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Investing in America

Maverick Notes

I’ve spent a lot of time learning about capitalism.

I guess, really, I’ve spent a lot of time hearing the people around me laud capitalism. My education, from my first introduction to the word in sixth grade to my economics class in 12th grade, has rarely failed to remind me of how capitalist societies create unparalleled innovation and how this system allows the best to rise to the top purely by merit.

I’m reminded that competition allows for the best product to win. And, ideally, it should.

But the reality of American capitalism is that it doesn’t do that. Studies done at Harvard University and University of California, Berkeley indicate that America’s class mobility — the likelihood of a child born into the poorest segment of the population making it into the richest — is about 9 percent. That’s low compared with many European countries, such as Denmark, where the percentage is twice that.

And as income inequality increases (as it has been doing), studies show class mobility will drop. Some 22 percent of overall income in the United States is going to the top 1 percent. Incomes for the middle class are stagnating because of weakening unions and competition overseas, among other causes.

Minimum-wage workers, 49.6 percent of whom are older than 24, aren’t being paid a living wage. Oregon’s minimum wage is $9.25 per hour, 15 cents more than the federal rate. The only two rates that are higher than Oregon are Washington at $9.47 per hour and the District of Columbia at $9.50 per hour. Can you imagine raising a family on $9.25 per hour?

It’s pretty clear that America, for as much as the upper class is flourishing, isn’t doing so well in serving the middle- and lower-income classes that make up 94 percent of the nation.

The Affordable Care Act was a step in the right direction to help ease wealth inequality by offering greater access to health care. But it isn’t enough.

America needs to step up and provide legitimate opportunities for lower-income people to help themselves by investing more in social welfare programs and ending tax breaks on the ultra-wealthy. Since the late President Ronald Reagan coined the term in the 1980s, middle- and low-income people’s pocketbooks have proven that “trickle-down economics” simply does not work.

That’s because under capitalism, the wealthy don’t benefit from paying their workers any more, no matter how much the taxation on their company drops.

In fact, a small class of the super-rich actually depresses demand for goods and services and creates social unrest, according to documents from Oxfam International, an organization created to combat poverty around the world. Investing in the middle and lower classes, however, does improve communities and economies.

So sure, capitalist systems can be successful. But right now, ours isn’t.

So, maybe it’s time our elected officials upset some of their major lobbyists and actually invested their money in the majority of America.

Source: www.economist.com/news/united-states/21595437-america-no-less-socially-mobile-it-was-generation-ago-mobility-measured

Riverdale High School senior Patricia Torvalds is a regular columnist for The Review and can be reached at education@lakeoswegoreview.com.

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