LaborTalk for January 20, 2012

The Historic Problem of Economic Inequality
That Americans Have Been Unable to Solve

By Harry Kelber

Economic inequality is a fact of life in America, the richest country in the world. Why is it that this enormous wealth is shared so unequally?

There are corporation executives, bankers and wealthy individuals whose annual income amounts to millions of dollars — much more than they need for a comfortable, even luxurious, lifestyle.

Then there are millions of low-wage workers, who struggle to meet the bare necessities of life. And what about the army of unemployed, who have to scrounge for public handouts just to survive?

Why the difference? How does it arise?

One justification for the wealthy is based on a form of Social Darwinism. The rich and famous deserve their economic and social status, because they have better DNA for survival.

Or to put it another way: Isn't the United States the land of opportunity, and why shouldn't the rich be allowed to amass as much wealth as they can? The money they invest helps to build up the country. Their taxes pay for a lot of things that our nation needs, like an overpowering military force and homeland security.

Workers are told that Americans "can do everything they want to" and "you can be a success if you work hard and play by the rules." So why do we have millions of unemployed? What does "Free Enterprise" mean for working people who have hardly any savings and who live from paycheck to paycheck? What do tax credits mean for workers who do not have a bank account?

Why do the rest of us find it hard to maintain a Middle Class lifestyle or put aside a nest egg with sufficient savings when we retire? One reason is that the Haves don't want us Have Nots to get affluent. They increase their wealth by keeping wages and benefits as low as possible.

A Lot of Their Wealth Comes from Our Sweat

One source of economic inequality lies in the way the income and profits of a company are divided. Workers produce the company products, but employers are allowed to own the company and pay their employees as little as possible, while enjoying the fruits of their workers' labor.

Economic inequality could be greatly reduced if a worker's role in a company's operations and decisions were significantly increased. The German "cooptation" model is worth studying. It calls for an equal number of employer and worker representatives on the company's board of directors, with rotating chairpersons.

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If workers and their unions want to narrow the inequality gap between them and their employers, they will have to take extraordinary steps to achieve it. They should expect fierce resistance from Wall Street and the corporate establishment.

Do workers want a "level playing field" in their relationship with the employers? Do they think that, in simple justice, they deserve a substantial role in the operation and ownership of the company?

If so, they better get ready to fight for it. If they remain passive, economic inequality will continue to persist, with the rich exploiting the poor.

LaborTalk will be posted here on January 24, 2012 and on our two web sites www.laboreducator.org and on www.laborsvoiceforchange.org.

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