Chief Economist, John Norris, answers the most commonly asked questions.
As the Presidential campaign has been heating up, it seems income inequality will be a major topic moving forward. We have all heard the old adage “the rich get richer and the poor get poorer,” and heard the arguments for ‘living wages’ and $15/hour minimum wages. However, how much do you think these passionate issues will shape the election in 2020?
I don’t believe there is any doubt these will be major issues in next year’s elections and elections well after that. I further believe the Congress will likely adjust the minimum wage, or meaningfully attempt to do so, prior to next November. After all, few are the politicians who want to head to the polls with a heart of stone in the public eye
We understand perception can eventually become reality, and even a lie will become the truth if you tell it long enough and loud enough. Hey, we can debate the validity of all of this until the cows come home, but the data is what the data is and Americans have been getting wealthier in aggregate. To be sure, some are getting wealthier than others, but that doesn’t necessarily mean everyone else is getting the short-end of the stick.
After all, wealth is a relative term, and even the poorest among us would be considered wealthy in many countries around the world. But we already know that, don’t we? So, what are we really worried about? Is it really the living standards of the poor or the, well, presumed fairness of the system?
Americans love the concept of fairness. How many times have you heard or even used the phrase ‘level playing field’ or have wondered whether everyone is playing by the same rules as you? Me? I like to use the expression “I must have been absent from class that day” when reading about someone making vast sums seemingly without much effort or really having to put much on the proverbial line.
Is it fair some single mother has to support two hungry children with some dead-end job while baseball players sign $400 million 10-year contracts? Seriously, it would take someone making $100,000/year, get this, 4,000 years to make that amount. To put that number into perspective, humans were living in the Bronze Age 4,000 years ago. This is just one example. The answer? I demure.
You see, the system is fair in more ways than it isn’t. Highly trained people with so-called marketable skills make more money than the alternative, and economic decisions come down to one basic question: how much are you worth to the economy? Oftentimes, the answer is a bitter pill to swallow.
With that said, even if the system is mostly fair, it doesn’t mean our economic values aren’t a little warped. I would argue they are, as it seems our society places increasing importance on things and skills which ultimately don’t matter that much. That leaves a lot of folks on the outside looking in, and a lot of people on the inside which wouldn’t be there in another culture or in another time.
Now, that might be a topic of discussion for another time.