In today’s Daily Kos, the great labor reporter Laura Clawson examines the wealth of an average worker compared to Sam Walton’s offspring. According to research by the AFL-CIO, the six Walton heirs total wealth is the same as that of 52.5 million American families (42.9%). The study points out that some families have negative wealth. Adjusted for that, the number of families needed to equal the Walton wealth drops to 1.7 million. However, that adjustment also indicates that many American families have issues with “negative wealth.” Clawson also notes that a Walmart worker being paid $9 per hour would have to work 1,036 hours to make what the company’s CEO Doug McMillon makes in one hour.
Do the Walton heirs deserve to be very rich? I believe they do. Their father created an innovative business model. The bigger question is how much wealth should anyone – rich heir or CEO -- have. What is the cost to society of an economy where a few are very rich and secure and many working class and middle class families are falling behind and less secure?
Since 2008, young workers, including college graduates, have struggled to get a good job. Writing in Huffington Post, Jillian Berman examines this problem with a focus on college graduates getting jobs that do not require a degree, which usually means that they pay lower wages. Young workers are earning less and building wealth much more slowly than the previous generation. Then Berman adds the real problem: debt. College graduate now hold student loans that are more than twice what a graduate would have had in the early 1980s.
Berman questions whether young college grads will ever dig out of this hole. I’m a little less pessimistic. I think the current generation on average will not enjoy the opportunities my generation did. However, many will succeed on the individual level because they will practice good career management. It’s easy to give into despair and say that things will never get better. Several of my younger clients have had to take first jobs that were less than they expected. But they kept looking for something better. They targeted and improved the skills they want to use on the job, and they were able to get better jobs. Looking for work is never easy, but in a job market like this one, the only way to get ahead is to keep looking for a better opportunity.
The former Labor Secretary asks a good question: Can one worker or family have too much? This is a moral question, not a legal one. Of course, it is legal for a CEO to make a ratio of 150:1 to the average worker at her company. Is it right? At a time when most of the jobs being created are low wage, we need to think about wages and who benefits most. That is what Reich explores in his commentary.
To put the question another way, how can we justify a situation where six heirs of a man who was a business genius (Sam Walton) hold more wealth than the bottom 40% of all Americans? This is not just a question for the bottom 40% (more than 100 million Americans). Wage disparity makes us all poorer because we have become a society that lives by fear rather than hope. This gap between rich and poor cannot continue to grow as it has over the last 30 years. Sooner or later, the cradle will fall.
We fret about unemployment in the U.S., but we seldom consider the problem in other countries. Huffington Post linked to an article at 247wallst.com that lists European countries with the highest unemployment. Japan and the U.K. have slight higher unemployment. Countries like Greece (26.4%) and Spain (26.3%) face much higher, rates which are similar to estimates for the U.S. in the Depression of 1930s.
What if the U.S. had 25% unemployment? We would have a major problem. Even at the current rate, many job seekers are having problems finding jobs. Worse still, wages have flat and in some cases declined. Like Paul Krugman, I believe the government should play some role as an employer of last resort. It’s not a matter of the clichéd attack on Keynes that one worker fills a hole and another fills it. There is work to be done: infrastructure, public safety, education, and healthcare. We need to invest to build good country where everyone has opportunity. We have the wealth. We need the will.
[On Sundays, this blog explores diverse issues in Sabbath.”]
School Closings in Chicago – Reform or A Trojan Horse?
Today’s Chicago Sun-Times features a great analysis on school closings in Chicago. A chart that accompanies the article shows that students from over 1/3 of the will be moved to schools that are ranked no better or even worse than the ones they are leaving. The chart also indicates that several of the schools have met performance goals. Is this how education is “reformed”?
Mayor Rahm Emanuel is featured in a separate article in the paper. Unlike those officials who say the schools are being closed because they are “underutilized,” the mayor only talks about giving students more opportunity: “We look at it and viewed it as what we can do to have every child have a high-quality education regardless of their neighborhood, regardless of their circumstances, regardless of where they live.”
If the mayor is sincere in these words, he should be very troubled by the information put forth by the Sun-Times. While some students will be moving to much better schools, many more are moving to schools with similar performance ratings. There is also a question of cost. According to the mayor’s most vocal critic Karen Lewis, head of the Chicago Teacher’s Union, it will cost the system $1 billion dollars to close the schools, which is the same amount the system claims is its current deficit. Lewis and her colleagues contend that this round of school closing is a Trojan horse that the mayor and his allies are using to open even more non-union charter schools.
No one wants children in poor performing schools. No one wants to waste money heating and maintaining schools that are half empty. However, it’s hard to trust politicians in any city when we see how charter schools can be new tools for the connected to wash each other’s hands. Over the past few months, the Sun-Times has published several articles about conflicts of interest at Uno, Chicago’s largest charter school organization. Uno’s head was a key player in Mayor Emanuel’s campaign. Will Uno benefit from the school closings? That would be an interesting question to have answered.
Here’s another question: Why can’t Chicago fund its schools? I grew up in Cleveland and saw that great city’s decline first hand. Over the last two years, I’ve been to Detroit twice and have experienced to a small degree that city’s challenges. Those cities have an excuse to close schools. They embody the rust belt and millions of lost jobs that have left northern industrial cities. Chicago doesn’t have that excuse.
I attended a production at Chicago Shakespeare Theater yesterday. Before going to the play, a friend and I rode Navy Pier’s Ferris wheel, which offers a magnificent view of the skyline, a panorama of skyscrapers that are filled with business that are making money. I could also see large condo developments in the south Loop, all of which were built in the last 10-15 years. How can schools be poor in a city that is so rich? Why can’t we have schools with small class sizes if our city has so much wealth circulating in it? We need to ask the mayor and his staff some of these questions. All children do deserve equal opportunity. Whacking at schools with an axe doesn’t seem to be the best answer, just the most simple answer.
Writing in Yes! Magazine, John Robbins explores the deep meaning of wealth. Robbins, an heir to the Baskin-Robbins fortune, rejected his family’s money because he wanted to make his own way in the world. He notes studies and common sense evidence that show people with more money aren’t necessarily happier. Children today are more anxious than they were in 1950. We worship GDP as a measure of our wealth while ignoring all the harm that comes with a philosophy of more, more, more. Robbins cites economists, including Joseph Stiglitz, who are designing alternatives to GDP, new ways to measure real wealth. Hopefully, we will find a new way to judge our economic success so it fits our real lives, not just theories to please Wall Street.
Click here to go to John Robbins’ website, which has many tools for living a better life.