Income inequality in 2019

Bill gates and the truck driver       
By Dr. Larry Fedewa (February 23, 2019)
The first Americans were workers. They cut down the trees, plowed the fields, built the buildings, milked the cows, prepared the food, sewed the clothes, and spent most of their time doing the tasks that were necessary for survival in a hostile land. Thus the main thrust of American technology has always remained labor-saving devices.
The effort to replace the drudgery and difficulties of human labor has produced unheard-of efficiencies — from Eli Whitney’s cotton gin and gun assembly lines to the invention of tin cans and sewing machines to the succession of ever-increasing machines and techniques in America’s march through time. These technologies have also provided an extension of human powers. They have made it possible for humans to lift huge weights, see new sights faraway as well as infinitesimally tiny, travel at astonishing speeds to astonishing places, and think thoughts never before conceived.
Future looking prophets have long wondered what would happen to all the people whose labor has been saved when they were no longer needed. We now have an answer to that question. They have simply stayed in place but without the work that had sustained them and their families. There are still 3.5 million American workers in their prime who are not working even in this booming economy. (see Jeffery Bartosh, Baron’s Market Watch, March 3, 2018).
This trend has been building for a generation, so it is not new. The globalization of the 1990’s introduced a tremendous acceleration of this trend by making available to low-wage populations the information required to manufacture high technology products. This development allowed American companies to outsource labor away from high cost Americans. The Trump revolution has slowed the juggernaut by reversing some of the effects of globalization, particularly with respect to manufacturing and trade. But the fact is that the transfer of activities which have been performed by human hands and brains to robots and computers is here to stay. It is the hallmark of America’s technological history.
What is lacking is any adjustment in our laws and customs to this new reality. Our thinking absolutely MUST include a way to provide meaningful lives to the 30%+ of our population which have been displaced by our technological progress. After all, the goal of labor-saving technologies has always been the increase of leisure time for people to create new ideas, things, and relationships. The irony is that the work ethic which evolved to achieve this goal is at odds with the ethic required to find happiness in the leisure society. As a culture, we have worked hard to create a society in which physical work is minimal. Now that we are entering into that new world, we are still viewing happiness as the result of the work that has been made obsolete by our success!
Bringing this paradox down to common language, it means that, as long as financial security is tied to employment, anyone whose work skills are obsolete will suffer. Our identity and self-image – in addition to our financial well-being — depends on our employment. The goal of American technology has been to reduce physical labor so that people do not have to endure its trials and tribulations. But our thinking has not gone beyond that effort to answer the key question, what do we do if we succeed?
From a social justice perspective, what has in fact happened is that the people who invented the systems for reducing physical labor have reaped incredible financial benefits while the people whose labor has become obsolete have been demoted, often to the point of poverty. Thus the ever-increasing income inequality we are now experiencing. So now the question is, what to do about it?
The most visible solution being offered today is a system of guaranteed income. In this system, the government becomes the agent for the re-distribution of wealth, in essence taking from the rich and giving to the poor. Our government already does this by our graduated indexing of taxation, but guaranteed income takes this function to a whole new level. The formulas proposed range from the vagueness of the “Green Dream” to the far more sophisticated approach of Andrew Yang’s “$1000/month as a right of citizenship”.
There are a couple of things which must be stipulated about these ideas. First, even the masters of the new systems, such as Bill Gates and Warren Buffet, admit openly that their rewards far exceed their individual value, as when Gates says he does not “deserve” his fortune. Most people would agree with that. Particularly when contrasted with the about-to-be-displaced truck driver, who has a high school education and an average $46,000 per year income which he will lose when automated trucking matures. (ibid). This is wrong – most people would agree.
However, as usual, the devil is in the details, Yang’s approach is a value-added-tax (VAT), such as that used by the European Union. In his arithmetic, the tax burden vastly increases but the distribution is essentially non-discriminatory (like sales taxes today). Still, the very idea of the federal government as the agent of accounting for, collecting and re-distributing the proceeds of every transaction of every US citizen is shocking and anathema to many Americans. It is too close to the absolute power which corrupts absolutely. Especially in light of the recent IRS scandal. Giving immense new power to the Deep State is not an attractive option.
Yet the problem remains. And it is going to get worse. If it is not solved, America will become a society of the very rich and the very poor. Given the democracy we live in, however, the poor will get organized and force the issue perhaps in the tilt toward socialism.
Maybe the solution lies in the world of philanthropy where Gates and Buffet have landed in their quest to spread their wealth, along with many others, starting with John D. Rockefeller and Andrew Carnegie. In this case, the funding pool might be collected and directed by the government and administered by a philanthropic entity. Or maybe there should be another category of Social Security for the benefit of displaced workers funded by a new type of tax exemption.
The bottom line is that we have a problem. It must be solved. We cannot live with one-third of our employable adult population on welfare.
© 2019 Richfield Press. All rights reserved.

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