Even though some people have reacted to George Floyd’s death with criminal acts, and even though some groups have taken advantage of the protests with unethical tactics to further their own cause, the fact remains that economic and racial inequality in America is a disastrous problem.
Last February Pew Research released some statistics on economic inequality in America. The findings are here. They reported that the share of all income in America earned by the top 20% of the highest earning families went from 43% in 1968 to 52% in 2018. The share of the highest earning 5% went from 16% to 23%. These numbers represent a substantial increase in the concentration of wealth in the upper class. Meanwhile, the share of income earned by all four of the lower 20% segments of earners declined. The same February report from Pew Research also found: “From 1970 to 2018, the median middle-class income increased from $58,100 to $86,600, a gain of 49%. By comparison, the median income for upper-tier households grew 64% over that time, from $126,100 to $207,400.” Even the middle class is losing ground on the wealthy. Pew also reports that in 1989 the wealthiest 5% of Americans had 117 times as much wealth as the median and in 2016 they had 248 times as much wealth. The gap more than doubled. Of course, there are abundant studies showing that minorities such as African-Americans have fared worse than whites.
Our system is making it increasingly difficult on the lower wage earners. Buying a house is substantially more expensive than 40 years ago. “Millennials buying their first home today will pay 39% more than baby boomers who bought their first home in the 1980s” according to Student Loan Hero (see the article from Business Insider here). This affects the lower classes and minorities the most; owning a home is moving further out of reach for them.
Another Pew Research report states: “In fact, despite some ups and downs over the past several decades, today’s real average wage (that is, the wage after accounting for inflation) has about the same purchasing power it did 40 years ago. And what wage gains there have been have mostly flowed to the highest-paid tier of workers.”
An Atlantic magazine article said this about our recent years of economic growth: “Let’s call it the Great Affordability Crisis. This crisis involved not just what families earned but the other half of the ledger, too—how they spent their earnings. In one of the best decades the American economy has ever recorded, families were bled dry by landlords, hospital administrators, university bursars, and child-care centers. For millions, a roaring economy felt precarious or downright terrible.”
When a nation allows its wealth to become increasingly concentrated in the upper class then it is on the road to a decline that renders the nation as mostly a selfish endeavor by its citizens to accumulate wealth and power any way they can. The few who win keep their rewards. Everyone else is fated to struggle to maintain a modest level of living. The poor provide cheap labor or just become excess baggage to society. The upper class gains increasing political influence which allows them to preserve the status quo that enriches them. Governmental institutions, such as Congress, are held hostage by wealthy special interest groups whose members can finance their scientifically designed election campaigns that persuade enough of the befuddled masses (which sometimes includes me) to keep them in office.
All the tax reforms and all the social programs enacted since 1968 have not reversed this trend. Eight years of an African-American President did not change the trend. COVID-19 is making the trend worse. Obviously, our political and economic system has failed to produce a society that moves towards justice. Doing more of the same, with a few tweaks, does not make sense. Systemic changes are required. The poor and disadvantaged will become increasingly angry and complaining about the excesses of their protests is just avoiding the root problem. Of course, some of them will resort to violence. Many of the wealthy would do the same if they were in their shoes.
I say this as one who is a staunch free-market capitalist. No economic system in history has come close to providing wealth to wider demographics than free-market economies. Even in China, capitalism has allowed millions of Chinese to rise out of poverty into a middle-class life. (Although, it has created much displacement that also needs to be addressed.)
As a former lawyer, I am also convinced that the general political design found in our Constitution has also proven itself to be remarkably effective and allowed America to provide security and prosperity to its citizens in ways that exceed nearly every other nation in the world.
Therefore, we need to make some radically changes within the context of our existing Constitutional and free-enterprise environment. We need laws that limit the influence of wealth on our political system. We need laws that require improvement in the economic condition of the lowest 40% of wage earners. We need to experiment with higher minimum wage laws in some industries. We desperately to impose higher taxes on the rich, and on corporations. Tax inequality may be the single biggest cause of overall economic inequality. Education assistance for the poor needs to be designed in such a way that middle class employment is fairly certain. They need to have low cost or free and marketable training, certifications and degrees. Housing must become more affordable; perhaps eliminating tax benefits for investing in residential real estate would reduce the amount of money chasing after real estate and thereby lower prices. We may also need to experiment with laws to help unions assert more influence and to benefit their members.
We must reduce the disparity in funding between school districts in wealthier areas and school districts in poorer areas. In a wealthy America, children should not have to endure gaping disadvantages in education just because they are born into a poorer neighborhood. Business Insider (a business publication!) reported : “While it varies, on average schools located in poorer areas that have a greater proportion of minority students, or non-Caucasian, “receive roughly $1,000 less per student than school districts with relatively low poverty,” according to a 2018 paper.
One thing is sure: if we do nothing then we are sanctioning a grave injustice. This displeases God and goes to the heart of his passion, expressed many times in Scripture, to deal fairly with all people and to help the needy. We need to speak out in our congregations and in conversations with our friends. We need to find and support public officials who will commit themselves to radical change. We also need to avoid any new prejudices against the wealthy or against whites or whatever groups the academic elite have designated as the new scapegoats in our society. This is what Hitler did to the Jews and it cannot be tolerated in any form.
As Christians and as congregations we have an obligation to take concrete action to reverse the destructive economic and racial trends in our society. James 1:27 states: “Religion that God our Father accepts as pure and faultless is this: to look after orphans and widows in their distress and to keep oneself from being polluted by the world.” And we need to look after all groups in distress, otherwise, we are being polluted by the world. What can you do raise awareness and make a difference?
Next week we will take a closer look at the economic condition of African-Americans.
