Thursday, January 12, 2012
CEA Chairman Alan Krueger on Income Inequality: How to fix that
Over the last thirty years or so, the wealth of High Earners has gone up while the Middle Class wealth has been somewhat flat. We did see a reduction of poverty in the 1990s after it rose in the 1980s. But thats now back up thanks to the recession of 2001-02 and the "Great Recession" of 2008. That we are still struggling to recover from and the Bush Tax Cuts of 2001 and 2003. Where the Middle Class did benefit from but where High Earners have done extremely well. And have been the only Economic Class that has seen their wealth increase the last ten years. Has contributed to our Income Inequality but that hasn't been the only issue. The last 10-20 years our Education System has declined, to the point that we are now ranked 39th in the World. So we are not producing as many qualified workers as we use to. So now fewer workers have the skills that they need to get a good job, join the Middle Class and move up from there. But if your wealthy and you went to good schools, Public or Private. You either live in an area with excellent Public Schools or you can send your kids to Private Schools. And they can get the skills that they need to go on to college and of course you'll be able to afford to send them to college. And they can get themselves the skills that they need to get a good job, join the Middle Class and move up from there. These are the issues we face and why we have Income Inequality in America.
There's nothing wrong with having a lot of wealthy people in America, as long as they earned their money. By being very productive and not screwing people out of their money. But by producing Quality Products and Services that people can afford to buy and want to have. What is bad for a Liberal Democracy, is to have a lot of High Earners and a lot of Low Earners. And fewer and fewer Middle Earners, where the High Earners see their wealth skyrocketing. The Middle Earners seeing their wealth flattening or going down and the Low Earners seeing whatever money they have dropping. To the point where they become even more dependent on Public Assistance for their Daily Survival. And more of a drain on society, what we need to do instead. Is have an Economic System that encourages people to get a good education, work hard and be productive. Lets those people create a lot of that wealth that they created but for the people that didn't get the skills that they need. To be successful in life and become Self Sufficient where they are not collecting Public Assistance to survive. We empower them to get the skills that they need to become Self Sufficient. And climb the economic scale.
We'll never have what would be called True Economic Equality, we will never have that in a Liberal Democracy with a Capitalist Economy. We wouldn't get there if we were a Socialist Democracy either, look at Scandinavia. They have High, Middle and Low Income people as well, just fewer Low Earners as a percentage then we do. But we can have lesser and more manageable Income Inequality with a better Education System and retraining our Middle and Low Income Workers. By increasing the size of the pot not by shrinking it and taking from the few to support the rest.