Young people find it hard to believe when I tell them about growing up in the 1940s and ’50s, when an entry-level job, even at a gas station, made it possible to earn a decent living. It was a time when working man was synonymous with virtue. Not so anymore. Working men and women today are considered chumps by those who preach the high-finance version of success. That people don't earn enough to support a family is considered a character flaw instead of what it is: contrived inequality.
Over a period of four decades, the essence of work has been systematically devalued, while the worth and legislative influence of capital in the financial sector has soared. Wall Street functions more and more like a casino.
From the early 1900s until 1970, wages for working people kept rising. We were one of the most equal opportunity countries in the world (unless one was a minority, but that’s another article). When I was in grade school, corporate taxes amounted to about $1.50 for every dollar from individuals. Today corporations pay about 25 cents in taxes for every dollar paid by individuals. The tax burden has shifted dramatically because of lobbied influence. Wages for working people have suffered stagnation since the 1970s while CEO compensation has increased more than 725 percent. The result is that about a third of our citizens are now poor.
There is nothing divine about wages or free markets. These numbers do not come from God. They are not shaped by virtue. Wages in many cases are not remotely in sync with the actual value of the work they represent. Wages express relationships of power, or a lack of it. Those with authority and control are insulted by hourly wages—they get salaries, bonuses, and stock options.
In Antifragile: Things That Gain from Disorder, Nassim Nicholas Taleb makes a compelling argument that some aspects of our society thrive on disorder and some failures are necessary in order to compensate and thus grow stronger. He makes clear in clinical fashion that actions have consequences and that we learn more from failure than from theory. Fragile systems weaken with error. Anti-fragile systems gain strength from stressors in the same manner that our bodies protect themselves by building up immunity from exposure to germs. America's workforce should be anti-fragile too, but it's not. Let me explain why.
We human beings are viscerally wired to be wary of free riders. We are so sensitive about the issue that we are easily manipulated emotionally. This is why we overreact with penalties for failure that cost the public more than they cost the individuals we think we are punishing. It's why stinginess prevails when it comes to helping impoverished families.
Elsewhere I have ridiculed Newt Gingrich as being a hypocritical politician with bad ideas. But just as Taleb has provided us with a face-saving aphorism, Gingrich has given us the operative metaphor to redress raging inequality. During his run for president, he said we need to replace the social safety net with a trampoline. It was, and is, the most sensible and stupendous thing said about inequity in decades. We need to see to its creation before the buzzards strip us clean to the bone.
But for now, nothing is more important, in my view, than the repatriation of work. We begin by imposing an exploitation tax. Here is how it works:
The notion that raising wages costs jobs is a myth sustained by unrelenting mantras, but it's still a myth. If business owners want to avoid taxes, let them do right by their employees and avoid an exploitation tax. It's long past time for American citizens to rescind the right to exploit without penalty.