm autumn and a baseball strike settlement in time for a World Series.
That last item, though-the growing chasm between America’s skilled haves and unskilled have-nots-will take longer than a season to correct.
No, my conservative friends, this isn’t another McCarron plea for a higher minimum wage, universal health insurance or a more progressive income tax. I still favor those things, but as a recent cover story in Business Week pointed out, they are not central to the widening gap between rich and poor in the United States.
That’s right, Business Week, a publication not known for leftist leanings or redistributive economics, led its Aug. 15 issue with the headline, “INEQUALITY-How the growing gap between rich and poor in America is hurting the economy.”
Not only did writer Aaron Bernstein assert that America’s rich are getting richer and its poor poorer-a hotly disputed proposition during the 1980s-but he tendered strong evidence that the entire country will be the worse if something isn’t done about it.
“Since the late 1970s an explosion of income inequality has occurred along educational lines,” Bernstein wrote. “Families in the mostly college-educated top quarter-those with annual incomes today of more than $64,000-have prospered, thanks to the rising demand for highly skilled workers and tax cuts for the rich.
“Meanwhile,” he went on, “import competition and the decline of unions have left families in the bottom quarter-whose breadwinners often dropped out or stopped after high school and earn less than $22,000-stranded in low-wage limbo. This has led to the widest rich-poor gap since the Census Bureau began keeping track in 1947: Top-fifth families now rake in 44.6 percent of U.S. income, versus 4.4 percent for the bottom fifth.”
The problem at the bottom isn’t so much the welfare poor as it is those families with breadwinners who are stuck in low-skill jobs that pay only slightly more than the minimum wage and that offer little chance for advancement. Our economy is becoming bottom-heavy with such jobs as union-scale factories melt away, only to be replaced with strip-mall discounters and fast-food restaurants.
But how does this hurt the overall economy, you ask? The most obvious answer-that growing numbers of near-poor won’t be able to buy the economy’s goods and services-doesn’t cut it as macroeconomic theory. As long as there are plenty of New Age workers out there buying fancy cars and luxury homes, America’s demand side will hold up nicely. Scary, isn’t it?
The real threat to the overall economy, according to experts surveyed by Business Week, is the shortage of skilled workers that will develop as succeeding generations of the disaffected and underemployed drop out of school and/or veer off into self-destructive behaviors such as out-of-wedlock parenting and substance abuse.
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All the while, industry worldwide continues to move away from repetitive, assembly-line tasks that can be performed by the marginally skilled and toward more flexible modes of manufacturing that push decision-making down to the shop floor. America is not producing that kind of independent-thinking workers, or at least not enough of them, to compete with countries that do a better job educating their workers-countries such as Germany, Japan, South Korea and Indonesia.
No government program is going to cure America’s skills/income gap. There’s not enough money for it in the federal budget, and even if there were, the will to change will have to come from companies that want to compete and families that want their children to succeed.
And succeed we must. Not just because it’s the right thing to do, but because doing otherwise would be bad for business.