ST. PAUL LEGAL LEDGER CAPITOL REPORT
One of our nation’s more courageous “one-percenters” explains on a popular YouTube video — and in a movie soon to be released — how having 1,000 times as much money as the average worker does not create jobs or as much economic activity as putting more of that money in the average family’s hands.
Nick Hanauer, CEO of a West Coast company that makes pillows, notes that unlike 1,000 people with more money in their pockets, he won’t buy 1,000 pairs of jeans, or 1,000 cars, and he observes that even the richest people don’t use more than a couple of pillows at night.
The real job creators are not wealthy corporate CEOs like himself, who hire only as a last resort and in response to consumer demand, Hanauer says. Rather, the real job creators are the tens of millions of households in the middle-income ranks who create that demand, and therefore, their own jobs.
“The problem is that even though people like me and Mitt Romney make 1,000 times the median wage, both of us only have 2 pillows on our beds. Not 2,000. If we had a more reasonable distribution of income, I’d sell a s—load more pillows,” Hanauer said in a Business Insider article last year.
Our parents and grandparents in the Greatest Generation, who lived much of their life in an era of rising middle-class progress and prosperity, had a healthy attitude about rich people. They would say that the rich man “puts his pants on one leg at a time,” implying neither contempt nor worship, and a fundamental human equality for all Americans. And wealthy people throughout that era paid much higher tax rates, cooperated with labor unions, sent their kids to fight our wars along with everybody else’s, and did very well in the 1960s and 1970s with a much smaller share of total income and wealth.
A powerful new documentary with these themes, “Inequality for All,” hits the theaters nationwide next week, and the Uptown Theater in Minneapolis on Oct. 4. This film will be as important as “An Inconvenient Truth” was for climate change awareness, and it should be a galvanizing force for an inequality agenda in Minnesota and the nation.
See it. Take your friends and family. Let the facts of the deepening inequality between the one percent and everyone else, and the steady decline of the middle class, inspire and inform how you prioritize issues and work for economic justice in your community and state and nation.
The movie’s narrator and creative source is the brilliant, and quite droll, Robert Reich, the former labor secretary under Bill Clinton, now a professor at the University of California in Berkeley. Reich, who spoke with Hanauer and economic justice advocates recently in a national conference call, promised that “this is not a Michael Moore type movie… this is not a blame game.”
Rather than attack and ridicule the rich, Reich and Hanauer said, the movie will show how the wealthiest Americans in the long run will not benefit from an economic collapse like those we had in 2008 and 1928, when concentration of wealth and income at the top reached record levels. (Recent data show that the top one percent is capturing a greater share of income than at any time since 1928.)
“The wealthy will do better with a smaller share of a more rapidly growing economy than they will with a larger share of a shrinking economy,” Reich said. “If workers don’t have any money, businesses don’t have any customers.”
The movie’s website, inequalityforall.com, lays out six major national public policy initiatives that will reduce inequality, along with “Show Me How” links that elaborate on each.
The six big ideas are: make work pay, through minimum benefits and wages that employers are legally obligated to provide; invest in education and workforce training, improving the earning power of the next generation; reverse policies that diminish bargaining rights and union representation of workers; undo the great tax shift that dramatically reduced rates for the wealthy; reform Wall Street to prevent speculative and predatory behavior by financial institutions; and finally, get money out of politics with campaign finance reforms that reduce the enormous and growing influence of wealthy interests on policy decisions.
A recent report on “Widening Inequality in Minnesota,” by the policy shop I lead, Growth & Justice, documents how the national trends have affected the North Star State. Using the most significant macroeconomic measurements of inequality, the report shows how Minnesota has become more like the rest of the nation, losing its luster as one of the most equally prosperous states. On one key measure of overall inequality, the Gini coefficient, Minnesota dropped from 9th least unequal state to 15th least unequal, over the last decade.
The Minnesota report calls for establishing an Economic Inequality Impact Assessment for proposed actions by the Legislature or other policymaking bodies. A second report by Growth & Justice before the 2014 session will lay out a menu of policy options for Minnesota that fit with the “Inequality for All” national agenda.
A focus on “jobs, jobs, jobs” and creating overall economic growth for the state is never going to go away as a top strategic priority for governors and elected officials, in both political parties. But growth that continues to be captured almost entirely by those in the top 1 percent, 5 percent, or even 10 percent of Minnesota households, is by definition not conducive to the greater good, and cannot be sustained.
We need to develop a nonpartisan, non-ideological jobs agenda that focuses on reducing inequality as our primary economic strategy, not as an afterthought. And the mantra should be that widening inequality is bad for business, period.
A version of this column originally appeared in the St. Paul Legal Ledger Capitol Report on Thursday, September 19, 2013.