For many Americans, one of the most important issues in the current national election campaigns is their ability to earn a living. Both parties have taken on jobs issues, in their separate ways. Economics already counts highly in this election: we are hearing about income inequality, the wasting of the middle class, the pitiful growth in gross domestic product, and the accumulation of wealth into the fortunes of a few individuals.
The candidates, and the media, concentrate on jobs and income. Yet behind the declines and stagnations that we have suffered in these are changes in the distribution of wealth in the last 40 years. Wealth is a form of what economists call capital. Those who own it receive “rents.” Capital becomes wealth when its rents are greater than enough for its owner to live on. When the owner isn't just a playboy, these extra rents are reinvested in more wealth, which then keeps growing. Wealthy individuals keep getting richer.
Most Americans, even the middle class, have no such wealth. We try to live on our earned incomes and save some capital. We hope that, as we become more productive over our lifetimes, our incomes will grow. This is what is failing us now – wages are not growing, even though workers are producing wealth at greater and greater rates.
Where is the extra wealth going? Not into higher wages, but into the estates of a small group of people amounting to 0.1 percent or 1 percent of Americans.
Senator Pat Toomey, in his book The Road to Prosperity, writes that this is nonsense, because even though incomes of working groups stay stagnant, individual workers in those groups would still enjoy raises due to promotions. He seems to think that employment works like a pyramid scheme, everyone continuously getting promotions and raises.
With a Harvard degree in political science, Senator Toomey knows better. His agenda is the status quo, the very wealthy absorbing the fruits of growing productivity and getting wealthier, and the middle class declining. We really don't need a senator for the so-called Club for Growth, but one who cares about what middle-class Americans need.
Joe Sestak, Democratic candidate for Senate in the 2016 election, is also a Harvard graduate in political science (PhD this time) and has also written a book, Walking in Your Shoes to Restore the American Dream. He explains how the Dream can be restored by proactive programs such as in education, increasing workforce skills, providing opportunities for small business, and, yes, raising the minimum wage. The status quo and the super-wealthy get small shrift in his program, but the middle class would prosper. It would be about time.
Paul Kronick
Kennett Square
(3 votes, average: 2.33 out of 5)
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