When First Is Last
Edward Renner
For 5,000 years,
humans lived in the past tense: “Yesterday was the same as tomorrow. “ For the
next 500 years people lived in the present tense: “Today can be whatever we
want it to be.” But now, for the next 50 years we must start living in the
future tense: “Tomorrow’s social, economic and political constraints must
become today’s reality.”
My wife just
walked through the door declaring “I may never again shop at T J Maxx!”
She had just seen the store’s advertisement for clerks and
supervisors at $7.93/hour.
The large number of low wage jobs is one reason why the
World Bank, in its business Environment
Ranking 2014, ranked the US fourth out of the 185 nations of the world in which
it is best to do business.
Some of the other criterion are permitting indefinite
out-sourcing of permanent jobs, not requiring paid vacation time nor giving
notice or severance pay for redundancy dismissal, to list a few examples of
what makes a country good to do business in.
Other countries that are similar to the US, but are less easy
to do business in, have government regulations that provide workers with higher
levels of economic security and benefits. One such comparative set of nations are the members
of the Organization for Economic Cooperation and Development (OECD), which account
for 85% of the world’s economy.
A report by the OECD, Employment
Outlook 2014, sheds some light on what it means to be one of the best
countries in which to do business, and whether that is something the US should
want to be.
 |
| Source: OECD Employment Outlook 2014, Table N, page 288. Data for Norway 2009, France 2008, the Netherlands, 2005 |
Of all of the OECD countries, the US has the largest
percentage (25.3%)of its workforce in a low-wage job (less than two-thirds the
median wage) and pays its low-wage workers the least amount of money (46.7% of
the median wage).
 |
| Source: OECD Employment Outlook 2014, Table N, page 288 Computed from OECD data on 1st to 5th decile earnings ratios |
It is important to understand that this data is compiled by
experts from the member countries and are the agreed upon benchmark for these
comparisons. They are not “just statistics,” but an occasion for civic
discussions about the proper balance between the ease of doing business and the
social price of the US becoming a low-wage economy – a country with a shrinking
middle class and a large gap between the rich at the top and all the others at
the bottom.
Should the US strive for first place -- to be more like
Singapore and Hong Kong, which topped the World Bank ranking – or rather to be
more like the European Union countries with whom we share a democratic political
process?
One reason why the US is in last place among the OECD
nations is that we have allowed corporate money to corrupt the political process
toward favoring business over individual wellbeing. As voters we have accepted
their purely theoretical message that little government regulation and low
taxes are best for the country.
In contrast, the actual reality is the exact opposite.
Historically, lack of regulations
has led to corporate excess. Theodore Roosevelt in the early 1900’s introduced
anti-trust legislation as the corrective action to end abusive labor practices
by the large industrial monopolies. The regulations of Franklin Roosevelt’s New
Deal in the 1930’s corrected the unsanitary conditions in the meat packing and
food industry, established industrial safety standards, and constrained the
financial sector from the speculations responsible for the great recession.
In this Century we have
experience the cumulative negative results of de-regulating the progressive
legislation of the Roosevelt eras. First there was Enron, then the mortage
bubble of 2008, and now there are more financial troubles on the horizon, such
as the pending student loan defaults.
Likewise with taxes. Sufficient
tax rates are essential for general well-being. People need to be healthy.
Public parks, community centers, art and recreation make life livable for
everyone. Schools have to prepare students for success. A living wage is the
basis for equality of opportunity, social stability and personal happiness.
Over the decade preceding the OEDC report (2002 to 2012) the
average measure of inequality in the member nations declined from a score of 3.44
to 3.38. In contrast, the magnitude of inequality for the US actually increased
from 4.66 to 5.22, the highest of all OECD nations. While the rest of the
developed world held steady through the great recession, it became an
opportunity in the US for the wealthy to increase their ability to restrict
government regulation and to increase their share of the income.
The prescription for swinging the balance back from
corporate excess to greater individual well-being is to move toward greater
similarity with the OECD countries which share our democratic political
processes: A steeper income tax on the very wealthy, a living wage for low-wage
workers, more public entitlements such as universal healthcare, and sufficient government
regulations to insure that workers are not treated as disposable components of
a global economy.
What is difficult to understand is why this pending end of
the American Dream – once the envy of the world -- could be possible in a
country with freedom of the press, democratically elected leaders and a
political philosophy of equality of opportunity.
The essential role for government is same today as it was in
2008, 1929 and 1908. Theodore Roosevelt had it right, an essential role of
government is to protect individuals against the abuses of corporate power.
________________________________________________________________________________
Edward Renner has
been a Professor of Psychology at the University of Pennsylvania and the
University of Illinois in the US, and at Dalhousie University in Canada. He is
now retired and teaches one course, Forums for a Future, as an Adjunct
Professor in the Honors College at the University of South Florida. He may be
reached at kerenner@usf.edu, and blogs at
http://forumsforafuture.blogspot.com
on the modern human challenge of how to live sustainably and peacefully on a
crowded planet in the 21st Century.
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