Income inequality is an issue that negatively affects most teens in America. You hear a lot about it these days. Are you, like many people, wondering what income inequality is? Why you should care about it? From the Founding Fathers, to Franklin Delano Roosevelt, to Bernie Sanders, and many others, this is an issue that has concerned people throughout our country's history. They were right to be concerned about it. It is a problem, but there are some things we can do to minimize it.
Income inequality occurs when a few people have a lot of money, while most people do not. There are several models used to define income inequality. All of them give the same result. The U.S. has one of the highest levels of income inequality of any developed country. The most commonly used measure of income inequality is the Gini Coefficient. The Gini Coefficient ranges from 0 to 1. A value of 0 means everyone earns the same amount. A value of 1 means one person earns all of the money. When a country has a low Gini Coefficient it means that there is a smaller gap between the small group of very rich people and everyone else. When a country has a higher Gini Coefficient it means that there is a larger gap between the very rich and everyone else. Countries with lower Gini scores, meaning smaller income gaps, have lower childhood mortality and poverty rates, better public education, higher wages for lower wage earners, and better medical services for all. America's top one tenth of one percent owns almost as much wealth as the bottom ninety percent. The United States has a Gini Coefficient 0.380 after taxes, which puts it 30th out of the 34 OECD countries. A high Gini Coefficient is what happens when most of a country's wealth is owned by just a few people, as is the case in the U.S.
A study in 2011 found that income for people in the top 1% rose 275% between 1979 and 2007. The same study found that income for the 60% of people in the middle rose only 40%, an amount that didn't keep up with inflation. The group most affected by income inequality is fifteen to twenty four year olds. The average Gini Coefficient for people from fifteen to twenty four is a staggering 0.519 compared to the national average of 0.380. What this means is that most people between the ages of fifteen to twenty four have very little, but a few have a lot. The minimum wage workforce is "Disproportionately young: 50.4% are ages 15 to 24; 24% are teenagers (ages 16 to 19)" -Pew Research Center. Again, countries with a low Gini Coefficient have lower childhood mortality and poverty rates, better public education, higher wages for lower wage earners, and better medical services for all which are all issues teens should care about. We live in the richest country in the history of the world, but that means little because most of that wealth is controlled by a tiny handful of individuals. This is one reason why it is so important that the minimum wage is raised. If we raised the minimum wage it would help make our country more equitable for our youth. In a fair country the minimum wage would reflect how hard we worked and I don't believe that fifteen to twenty four year olds work less hard than any other group of people. This is why we need to elect officials who care about raising the minimum wage and lowering income inequality in our country.
Most conservatives try to justify the continuation of the advantages enjoyed by the rich by citing the principles our country was founded on. When you look at what the people who actually founded our great nation had to say on the subject it is obvious that income inequality isn't a new problem. Since the Founding Fathers, people have been worried about income inequality.
October 28, 1785, Thomas Jefferson, author of the Declaration of Independence and third president of the United States, wrote in a letter to James Madison: "I am conscious that an equal division of property is impracticable. But the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property, only taking care to let their subdivisions go hand in hand with the natural affections of the human mind." "Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise. Whenever there is in any country, uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right." "it is not too soon to provide by every possible means that as few as possible shall be without a little portion of land."
We can tell from this that Thomas Jefferson believed legislators, elected officials, should try to reduce misery for the bulk of mankind by reducing the enormous wealth and income inequality (in his day property equated to wealth). One proposition of his is to exempt all of those below a certain point from taxes and to raise taxes on all people above a certain income level. He believed one of the goals of legislators should be to see that as few people as possible would be without some wealth. Jefferson believed government should ensure there was a smaller gap between the very wealthy and everyone else.
January 23, 1792, James Madison, primary author of the United States Constitution, the fourth president of the United States, and the author of the Bill of Rights, wrote: "In every political society, parties are unavoidable. A difference of interests, real or supposed, is the most natural and fruitful source of them. The great object should be to combat the evil: 1. By establishing a political equality among all. 2. By withholding unnecessary opportunities from a few, to increase the inequality of property, by an immoderate, and especially an unmerited, accumulation of riches. 3. By the silent operation of laws, which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort. 4. By abstaining from measures which operate differently on different interests, and particularly such as favor one interest at the expense of another. 5. By making one party a check on the other, so far as the existence of parties cannot be prevented, nor their views accommodated. If this is not the language of reason, it is that of republicanism."
If James Madison were alive today he would be horrified by the fact that, as opposed to withholding unnecessary opportunities from an immoderate and unmerited few, like the Koch Brothers and their cronies, we are withholding necessary opportunities from the many. He felt that unnecessary advantages given to the immoderate and unmerited were, simply put, evil. You can see in item 3 that the author of the Constitution believed there should be laws that, without violating property laws, decrease income and wealth inequality. It is also clear James Madison thinks we should not have laws that give tax breaks and new wealth to the top 1% to the detriment of the bottom 99%.
January 20, 1933, Franklin Delano Roosevelt, the thirty second President of the United States, the President who signed the Social Security Act into law, and the President who saw America through the Great Depression, said in his second inauguration speech: "The test of our progress is not whether we add more to the abundance of those who have much. It is whether we provide enough for those who have too little."
Like Madison and Jefferson, Franklin D. Roosevelt understood progress is not giving more to those who already have an abundance of wealth. How we move forward as a nation is by providing opportunities for those who have too little. In other words, Roosevelt believed the health of our nation depends on reducing income and wealth inequality.
2015, Senator Bernie Sanders of Vermont, Presidential candidate 2016, and an outspoken advocate for reducing current levels of income inequality: "Today, the top one-tenth of 1% owns nearly as much wealth as the bottom 90%. The economic game is rigged, and this level of inequality is unsustainable. We need an economy that works for all, not just the powerful."
The Founding Fathers and Roosevelt would be horrified to learn these statistics. When Jefferson worried about, "the consequences of this enormous inequality producing so much misery to the bulk of mankind," he was concerned with a "rigged game that led to unsustainable levels of income inequality." Jefferson was one of the greatest thinkers in American history, and he shared Sanders' concern. Madison cautioned against laws that allowed "the immoderate and unmerited accumulation of riches," something Sanders correctly points out works for the powerful and not for all. Sanders would agree with Roosevelt that we need to "provide enough for those who have too little."
"This is what class warfare looks like: The Business Roundtable - representing Goldman Sachs, Bank of America, JP Morgan Chase and others - has called on Congress to raise the eligibility age of Social Security and Medicare to 70, cut Social Security and veterans' COLAs, raise taxes on working families and cut taxes for the largest corporations in America." Sander, 2015
Do you think the members of the Business Roundtable care more about American citizens than Franklin Delano Roosevelt? Roosevelt instituted Social Security to help keep millions of citizens out of poverty and destitution. Neither Roosevelt nor Bernie Sanders think class warfare is best for the American people or that raising the eligibility age of Social Security and Medicare benefit working families. Raising these do, however, benefit members of the top 1% like those on the Business Roundtable. Reducing these programs as a way of keeping them from running out of money, as opposed to asking wealthy individuals and corporations to pay a bit more in taxes, will only serve to increase inequality.
Members of the Business Roundtable also want to "raise taxes on working families and cut taxes for the largest corporations in America." This is the opposite of what Jefferson and Madison advocate. Jefferson states, "Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise." Madison recommends something similar when he suggests there should be a "silent operation of laws, which, without violating the rights of property, reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort." It is clear both Jefferson and Madison would want to lower taxes on working families and raise taxes for the largest corporations in America, which would reduce income inequality.
Isn't it interesting that the main authors of the Declaration of Independence and our Constitution, the document wealthy conservatives so often cite as a reason to maintain their advantages, were progressives and believed in a progressive tax system. The Founding Fathers would never have supported a system containing all the tax loopholes currently existing in this country; loopholes allowing the rich to pay a lower tax rate than the lower and middle classes. Even Warren Buffet, the second richest American, says it is not fair that he pays a lower tax rate than his secretary.
What can we do about income inequality?
1. Invest in infrastructure. If we invest in infrastructure it will create good paying jobs, many of which do not require a college education.
2. Get big money out of politics. If there was no big money in politics, politicians could fight income inequality, because they would not have to cater to the interests of wealthy and corporate sponsors.
3. Invest in education. If America invested in education there would be more well-educated people, who could get more highly skilled and higher paying jobs.
4. Revise our progressive tax system. If we had a non-broken progressive tax system it would eliminate loopholes and tax breaks for the wealthy. If we had effective ways of taxing the rich we would have much more money to spend on public goods. Does Warren Buffet pay more than you in taxes? Yes, he does, but he pays a lower percentage based on his income.
5. Increase the minimum wage. The more money minimum wage workers make, the less income inequality there is, because these workers are no longer below the poverty line.
6. Vote for candidates who support the policies. If you want to make a difference you can vote and volunteer for candidates who are not backed by corporations and billionaires, candidates who will fight against income inequality.
The Founding Fathers didn't know about the Gini Coefficient, but they understood what income inequality was. Income inequality is not a new problem. We have been faced with the struggle against wealthy and corporate greed since the founding of our country. We have not seen today's level of income inequality since the Great Depression, when Franklin D. Roosevelt was president. Luckily, American citizens are beginning to understand the injustice of income and wealth inequality. Isn't it time we heeded the Founding Fathers' warning and began electing legislators, like Bernie Sanders, who want to reduce income inequality and have our government take care of the needs of the many instead of the wants of a few? So, next time you hear someone try to portray Bernie Sanders as some radical socialist, or even a communist, you can tell them no. His thoughts and ideas are far more closely aligned with the principles our great nation was founded on than any of the so-called conservative presidential candidates. You hear a lot about income inequality these days, and now you know why.