It’s a common argument against socialism (or what is perceived as socialism): “We can’t have complete economic equality because it’d remove all incentive to work harder and be innovative.” And to a certain extent, that’s completely true. Why would I work harder to take on a position of more responsibility and risk if I didn’t make more money for it? Certainly there are some out there who’s egos alone would push for such a promotion, but at some point most people would ask why you’d want to be the CEO when you can make the same amount of money as being the janitor.
Yet, a similar argument that’s rarely brought up is that low wages have the exact same effect. After all, if people on the “fry line” or “flipping hamburgers” sees their managers, even general managers, struggle to pay bills, sees them on government support, sees them struggling paycheck to paycheck, then why work harder to take on that responsibility? If you tell someone who struggles to put food on the table that with 5-10 years of real hard work they can finally break through to the lower-middle class, what incentive is there in working harder? The more the middle class shrinks and the less meaning there is to being middle class (in that it doesn’t really provide as high a standard of living as its used to), the less incentive there is to work harder or be innovative.
Thus, it seems there’s a happy medium to be had, one where wages are staggered enough to provide enough incentive to work harder and be innovative, but pay well enough to provide enough incentive to get to that new position.
And that, kids, is why the minimum wage debate is so pointless. We’re debating over the minimum a person earns, which impacts about 3.9% of the population. Not that I’m against raising the minimum wage – we need to – but that in the best case scenario, raising it will give us one to two years of economic growth. After that, we’re back to debating on raising the wage again. And raising the minimum wage would inevitably send some jobs overseas (jobs that would have gone eventually, but an increase in minimum wage would be the tipping point). It wouldn’t be the doomsday scenario of conservative talkshow hosts, but it also wouldn’t be the economic utopia of liberal think-tanks. Raising the minimum wage, while necessary and overall good (even with some negative consequences), is focusing on the wrong problem.
See, our economic problem isn’t that our minimum wage is too low, it’s that our median wage is too low. Now, ultimately, our problem is greed, but you can’t legislate people to be virtuous and to give up their greed. You can, however, create an environment where they can’t practice their greed, or where you can limit their pursuits in the name of greed. After all, I can’t legislate someone from hating another person, but I can legislate stopping them from acting on that hate. Likewise, while I can’t prevent people having an attitude of greed, I can prevent them from acting on that greed. The reason our median wage is so low is because we’ve allowed people to act on their greed, and it’s time to stop.
When we allow economic inequality to continue, when we allow the poor to become poorer, when we allow the middle class to disappear quicker than the polar bears, we create an environment that inevitably leads to a revolution of sorts. The times we face are hardly unique to world history. Economic inequality preceded many horrible events in history, such as the French Revolution and the Bolshevik Revolution. In both cases income inequality erupted into violence. But we often forget that income inequality and its crippling effect on a nation preceded the election of Benito Mussolini and Adolf Hitler. Both Italy and Germany suffered from high income inequality prior to the rise of fascism, and Germany suffered from a national inferiority complex due to losing WWI (which radicalized their fascists into Nazis, a more extreme version of fascism). A combination of national pride, blaming of the “other,” and workers not making enough to live led to the eventual conquest of fascism.
Fast forward to the modern era and we’re on the brink of seeing a revival in fascism, both in Europe and the United States. In Europe the far-right parties such as UKIP (United Kingdom), Front National (France), Law and Justice (Poland), Danish People’s Party (Denmark), and many other nations are experiencing an increase in nationalistic movements. These movements typically focus on the struggle of the working class, but tend to blame immigrants rather than the ruling elite (though the ruling elite are still blamed, the vitriol is saved for immigrants). Within the United States we have Donald Trump on the verge of victory in the Republican Party and a legitimate shot at winning it all. Fascism is alive and well, but it doesn’t appear ex nihilo. Rational people who lead comfortable lives don’t just wake up one day and go, “You know what, I hate immigrants, the poor, and want a revolution.” Fascism can only find berth in a revolution, and a revolution only arises out of discontent. The breeding ground for fascism – lack of economic growth, stagnation in the real economy, lack of motivation to move ahead, a loss of hope – are real issues. Failing to adequately address and fix those issues will almost always lead to horrible results.
We’ve had 30 years of globalization policies that have all but destroyed our economy (as well as many other economies). There’s a popular video going around about a Disney worker losing his job and having to train foreign workers to take over his job, workers hired by Disney because they’ll work at a cheaper rate. Manufacturing jobs lost in the 80s and 90s due to recession went overseas and will never return. Wages have stagnated and fallen. We have an entire generation today that is worse off upon graduating high school and/or college than generations before them, which is a first in American history. A populist backlash – and make no mistake, fascism is populist, as is socialism – was inevitable. That backlash has taken on the form of Trump in the United States, but resembles different leaders and candidates in other nations.
The above are all very real problems. It’s a problem that a job can be sent overseas to near-slave labor (which doesn’t benefit the worker in that country or the worker in the US). The wage gap in America is a massive problem, allowing the super-rich undue influence in politics, which secures their position while lessening the position of the average voter. By ignoring economic justice, by removing our economic policies away from doing what is right, we’ve created a very dangerous situation, a breeding ground for one of the worst political ideologies to come out of the Enlightenment.
What, then, are we to do?