Ross Eisenbrey is the vice president of Economic Policy Institute. He is the former commissioner of the U.S. Occupational Safety and Health Review Commission. He writes primarily on labor issues.
TKO: Is economic inequality a problem? If so, why?
RE: By concentrating more and more income and wealth among a relatively few households, the truly extreme inequality in the US today leaves millions in poverty (nearly one in four children now grow up in povetry), weakens demand for goods and services, which contributes to high unemployment, and leads to economic insecurity for most Americans. It concentrates economic and political power in fewer and fewer hands, threatening democracy in new ways, thanks to recent Supreme Court decisions that allow unlimited spending in electoral campaigns. Left unchecked, it will concentrate wealth so much that a relative few oligarchs will eventually control the nation’s resources, own its land, and dominate its politics.
TKO: To what extent can/should the government be involved in reducing inequality?
RE: Government of, by and for the people must control the rise in inequality if our democracy and a healthy economy that works for the majority of people are to survive. It is not in the interest of the vast majority of our citizens that 90 percent or more of income growth accrues to the top one percent. It is not in the interest of the majority that even as the wealth of the top 1% has swelled, the bottom 60 percent of American households lost wealth – were actually poorer in 2010 than they were in 1983. We should overturn Citizens United, we should heavily tax inherited wealth, we should tax extremely incomes much more than we do, and we should restore the labor standards and institutions that helped bring about broadly shared prosperity in the post-WWII years.
TKO: You have spoken about the difference in economic outcomes in some states as a result of their right-to-work laws. How important is it that one’s economic possibilities can be heavily affected by the policy in one’s state of residence?
RE: Very important. The inequality of education in Mississippi, as opposed to Massachusetts, for example, means that the average person growing up in Mississippi (and especially African Americans) will have reduced opportunities in life. Their health outcomes will be worse, and their life expectancy will be reduced (5-yr difference between MS and MA). Massachusetts is one of the richest states and incomes are high even after adjustment for cost of living, whereas Mississippi’s household median income is about $30,000 less — near the bottom of the 50 states even after adjusting for its low cost of living.
States are taking very different approaches to matters such as unemployment (North Carolina, Michigan, Florida and others have reduced the number of weeks of eligibility for unemployment insurance) and the minimum wage, which varies from 0 in Mississippi to $9.32 per hour in Washington, with no tip credit. Poverty rates are substantially higher among tipped workers in states with a tip credit than among tipped workers where there is no tip credit.
TKO: What kind of impact does labor policy as well as the ability to unionize have upon economic equality?
RE: Unions were a check on runaway CEO pay when they were strong. They created political power for millions of individuals who, as individuals, would have had little political voice and no power. That power led to fairer tax laws, a strong economic safety net, good public education, and to broadly rising wages and salaries. Studies suggest that at least a third of the rise in wage inequality is attributable to the decline in unionization.
TKO: Are there any policy initiatives before Congress at the moment that you feel would mitigate economic inequality if acted upon properly?
RE: Three initiatives stand out: legislation to combat currency manipulation by our trading partners/competitors, which would make our exports cheaper and make imported goods more expensive; legislation to raise the minimum wage to $10.10 an hour, which would increase incomes for 25-28 million people over the next three years; and legislation to enact a Constitutional amendment to control the influence of money in politics.
TKO: What will be the importance of the 2014 midterm elections upon labor policy?
RE: If control of the Senate is taken by the Republicans, labor policy will become a tug of war between the president and Congress. The Republicans oppose a higher minimum wage and improvements in overtime pay regulations. They want to further weaken unions, repeal prevailing wage laws, weaken the safety net, and generally lower labor standards. If the Democrats retain the Senate and gain control of the House, we will see an increase in the minimum wage, increased enforcement of labor standards, and perhaps some action on paid sick leave.