The Truth About Income Inequality

The term “income inequality” has become a rallying cry for those on the Left and Socialists around the US. This is not a new concept but has been around since the beginning of time. It was exploited by Karl Marx in the Communist Manifesto where he encouraged the workers to revolt against their “rich masters”. In fact, this “inequality” isn’t just a human thing, it appears in nature as well. In a lion pride, the alpha male, although he did not participate in the hunt, gets to eat first and takes what he wants while the others must wait. This is the origin of the phrase, “the lion’s share”. Unlike the animal kingdom, humans are aware of the inherent unfairness of inequality in its many forms and over time have worked to end many of them. In the US, we have set up a system that was different from the European systems that were prevalent in the Middle Ages. In those systems, people were put into classes, or castes, and their lives were determined by the class into which they were born. If you were born a peasant, you would most likely die as one. There was very little chance to move up in standing in that system. The only good thing was that you had the same odds of moving down too.

 

The American colonies adopted a different form of economic system that did not use the caste as it was in Britain. The colonies were far enough away from Britain that the royal influence was greatly diminished economically and politically. This left the colonies free to experiment with different economic philosophies and systems. In fact, Jamestown was one of the first examples of Communism in history in the 1600’s, that was 241 years before the Communist Manifesto was written. It turned out to be a failure and the colony adopted private property and Capitalism as their economic model. Under this system, the colony began to prosper and those in Europe who heard about it desired to come to the New World. While many of the newcomers were fleeing religious persecution, and seeking religious freedom which was offered in the New World, they were also escaping the caste system they were locked into from birth. They sought greater opportunity economically and politically with freedom from the tyranny of the Crown. The British settlers’ actions were different from the “command and conquer” philosophies of the French and Spanish who forcibly made their way into Central and South America. The British colonies, while not innocent of wrongdoing, set up trade with the indigenous people in many areas. This increased the prosperity of the colonies as well as that of the tribes with which they traded.

 

Protests have cropped up around the nation with the slogan “Fight for 15”, a push for a $15.00 minimum wage nationwide. Most of the protesters are from the fast food industry backed up by the Service Employees International Union (SEIU) which represents people in the service industry including restaurants. The current Federal Minimum Wage is $7.25 per hour and can be lower for tipped employees. While some states and municipalities do have higher minimum wage rates, not many have one as high as $15. The chief complaint for the protesters is that no one can live on the minimum wage even as a full-time employee. Some outlets have reported that some of the protesters have been paid to attend these events. The SEIU has apparently spent millions on the campaign including paying strike benefits to non-members. This would show that the protests are not “grass-roots” as they are insinuated to be. Another complaint is that CEOs are paid so much more than average workers to the tune of 100 times. The group has even gotten the support of some politicians like the self-proclaimed Socialist Bernie Sanders who is far from poor with a net worth over $500,000. While the organizers know what they are doing and what they are calling for, some of the protesters may not understand the driving force behind all of this.

 

The entire “Fight for 15” movement is based on three main beliefs that come from Marxist philosophy and have been perpetuated by leftist, Socialist professors at universities across the US. These beliefs are anti-Capitalist, anti-free market, and anti-profit as they embrace the philosophy that greed propels Capitalism and that workers are used to advance that greed. The organizers of the movement think that the government should be in control of the wealth in the US and that the wealthy are withholding it from the poor. It is in this vein that they support exorbitant taxation of the “rich” which is defined as those making $250,000 or more a year. During his administration, Barrack Obama called them millionaires and billionaires which, the last time I checked, $250,000 was just a quarter of a million. The moving target of who is rich allows liberals and leftists to lump middle class and upper middle-class people into the realm of the “rich”.

 

The first belief that the “Fight for 15” movement embraces is the “zero-sum game” which states that there is a finite amount of wealth and it is distributed by those who control most of the wealth. In this belief, the poor are in their situation because the wealthy are holding all the wealth and not letting the poor have it. As a result, liberals believe the government should force the wealthy to share their money through taxation and redistribution of that wealth. This belief completely ignores the fact that wealth is fluid in the economy and the wealthy spend a great deal in it. It also ignores the fact that wealth is not finite and is created rather than distributed. Wealth is created by people when they make a profit from their business and use some of those profits to get more people interested in their products or services. The more people who buy, the more revenue that is generated therefore increasing profit and wealth. The only way to be successful in the market is to offer a product or service that is needed or desired by people and at a price they are willing to pay. If you have a product that is hard to produce you may want to look for investors to get the capital needed to start production and that is where the wealthy play a large role. Without investors with money they could spend on new ideas, there would be many products we take for granted today that would have never made it into production and therefore we would not have at all. The next belief also builds off the “zero-sum game” perspective but is different in how the wealth is distributed.

 

The second belief is that for a person to become wealthy, that person must take it from someone else. In other words, the wealthy get their wealth from others thereby make the other people poor. In this belief, the rich stole the wealth and horde it away from those to whom it rightfully belongs. This belief also ignores economic facts and pits the have-nots against the haves in a way that justifies theft from the rich. This was the premise of Robin Hood and characters like him. This also justifies the Progressive tax structure that bases tax rates on income level. The question that is impossible to answer in this scenario is when in history did the poor have the wealth that the rich now possess? When did this “great transfer” of wealth occur? The truth is, it never did and the poor did not lose their wealth by theft. The fact is that those born rich are not destined to stay rich if they do things that exhaust their money without replacing it. A person born poor is not destined to remain poor if they do things that will improve their abilities and open opportunities. In the end, a poor person will remain poor if they do the things that make them poor and may become rich if they do things that will make them rich. In the same way, a rich person will remain rich if they do the things that made them rich but will become poor if they do things that can make them poor. In the US, we have the best economic system to go from poor to middle-class and even rich if there is determination, courage, and hard work to achieve better than you have. The key here is not to look at what the rich have but to try to improve on your life in little ways while being patient. Sooner or later you will have wealth if you avoid that which can hold you down. The third belief is two-pronged and feeds off the perceived “unfairness” of income inequality.

 

The third belief goes straight to the heart of Marxism and the philosophy embraced by Democrats, Socialists, and Anarchists in the US. Part of it is a core component to the emotional makeup of human beings which has led to murders and other atrocities throughout human history. We are talking about jealousy, especially the type that leads to covetousness that in Biblical terms is a sin.  We have all experienced jealousy in our lives, it is just a human emotion that we all feel. Some have taken extreme measures in dealing with it while others just let it go and never dwell on it. In the Marxist view, jealousy is the product of unfairness. Those who oppose Capitalism claim it is an unfair system where the rich get richer and poor get poorer and there is no chance for the “little guy” to become successful. They believe it is unfair that some people can have things that others cannot obtain. This is the cornerstone to the philosophy that no one should be allowed to have more than anyone else, or equality of outcome. This completely dismisses the human nature to be competitive and diminishes the human spirit which thrives on achievement. In this type of society, there would be no need to work harder, learn more, or even to be the best at what you do. There would be no incentive to improve upon oneself and excel in a craft or trade. There would be no reward for ingenuity and invention let alone a driving force behind advancement in technology or other evolving fields. While Capitalism is not a “perfect” system, a system of complete fairness and equality would halt human advancement and stagnate civilization.

 

As with anything the Left does, there is glaring hypocrisy in the “Fight for 15” movement that many of the participants do not see or refuse to see. As stated before, one of the chief complaints of the movement is that CEOs are paid at a much higher rate than average workers. Take into consideration that there are several Hollywood A-list actors who have endorsed the movement and have even spoke at rallies condemning the “wage gap”. They complain that a CEO can make in one hour what an average employee makes in a year. The irony here is that some of these actors make more from one movie than the average worker on set makes in 50 movies they work on. I still don’t see any of these multi-millionaire actors turning down $20 million roles in favor of a $15 an hour rate. I would not expect them to but it is a bit hypocritical to call out one person for something that is commonplace in your industry. Another hypocrisy in the movement is the union’s involvement in the organization of the rallies. First off, union workers are rarely paid low wages for their work. Secondly, this is an effort by the union leaders, who, by the way, make a lot more than their members some over $600,000 annually, to increase the membership of the unions and therefore increase union income. Unions have been losing members in the past years due to many people rejecting organized labor as an outdated relic. Thirdly, the union knows that, while they can get success in some states, the goal is to get the federal minimum wage increased. The reason here is simple but most people don’t know about it. If the minimum wage is increased nationally, the union’s wages that are tied to the minimum wage would increase by the same percentage without the need to negotiate a new contract that may be rejected by management. So, supporting the movement for a $15 minimum wage is really a backdoor way to get union employee wages raised on the backs of other workers. You see the raise in the minimum wage would be negated by the raise in union wages which would have a domino effect on the cost of living. Plus, with the new technology, automation of certain tasks that would be performed by low-wage workers could be more cost effective than ever before. With each increase of the minimum wage there is a corresponding rise in unemployment applications.

 

While some things in life can seem very unfair, we must remember that life itself can be very unfair. Some kinds inequality is actually a good thing in the fact that we use them for inspiration. Because of human beings’ competitive nature, income inequality drives people to achieve more and push themselves to succeed. If income was guaranteed and outcomes all equal, there would be no need to excel and become better, in fact, there really would be no need to do anything at all productive. The hard truth is that there will always be rich, middle class, and poor people and there is very little the government can do about it. The only way the government can give the poor money is to first take it from someone else. You cannot raise up the poor by bringing down the rich, that will only make everyone equal in misery and no one wins except the politicians. Many people think that Socialism is the answer but in Socialist countries there are only two classes of people. Those who have lived in it understand the best that it is the rich leaders and everybody else. In the Soviet Union, the party leaders lived in grand mansions while the general population were crammed into small apartments with little food. Is that what you want for the US? Oh, but everyone was equal!

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