Whether it is OK for anyone to be a billionaire is debatable. Whether it is OK for the top 1% of Americans to be worth 16 times more than the bottom 50% combined is not.
Wealth gap and income inequality are terms often used interchangeably. For academic study, data collection and tax policy, there is a difference. For discussions about social cohesion, community involvement, mutual trust and all the other factors that make a society strong, there isn’t.
Studies have made clear that pronounced income inequality results in societies with lower long-term economic growth, higher crime rates, poorer public health, increased political inequality and lower education levels.
From a simple capitalist standpoint, financial rewards that accrue to the most productive groups in society should contribute to the growth of the overall economy. Over the past three decades, however, U.S. growth rates have slowed as money moved into fewer and fewer hands.
Barron’s, a magazine devoted to financial sector interests, put it simply: “When a large group of the population is in economic distress, their spending is limited. And spending is what drives the economy, corporate earnings, and, ultimately, the stock market.”
In the United States, more and more Americans are economically distressed. Falling growth rates stress businesses. Tax policies penalize wages, but at the same time give breaks to those who do little more than move money from pocket to pocket.
The chasm between those on the top and those on the bottom has been expanding at a ruinous rate. It erodes any sense of common interest, of fairness in government and of the most American dream, a better life for children. The widening wealth gap threatens the stability of the American way of life.
President Joe Biden has proposed investments in the physical and human infrastructure to help wage earners contribute to the revitalization of America’s economy and competitiveness. Progressives like Sens. Elizabeth Warren and Bernie Sanders, and Rep. Alexandria Ocasio-Cortez argue that the wealthiest Americans could and should spend more to pay for it.
To celebrate Labor Day, we would do well to make sure arguments over these proposals are given serious consideration. We would do well to ignore grandstanding by those looking to make political points at the expense of working people.
By closing the wealth gap, America can realize its dreams of economic security, good health and good will for all.
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