Gov Must Respond to Middle-Class
Liberals have long worried over the effects of income inequality.
Many conservatives are now starting to worry too. After all:
- Low income means people lack money to buy, so:
- Businesses lose sales and profits, so:
- Increased business instability, and:
- Worry over political instability (Peasants with pitchforks)
- CEOs share productivity gains with the workers who help create profits
- A higher minimum wage
- Don’t incentivize moving US jobs overseas
- Enhance bargaining power for workers
- Raise the Child Tax Credit
- Raise the Earned Income Tax Credit
- Don’t tax the rich at a lower rate than everyone else (e.g., capital gains)
- Don’t allow tax shelters for the rich
Articles from conservatives and conservative sources, like the Wall Street Journal (WSJ):
WSJ: Low income is squeezing business
The housing market illustrates how weakness among middle-class consumers holds back the U.S. economy. Homes are generally the biggest purchase Americans make. Housing dollars ripple through the economy by triggering spending on appliances, furniture and landscaping…. I worry that you can’t run our housing market, which depends on volume, on affluent buyers alone…
WSJ: Stagnant incomes have restrained the American consumer for years, creating a vicious circle that has left businesses waiting for stronger spending before they rev up hiring and investment.
WSJ: As incomes have stagnated over the past half decade… families (are forced) to cut back spending on everything from clothing to restaurants.
WSJ: The conservative IMF (International Monetary Fund) has warned:
A severely skewed income distribution harms the pace and sustainability of growth over the longer term. It leads to … a wasteland of discarded potential.
The past few decades of widening inequality can be summed up as significant income and wealth gains for those at the very top and stagnant living standards for the majority.
Standards and Poor (S&P):
If you look systematically at the international evidence on inequality, redistribution, and growth — which is what researchers at the I.M.F. did — you find that lower levels of inequality are associated with faster, not slower, growth.
Income redistribution is “robustly associated with higher and more durable growth.”
Billionaires to the Barricades. Some of the world’s wealthiest people are now worried about the gap between them and the working class.
Good pay + good profits
Companies that provide employees a decent living, which includes not just pay but also a sense of purpose and empowerment at work, can be every bit as profitable as companies that strive to keep their labor costs low by paying the minimum wage with no benefits.
Posted on September 21, 2017, in politics/class inequality and tagged business instability, income inequality, political instability, wealthy worry about income inequality. Bookmark the permalink. 4 Comments.