by Heidi Harrell – Asst. Opinion Editor – firstname.lastname@example.org
Income inequality will be the death of the American economic system.
American CEOs earn more than any other worker in the world. If corporate CEOs in America humanely accepted slightly lighter paychecks, income would be distributed much more evenly throughout the country.
Forbes recently reported Wal-Mart CEO Mike Duke earns $11,000 an hour. Still, 45 other American CEOs earned more than he did in 2012.
American chief executives earned an average income of $12.9 million in 2011. Duke took home nearly double that, earning almost half of a million dollars in just one week’s work.
While one’s talent, education and hard work should certainly be rewarded, executive pay levels should also remain in line with the rest of the company’s pay structure. CEOs need to be paid as part of a team, rather than paid superstars of the business world.
The gap between the richest and poorest American workers steadily widened during the last 30 years.
American CEOs in 1980 earned 42 times the average worker’s pay, according to the U.S. Securities and Exchange Commission. CEOs in 2010 made more than 343 times the average worker.
Today’s minimum wage workers also earn far less than minimum wage workers earned in 1968, even though worker productivity doubled throughout the last 45 years. Minimum wage today remains stagnant at $7.25 an hour. When adjusting for modern inflation rates, minimum wage pay in 1968 equals about $10.50 an hour.
Raising the federal minimum wage should be the next step to filling the income gap. A recent Gallup poll found 70 percent of the American population supported raising the minimum wage. Income inequality in a capitalist system is inevitable and even necessary, but only to a certain extent.
The levels of inequality today operate the same as a runaway train, with the ability to wipe out what remains of the American dream in a rapid and disastrous motion. For centuries immigrants arrived on American shores with the belief that education and hard work would provide attainable levels of financial security.
Most Americans do not dream of sprawling estates filled with luxurious amenities. People typically just want to enjoy life and provide for their families without living paycheck to paycheck, or going without certain necessities in order to pay for others. Recent data shows the wealthiest 1 percent of American workers have more wealth than the bottom 90 percent combined.
Americans should fear an economic system allowing such dangerous levels of inequality. So much wealth concentrated in the hands of too few disrupts societal stability and corrupts incentives to create personal wealth. Attainability remains the key to the American dream. Attaining financial security seems to be evolving into a laughable idea at best or impossible at worst. One must be able to invest in order for a society to remain stable. They must be able to invest in an education, a savings plan or an idea.
Middle income earners, once the key to economic stability, now consume the majority of their income and are left unable to invest. The possibility of an impending economic collapse seems more realistic than an economic recovery, with the state of middle America in such dire straits.
The last time America saw such heights of inequality was during the 1920s, just before the economic crash. Economists explain this is no small coincidence. In a truly sustainable economy, the rich getting richer holds no bearing on the lower classes as long as those in the lower and middle classes also have the ability to continue to move up, economically speaking.
The lower and middle classes today, though, steadily continue to fall further and further behind, while the wealthy gobble up what the lower classes once worked toward. Today’s lower classes are hit with a double whammy, which further illustrates the deterioration of the American dream.
Not only does the average American worker earn less than they did 45 years ago, they also cannot purchase as much with the amount of money earned with today’s wages. The dollar’s value remains on a steady decline, and with people working harder than ever to earn less, financial security falls further and further out of reach.
Even those with a college degree, a once reassuring step toward financial security, are not safe from downfall. Last year’s weak labor market left 53 percent of college graduates either jobless or underemployed.
Wealth in America does not need to be redistributed in equal measures. Socialism will never be the answer to aiding a failing economy, a fact proven throughout history.
Socialism stifles creativity by denying individuals the ability to work toward anything. If things do not change in America, though, the economic state as it exists today will eventually bring the same results by stifling personal talent, creativity and growth.
Struggling Americans will have nothing to work toward if the ever-widening gap of economic inequality remains unchecked. Success and stability must be a realistic possibility, instead of an impossible dream.
Average Americans do not need a piece of the rich person’s pie. They just need the ability to work for their own pie.