The Two-Tier Economy...

The following is an excerpt from Moral Politics by George Lakoff...required reading for anyone that cannot understand how the other side of the aisle thinks.

There is a persisitent and terribly damaging myth about our economy, namely, that in the American economy poverty can, in principle, be eliminated - if only there is better education, more jobs, more opportunity, and if people will just work hard, save, invest, and pull themselves up by their bootstraps. This is simply false. Our economy as it is presently structured requires substantial poverty.

The present American econmoy requires that certain jobs have low wages: cleaning houses, caring for children, preparing fast food, picking vegetables, waiting on tables, doing heavy labor, washing dishes, washing cars, gardening, checking groceries, and so on. In order to support the lifestyles of three-quarters of our population, one-quarter of our workforce must be paid low wages. These are the people who make two-income families possible, because they take care of the house and the children, allow fast-food outlets, restaurants and hotels to exist, and perform other tedious, unpleasant, unsafe, and physically difficult jobs that support middle, upper-middle, and upper class life.

It is a myth that all the people so employed can lift themselves up by their bootsraps, get educated, spend thriftily, save, invest, and get out of poverty - that is, to get decent housing in a safe neighborhood, adequate food, health care, and education for their children. Even if all the present lower-tier workers moved into the upper tier, the country would still need a quarter of the population, working at low wages, to take care of the children, clean the house, work in fast food places, pick the lettuce, weed the lawns, wait on tables, wash the cars, and so on. This economy absolutely relies on hard-working people whose pay does not reflect their contribution to the economy.

In short, those on the ground floor of our economy are holding up those on the upper floors - and they work hard to do so. But the structure of our economy does not allow their pay to be commensurate with their contribution to the economy as a whole.

A free-market economy is one in which labor is seen as a commodity that people should be able to sell for what it is worth. But in our economy, individual employers cannot, for the most part, afford to pay lower-tier workers a wge that reflects what they contribute to the eocnomy overall.

In an important sense, lower-tier workers are working for the conomy as a whole, since they make upper-tier lifestyles and incomes possible. In a well-run market, people should be able to get what their labor is worth. But we do not have a well-run market. What is needed is a market correction - a way that the conomy as a whole can reward those whose labor it depends on but cannot adequately pay. The machanism is simple: a negative income tax (that is, a serious expansion of the earned income tax credit).

What do lower-tier workers deserve for making middle and upper-class lifestyles possible? What is the least they deserve? Adequate health care, adequate nutrition, decent housing, and full access to education. Can the econmy as a whole afford it? I suspect so, but the question has not been asked, at least not properly: Can we afford a moral economy - a fair, well-run economy in which people are paid what they have earned, that is, what their work is worth to the economy as a whole? Can we at least provide a "moral minimum" - the least that lower-tier workers deserve? Anything less is simply immoral, and a market that pays less when it could do much better is not a well-run market. This is a national discussion we need to have. It is a discussion that makes clear that markets are not forces of nature; they do not just happen; they are not totally "free"; they are constructed and run, and the question we must ask is how they should be run.