Brooks: Minimum Wage – not a problem, Income Inequality – what a sham! The Poor just gotta try harder!
David Brooks published the Op Ed essay “The Inequality Problem” in the New York Times (Jan 17, 2014). His views are a stunning spin on the crisis in believability that has come up since a number of blogs have been discussing the furor raised by Saez and Piketty’s original studies (updated every year since 1999). I am proud to say that LastTechAge has been one of those blogs, pounding this issue since 2011.
We go through Brooks’ argument here. Since Mr. Brooks has an amazing tendency to soften his story by changing the on-line version of columns published in newsprint, we are obliged to refer to his print edition effort. Brooks’ strong views represent a lot of the Republican rhetoric heard around, nowadays. These are his own; probably they’re too moderate for the far right.
The full, original print text is in the LastTechAge PDF here.
In the following paragraphs, click any box to see a larger image.
David Brooks’ First Issue
This is unhelpful, in Mr. Brooks opinion. But to help what? No definition ever of what the “issue” is that is the topic of the essay! The issue seems to be income inequality (title of essay) but, uh, framing this issue as income inequality is to a bad thing. How can we know what Mr. Brooks actually wants to discuss?
He says: You guys match the growing wealth of the top end 5% with the bottom end growth of people stuck at the margins. The top end is a mix of huge compensations at Wall Street, the fact that superior people tend to marry each other, and then there is the superstar effect – superior people who achieve global gains. His reasons why more and more people are getting stuck at the bottom is as shown. But he contends these two are not related except through an income inequality misconception.
Comments on issue 1.
There several basic issues that must be dealt with. First and foremost is what Saez and Piketty were showing. Has Brooks even looked at their stuff?
A brief review – S&P work with the full income that flows through the US population. 100% of income is always present, irrespective of the ups and downs of GNP, stocks, et cetera. Now, picture a large pool filled with 100% of its water (income) with a full 100% of swimming children (workers) splashing about.
We must keep track of various fractions of both the water and the swimmers – 2 different percentages.
The graph shows the Saez data for the top earning 10% of the population (pale blue) and the bottom quintile of incomes from the U.S. Census Bureau. Note the break in both trendings around 1980.
This is what Inequality really means – The income flowing around the ‘swimmers’ has been diverted to those at the deep end where swimming was already pretty fine. The ‘kids’ at the low end of the pool get successively less almost every year.
Brooks focuses on that 5% of all swimmers who have the most per person space in the pool. It is also true that the 10% of the swimmers with the largest share of the pool (top 10% of the earners) actually possess about 50% of the pool (50% of the annual income), up from about 37% in 1980. But these are misleading data. He is wrong that all those are actively grabbing ever greater share – nowadays all but the top 1% are either being pushed into shallow end or are treading water.
Zero Sum Game – Actual income has nothing to do with it. There will always be a 100% income made in the economy. If somebody’s fractional share increases, someone else feels a drop; indeed, a zero sum game.
The inequality part is from the fact that people earning median income and less have, today, lost the financial wherewithal to compete effectively. The ability for self improvement diminishes as income share drops. We who complain that decreased access in opportunity follows decreased in income share are not saying “They get more than I do,” we say “They have ever more income to make contacts, form useful alliances, get recommendations and better jobs.”
And we though LastTechAge was the first “primitive” to apply Zero Sum Game verbiage to our growing inequality! David, if we are primitive are you stupid? Check the estimated annual costs to attend (2nd tier) University of Michigan. How could a family with median $50,0000 income send their children here? How could a family making over $1,000,000 not afford it?
David Brooks’ Second Issue
Having established that inequality is not the cause of it (whatever it is), he makes the point that raising the minimum wage from $7.25/hr to $10/hr (a full time job would pay $20,000/yr) is not the wrong target for the solution (to…?). This would make sense only if the Minimum wage were meant to shift the family out of poverty.
But this is not why the MW is on the books. It is to give some security as a minimum income. I say: it is to keep people from starving to death. From the “get-go,” MW was to provide survival level support, not change economic status – not raise people out of poverty. The change would be to 85% of what a family of 4 need to live at poverty level. Single parents with children need this. Especially if they only find part time work.
Is it really ineffective policy to allow food for children to develop into fully functional humans? (…to mention one use of minimal economic security.)
David Brooks’ Third Issue
Brooks is partially right. There has never been a time in human history when every person had the same income. The modern US income pump is not just responsible for income disparity. It has slowed maybe killed traditional American upwards mobility.
David Brooks’ Fourth Issue
If we say that the American ultras have stopped upwards movement and killed aspirations of the lower class, we”needlessly polarizes the debate.” Okay! The Koch brothers did not help found the Heritage Society and Cato Institute in the 1970s so that our very active income pump could be switched on in 1980. Of course not!! Saying this is so disruptive. Why, even Republicans are signing on to doing something or other to enhance mobility, even as they offshore more industries, outsource more jobs. And none may call it treason.
So… we must stay away from divisive class structure topics. No secondary issues / statistical byproducts like class inequality. We are going to fix a list of broad-based societal problems by not addressing root causes.
- How do you fix bad schools without taxes?
- How do you get jobs when they are being shipped away?
- How do you give despairing young men hope for their future?
- How do you keep families together when lack of support and income are one of the main reasons for split ups?
If you really do not ask these, then David Brooks wins by getting you to ignore one of the fundamental causative agents for his list of broad societal ills.
Class warfare is always claimed by the uppers when they detect the lower moochers complaining too much.
It is never mentioned when evidence appears that the very top economic levels in our society is busy structurally changing life to establish unprecedented hereditary domination.
I wish this kind of post felt better to do. Are we perhaps facing the closing stages of a stagnitization that has been building for 35 years? When someone like David Brooks writes this way, does it indicate we probably are in our Last Technical Age? Okay, maybe not for the human race, but for America?
Charles J. Armentrout, Ann Arbor
2014 Jan 18
Listed under Economics …thread Economics > Inequality.
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