Panel Dissects Causes of Widening Income, Wealth Gap

ARLINGTON, Va. (PAI)—The widening income and wealth gap between the rich and the rest of us has many causes, including globalization, so-called “free trade” treaties and a corporate-political campaign to smash unions and worker rights, a panel of experts discussing the issue concludes.

And the panel told a forum assembled by the Fairfax County, Va., Democrats, that activists should join a mass movement – which organized labor is leading – to right those wrongs and return power and wealth to workers.

“We’re in deep trouble.  Our problems haven’t been resolved.  We just kick the can down the road,” said author Hedrick Smith, leading off the discussion.

But it’s not just a matter of cutting federal spending, he added.  Indeed, doing so only makes things worse, because it takes money out of workers’ pockets during a still-weak recovery.  It’s a matter of solving the income inequality gap, too, before it threatens democracy as well as workers and their wallets, he warned.

“Lincoln said ‘A house divided cannot stand,’ and we are deeply divided.”

“The issue of income inequality is the central issue today, and workers all over the world are facing that issue,” explained top AFL-CIO staffer and policy analyst Thea Lee.  “We can’t build a vibrant democracy if we give the 1% all of the wealth.”

The Oct. 17 forum drew several hundred activists.   Sandra Klassen, the Fairfax Democrats’ chair who spent months organizing the forum, said its key purposes were to outline the dimensions and causes of income inequality and to discuss policy solutions.

‘We can’t have a prosperous economy without a large and growing middle class.  We allowed it to happen, but it can be fixed and that was the purpose of our forum,” said Klassen.

The weakening of unions through the deliberate corporate campaign and enactment of so-called “free trade” treaties which trash workers’ rights and export jobs overseas is one key reason for the rising inequality, said Lee.

Those trends and inequality overall occurs because there has been a shift of power to “a small group of people who are using it to shape policy” for their own ends, Lee explained.  Those ends “let them amass more and more riches.”  Meanwhile, the mass of people have “become numbed” to the trend.  “But in the last four to five years, it’s become much worse.”

“And between privatization and globalization, they (the rich) have gotten everything they wanted,” Lee added.  “They wrecked our economy!” (her emphasis).

But people are numbed and “accept the narrative that unions are the cause” of the economic problems, even though unions represent only one of every eight workers and only one of every 13 in the private sector, she said.  That narrative is fueled by scads of corporate cash, Smith pointed out: Business outspends labor on lobbying by a 60-1 ratio and outspends labor in political “soft money,” 90-1.

The AFL-CIO, at its recent convention, outlined 45 ways, in one of its resolutions, to raise wages and restore worker power, Lee added.  “But first we have to build the power and solidarity to do that.  We’re not big enough, so we need allies.”

That was the point of the convention’s decision to open organized labor to become a labor movement and to inviting outside progressive groups – women’s rights groups, Latinos, African-Americans, LGBT groups, environmentalists and others – into labor’s councils.  Lee urged the audience to join, too.

“We’re talking to taxi drivers, day laborers, home health care workers and others, and looking for more channels” outside labor law “for non-union people to join the labor movement,” she explained.

Basic policies that such a movement could fight for, she said, include raising the minimum wage to a living wage, battling trade pacts that export jobs and give corporations power to kill pro-worker and pro-consumer rules, and agitating for approving the $3 trillion that the U.S. needs to repair and improve its infrastructure.

Unions also must stop fighting each other over such things as who could organize and represent whom, Lee warned.  “We have to look beyond that,” she added.

Another panelist, Dean Baker of the Center for Economic Policy and Research, added another cause to the list: Cutting the financial sector down to size.  It still features “too big to fail” financial institutions and wild speculative dangerous trading which yields financier profits and large Wall Street paychecks – while not adding anything to the  economy or productive capacity.  “They made money off tax loopholes,” he said.

His solution, which the National Nurses United is also pushing, is a small financial transactions tax, of 50 cents per $100, to curb the speculation and yield money — $350 billion-$400 billion yearly – that could be invested in infrastructure, education and other social goods.   “You’d raise a lot of dollars and eliminate a lot of waste,” Baker said.

“To paraphrase and synthesize the message delivered by our speakers, income inequality in America is not the inevitable result of technology, globalization and other such forces,” Klassen, the Democrats’ chair and the forum’s organizer, said afterwards. “It was created as a result of policy decisions on taxes, education, trade, labor, macro-economics and financial regulations that shifted economic power away from low and moderate income families and redistributed it upward.”

“We the people allowed those with the most economic power to set the rules of our economy, and it isn’t sustainable.  We can’t have a prosperous economy without a large and growing middle class.  We allowed it to happen, but it can be fixed and that

was the purpose of our forum.”  The Fairfax Democrats have a video of the forum.