In recent years, the massive growth of income inequality in the United States has served up some startling statistics. The richest 1 percent of Americans have now amassed more wealth than the bottom 90 percent. Since the Wall Street crash in 2008, nearly half of all new income has gone to the top 1 percent, while more than 40 percent of American households cannot afford basic necessities without going into debt. In 2017, CEOs for the top 350 companies in the U.S. averaged $18.9 million each in compensation. Meanwhile, the share of national income for the bottom 90 percent continues to decline.
The Virginia Republican Party Creed states that “the free enterprise system is the most productive supplier of human needs and economic justice.” But the question is, justice for whom? If we’re talking about wealthy CEOs and Wall Street bankers, the answer is clearly yes. If we’re talking about the rest of America, not so much.
Is the free enterprise system currently providing economic justice when it comes to the supply of pharmaceuticals in the U.S.? If you’re one of the 30 million Americans struggling with the 300 percent rise in the cost of insulin in recent years, you probably don’t think so. Profit margins for pharmaceutical companies and salaries for CEOs continue to soar while many Americans struggle to afford critical medications.
Is the free enterprise system providing economic justice for teachers, social workers, and other dedicated professionals who serve the public in demanding roles that require a costly education? In 2017, the compensation for the top 25 Wall Street hedge fund managers totaled more than $15 billion, which is nearly double what all 140,000 kindergarten teachers in the U.S. earned last year combined.
Perhaps we should ask the millions of minimum wage workers who work long hours and two or even three jobs to make ends meet. Some Walmart employees may not think they are receiving economic justice. In 2017, Walmart’s CEO made $22.8 million—nearly 1,200 times more than the average store employee. An estimate by Democratic Staff of the U.S. Committee on Education and the Workforce surmised that Walmart’s low entry level wages in past years may have cost American taxpayers more than $6 billion a year in programs such as food stamps, Medicaid, and public housing.
The same may be said of other top companies. For the past two years, Amazon has paid no federal taxes. This year, the company will receive a $129 million tax refund. Amazon made $11.2 billion in 2018—up from $5.6 billion in 2017—but will benefit from tax credits and huge tax breaks for executive stock options that eliminate the company’s federal tax burden. How does your tax refund match up?
This country was built on a robust system of capitalism driven by market transactions. Most would agree—Republicans and Democrats alike—that a system that rewards innovation and resourcefulness is a vital underpinning of the American dream. The question then becomes, what level of government intervention, market regulation, and taxation for our wealthiest citizens and corporations is appropriate to maintain economic justice?
The Democratic ideal strives for the greater good—for individuals, our communities, and our nation as a whole. The vast inequities we are seeing in wealth accumulation are not economic justice, but point to the need for sensible measures to enable hard-working Americans to share in at least a portion of the fruits of their labors. In their enthusiasm for free enterprise Republicans have forgotten the American family. Debt-inducing tax breaks to the ultra-wealthy and corporations at the expense of average Americans is not economic justice. Economic inequality is killing the American dream and we should not fool ourselves otherwise.
Editor’s Note: this op-ed originally appeared in the Culpeper Star Exponent, and has been reposted here with the author’s permission.
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