In his Feb. 2 letter “Equality in all things,” retired plant maintenance superintendent David Guedry refers to politicians who “demand equality in income.”
Some politicians are talking about the problem of rising income inequality, but that is not the same thing.
Of course we are going to have income inequality, and we should. People whose knowledge, skills, or experience took more effort or expense to acquire should be paid more. So should the person who produces something more valuable or who just does what they do better. Paying those people more is not only fair, it’s how our economy and society incentivizes people to strive for those things. So some degree of income inequality is essential to a well-functioning economy.
But as with so many things in life, something that is healthy in reasonable measure becomes unhealthy when it is overdone. Income inequality is of concern not because of the inequality itself, but because of its degree: the size of the gap between the wealthy few and everyone else. This gap has been steadily growing and is now bigger than at any time since the 1920s.
In 1965, the average CEO was paid 20 times as much as the average worker but by 2012 (just 47 years or a typical career-length later), average CEO income was 273 times greater. Were the CEOs really that much better, harder-working and more valuable when Mr. Guedry retired than they were when he first started out? Do today’s CEOs really put in 273 times more effort and have 273 times the work ethic and acceptance of responsibility as the workers in the plant who actually make the product?
When people who work for a living struggle to get by and worry about their future and their kids’ futures, when they feel as if no matter how hard they work they can’t seem to get ahead, while at the same time the wealthiest few who already have more than they will ever need get even more, that is a recipe for economic and social instability. That is why the issue of income inequality is so important, and why we need serious policy proposals to reverse this destabilizing trend.
But getting people to believe it’s about “equality of outcome” by whipping up outrage at some nonexistent proposal that everyone be paid the same regardless of work or merit — that is certainly a good way to distract from the real issue: the inequality of opportunity resulting from the vast and growing income gap. The wealthy few have plenty of cash to pay for media (and politicians) to get that misleading message out — but we can choose not to fall for it.