Why does it matter that the earnings gap between the richest and the poorest is surmountable? And that the poorest earn a living wage? Because democracy depends upon the fairness of the economy.
The best example is in America. Over the past 50 years, American CEOs have gone from making 21 times what the typical worker earns to 351 times what the typical worker earns. Put another way, since 1978 CEO compensation, which has expanded by 1,322%, has outpaced the growth of the S&P stock market.
When wages become this lopsided, middle-class hope of material goods and social status withers on the vine.
In the wake of the Wall Street bailout after the 2007-08 global financial crisis, hope died altogether for some Americans — people who watched, while they lost their homes, as their government stepped in to rescue financial institutions deemed “too big to fail”.
Analysts didn’t take the problem all that seriously. Measured by real GDP per person, Americans are the richest people in the world, and while the real wages of the lowest quarter of earners didn’t increase at anywhere near the rate of the top 10% of wage earners (4% v 16%), everyone’s boat was lifting, so why should anyone complain?
However, this perspective doesn’t account for inflation and the resultant stagnation of real wages for those at the bottom end — indeed, real average wages in the US today have about the same purchasing power as they did 40 years ago. It also doesn’t consider what happens when your material circumstances are stagnant, but those of the wealthy keep improving: feelings of relative deprivation, of a loss of morale and hope, of humiliation experienced from failing to “make it big” in a culture where earnings are the definition of success, of the shame from having bought into the American dream, when the reality is that it isn’t for you.
For many in the MAGA movement, this is where the rage — and the thirst for compensation that would restore dignity in their own eyes and that of others — began. It took the form of rolling the party elites so the party would adopt their prohibitionist policies on abortion, despite everyone knowing they are electoral poison.
But winning fairly was never the goal of the MAGA movement. The point was that, having abandoned hope of ever being granted their dignity economically through the provision of secure and well-paid jobs, they’d found another way to have their concerns and interests recognised by the political party that claimed to represent them.
Is there a lesson here for Australians? Certainly. Our income inequality problem is less extreme than that of the United States, although considering that the US is now one of the most unequal societies in the developed world, that’s not saying much.
We’re not that far behind, though, when it comes to the disparity between CEO and typical worker pay, which sees the chiefs of Australia’s biggest companies on compensation packages 78 times that of a typical worker. From the mid-1980s, this was a result of real executive salaries growing substantially faster than average real wages.
All this, too, before the current cost-of-living crisis, in which average Australians are battling significantly elevated housing, heating and food costs. Meanwhile Australian companies like Qantas and the big supermarket chains deceive, price gouge and otherwise treat their customers with contempt, while their CEOs and shareholders enjoy healthy payouts and profits.
This is why my blood ran cold when I read the pitch that Thomas Sewell, a leader in Australia’s neo-Nazi movement, uses to attract followers:
They are going to see that they are never going to afford a home. If they do, it’s going to be in the middle of nowhere. They are going to be spending two hours in traffic to get to work in some dead-end job [that they] had to go to university for four years [to get]. They are in all this debt. The whole thing is geared against them.
Folks like Sewell are finding a deep vein of economic disenchantment in Australia, according to writer and researcher Lydia Khalil, with white right-wing extremist activity on the increase, including in groups with connections to white nationalists in the United States.
This makes it critical that Australians recognise that democracy is under siege, not just in the United States but across the Western world. Far from the “end of history” predicted by Francis Fukuyama, for the past 14 years, the number of democracies in the world has been declining every year.
No matter how well you’re doing personally, now is the time to actively push Australian federal and state governments — and to support union efforts — to reduce the gap between haves and have-nots. This includes staunchly opposing the stage three tax cuts, which will worsen income inequality. And if strikes become necessary to ensure wages rise for those in the middle and below, we support them and bear the inevitable inconvenience with grace.
The loss of economic hope is something happening on both sides of the political spectrum. And while the solutions being promoted on the left are more collective and empowering, and eschew violence, they too could have an impact on democracy as we’ve known it. But we’ll talk about that next time.
The stage 3 tax cuts and the ushering in of the flattest taxation regime in modern history are set to have the most dramatic effect in enhancing levels of inequality, but the degree of debate about this immoral rationale has been pitiful.
We fundamentally change our attitude as a people to inequality if those tax cuts pass, and if they pass under the watch of an ALP government, well the cooption of our public sphere by corporate interests really does become absolute.
We can’t have Thomas fkn Sewell being the one cutting through the bullsht with a voice of reason… that makes my blood run cold too.
However, I’m afraid this article speaks to the hugest blind spot in our populace. I keep banging on about the wealth inequality / corruption of democracy dynamic being the single most important issue humanity faces, but even people like my brother seem to think organising a coal blockade in Newcastle or something like that is the first step.
We don’t achieve a damn thing until we eat the rich, but nobody knows it.
I said many months ago that the rental and housing crisis would provide fertile ground for the Hard Right. Now, it looks like the Hard Right are catching on. We disparage the MAGA’s as being a bunch of brainless, Christian, NRA-supporting rednecks, but ignore their very real grievances. The result could be a civil war in the US. Right now, the powers in government are ignoring the renters, the mortgage-stressed, and those barely clinging onto a life worth living in favor of magic submarines. A Trump will arise here if this continues.
As for eating the rich, my suggestion of a Gina cookbook was KO’ed by the modbot.
And here we have both sides of our parliament crawling head first up the AUKUS fundament, and signing away our sovereignty to the US political duopoly. Democracy is in decline because our “leaders” don’t want it. Democracy threatens their power and egos.
Agree about the MAGAs, Frank. Don’t agree about the civil war. The US state will turn its guns on its own citizens before it comes to that. They’ve done it before. Four dead in Ohio, remember?
Chicken or the egg; how often have we observed in the RW MSM real and/or confected crises, but bypassing real issue e.g. reflex blaming of ‘immigration’ on house prices, employment, environment, ALP etc. to deflect from good policy, improved wages/awards and legislation; too easy in manipulating ageing electorates.
Jesus Christ, Kimmo! I don’t want to eat em They’d be so fatty! Yuk! Heart attack food, the rich. And the glam skinny ones would be tough and stringy like an old boiler chicken. Can’t we just use em for worm farms or compost?
Ahhh what a breath of fresh air. Leslie Cannold does us a service in this brief synopsis of some of the indigence that stems from Planet America. The indigence is of course an ethical paucity in our economic system and its sapping of human morale for whole swarths of us. Leslie calls for us to ‘support union efforts — to reduce the gap between haves and have-nots.’ Yes. We need this sort of calling to account for the Community. Go girl (woman)!
The issue is, and will continue to be, the lousy taxation policies prevailing in this country. For example, the corporate sector would love to have a GST rate of 15-25% (by way of example) on every consumption item (including rent) while virtually paying next to nothing regarding income tax. I noticed that the ‘GST issue’ was raised by a Crikey correspondent a couple of weeks ago regarding its “fairness” There is nothing fair about the GST. Everyone pays the same tax regardless of their income. Apologies for stating the bleeding obvious. Cheers.
That’s just one of the issues. How could we continue with such lousy taxation policies without such concentrated media ownership? It’s all chicken-and-egg until you question the very validity of capitalism, a system in which the rich get richer by default.
R > G, as Piketty painstakingly demonstrated to the resounding applause of crickets.
The only way we could persist with capitalism is to realise the rich are the problem, and to make in measures to pit democracy against them.
All far too late now, of course…
The Left in this country are divided to non-existent. They are niche-issue sycophants. Look how less than a dozen Lebs, who looked frankly like a couple of barbershop quartets, with anti-Gay, transphobic views and Christian beliefs landed or descended in Newtown, spewing forther their hatred and filth in public. Newtown is Gay central or trans central. Yet these Christian Arabs were able to get away with saying what they said when 30, 40 or more years about there would have been 500-600, if not, 5,000-6,000 Communists racing around the corner with their hammers and sickles to give ’em what for. This is what the Left has become now and you need to realise this first. They are not fighters. They are whingers.
A whole salad bowl of warm lettuce leaves.
Perhaps “The Left” understand that lateral violence does nothing for fixing inequality.
However, some (?”The Right”) fully understand how to avoid responsibilty by displacing blame onto the other.
For an explanation for why the increase in inequality read “The Sociopath Next Door ” (Stout). The enemy(s) of common good is not driven by ideology. You cannot debate personality disorder.
Is the technique for modern winning of hearts and minds to feed personality disorder? Newscorpse are experts. Watching insiders it does seem like those that have worked for the corpse have no ability to be reasoned with ..
I am no expert, but I understand that PD cannot be treated (PD being a description of who the person “is”). Apparently PD can only be managed (ignore and don’t engage with unwanted behaviour). However like attracts like and the mnd boggles at what some “newsrooms” must look like.
We really do need a RC in to why a foreigner owns so much australian media. Not that I am suggesting there is any link between who loads the bullet and who fires the gun.
Rather than stylise it capitalised with scare quotes, how about this…
Some elements of the left (completely behind) recognise that it’s not just okay to punch a n4zi, it’s your duty. Ask Richard Spencer. It’s the paradox of tolerance.
I’m all for vertical violence in the form of figurative guillotines, but that’s a pretty forlorn hope with such a big gap to reach them and such little spirit of 1789 around.
I am off to buy some Cleckheaton.
Wonder how they’re doing.
We don’t seem to have many takers for an Australian made yarn
https://wangarattawoollenmills.com.au/cleckheaton-1/
Available at Spotlight. Secret to finishing a knitted garment is to never give up. Might take ages, but just keep at it.
Knitting is having a bit of a renaissance, driven by social media (true). Light on the Hill has not yet gone out and there is every possibility that seats will be needed in the public square.
Seriously?