Economic inequity has become a touchstone of our times. This week, NPR and the University of Rhode Island both kickoff dialogues on income inequality.
Last week brought a glimmer of good economic news to a state and nation that have grown all too used to doom and doldrums.
The U.S. Census Bureau reported that Americans at nearly every level saw their incomes jump at an average of better than 5 percent.
Yes, the rich got richer. But the poor got richer too and so did the middle. The Census showed young and old, women and men, white, black and brown and immigrants and native- all saw economic advances.
After years of stagnation, a rising tide is finally lifting both quahogger’s skiff and luxury yachts. Economists on the left and right will argue about the reasons. And we all should approach this report with a note of genuine caution, says Rick McIntyre, chairman of the economics department at the University of Rhode Island.
One Census report isn’t going to change the underlying causes of an American economy that has sliced us into a nation of have-nots, haves and have-mores. While taxes on high-earners have increased under President Obama’s trickle-up policies, taxes on the very wealthy investors are still remarkably low, says McIntyre.
Then there is the decline of private-sector unions, once the lifeline of blue-collar working folks. It isn’t only the decline of organized labor that has led to wage stagnation. McIntyre says the mere threat of unionization used to keep wages up because employers who didn’t want their workforce to have the right to bargain collectively would pay higher wages to keep unions out.
In an economy fueled by capitalism and the job-killing innovations it breeds, there will always be a need for stronger safety nets, says Liam Molloy, a URI economist and an organizer of the colloquium that begins tomorrow. If you’re a 55-year old factory worker who lost a job, society needs to provide some help so that you and your family don’t drop into poverty. Molloy says some of the Scandinavian countries, free-traders all, have developed better solutions than the U.S.
Another aid for low-skill workers is to hike the minimum wage, says George Nee, president of the Rhode Island AFL-CIO. Nee says raising the floor wage to the same level as Massachusetts, which in January will have a minimum wage that is $1.40 per hour above Rhode Island, will be labor’s top priority when the General Assembly convenes in January.
Business organizations, such as the Greater Providence Chamber of Commerce, always assert that the state’s economy can’t grow unless taxes and business expenses are in synch with our neighboring states. Next you see a business leader, maybe you ought to ask he or she why wages for our lowest-skilled and least educated workers ought to be substantially lower than in other New England states.
Let’s remember that the fulcrum of growth for generations in our state and nation has been education. An opportunity society offers a ladder for motivated children of working class families. This means investing more in public schools and colleges to ensure that this path is cleared for another generation, particularly the offspring of immigrants.
Some conservatives loudly complained that such Obama policies as the Affordable Care Act and increasing taxes on the better-off would crash the economy. That obviously hasn’t happened. The top one percent is now paying about the same share of its income in federal taxes as in 1979, according to liberal economist Paul Krugman. Some of that money has gone to providing health care for the poor, ensuring that serious sickness doesn’t spiral down to family bankruptcy.
Liberals need to understand that helping people means just that, not killing the incentives of capitalism that lead to a bigger economic pie for everyone.
Rhode Island still has the highest rate of residents – about 14 percent – living in poverty among the New England states, according to data from the Economic Progress Institute. Rhode Island’s median income was lower than other New England states, except Vermont and Maine. Yet, Obamacare and the expansion of Medicaid has brought the number of uninsured Rhode Islanders down to less than six percent.
The latest census report was a slant of light in what has been years of a dark tunnel of stagnation. Yet, before we get too giddy, let’s remember that – after adjusting for inflation – household income in 2015 was just about where it was in 1998.
Scott MacKay’s commentary can be heard every Monday at 6:50 and 8:50 on Morning Edition and at 5:44 on All Things Considered. You can also follow his political reporting and analysis at our `On Politics’ blog at RIPR.org
