The gap between the richest Americans and everyone else is growing at an alarming pace.
Income inequality is now at its worst since the late 19th century, when the “robber barons” amassed incredible wealth and used it to dominate public policy.
America has now entered a second Gilded Age when many corporate CEOs make more money in one day than their average employee earns in an entire year.
How did this happen?
About 35 years ago, many Americans were sold on a political philosophy that focused on the needs of the wealthy few. Tax rates were slashed for the richest Americans while the rights of workers to Unionize were attacked on several fronts.
Time has proven this philosophy to be economically disastrous, but many people still cling to its myths.
Myth 1: CEOs are job creators
President Obama and his allies have tried to raise taxes on the wealthiest 1 percent of Americans, but their efforts are resisted by those who still think that CEOs and wealthy investors are the economy’s “job creators.”
But they aren’t.
People like you and me are the real job creators. We buy the goods that generate profits and force businesses to hire more people to meet demand. This is why policies that suppress the wages of working people also suppress job growth.
Former Secretary of Labor Robert Reich notes that the U.S. is experiencing its most “anemic recovery on record” because “most Americans don’t have enough money to get the economy out of first gear. The economy is barely growing and real wages continue to drop.”
Myth 2: Workers are paid what they are worth in the job market
In 1970, CEO pay was 30 times more than worker pay. Today, CEOs earn on average 300 times more than their employees. At the same time, workers make less than they used to, when adjusted for inflation.
A key reason is the decline in Union membership. In 1970, roughly one-third of all wage and salary earners belonged to a Union. Today, the figure is approximately 11 percent. Denied the benefits of collective bargaining, workers’ wages have dropped — even as their productivity has skyrocketed.
Myth 3: Those who have the will to succeed will succeed
Our children don’t have the resources they need to prepare for life as adults. Their teachers aren’t paid enough, their schools need repair and their textbooks are out of date.
More than 40 percent of children who are born in poverty will remain poor as adults, largely because our education system has been denied the resources it requires.
As Americans retire, we’ll need to replace those workers with competent ones, and this won't be possible if we can’t educate our children properly.
Myth 4: Increasing the minimum wage will kill job growth
Have you heard the argument that raising the minimum wage will lead to more outsourcing of our jobs over - seas? That’s not true, either.
Retail jobs cannot be outsourced. If they had more money in their pockets, our minimum-wage workers would spend more and create more jobs.
Studies have shown that Walmart could afford to give its employees a 50 percent raise without significantly raising prices on its merchandise. The same is true for other non-Union companies in retail.
It’s time we reject the myths of a failed economic theory. It’s time to raise the minimum wage and ask the wealthiest Americans to contribute more to the society that has enriched them.