Where Will Change Come From?

Abstract

In a recent editorial in the New York Times (New York Times Editorial, 2012), rising income inequality and the unbalanced debt burden are identified as the reason our economy is struggling, and why (by implication), unless this situation is remedied, austerity measures are destined to fail. Clearly, this revelation does not come as news to an Occupy Movement that, if nothing else was accomplished (and we can argue there are other important outcomes), raised in the minds of most people the questions of who has and who does not have wealth, how is this inequity fueled, and what can we do to address this severely unequal income distribution. While some bumper stickers report a 425:1 ratio of average CEO to average worker salary, recent research does provide a sobering picture of 325:1 in 20101 (almost returning to the pre-2008 meltdown level of 344:1, see Anderson et al., 2011: 3). Before this movement began, the main topic of political discussions and water cooler conversations focused on two questions: How large was the deficit? What must we do to eradicate our debt? Now, a majority of the people in this country agree that inequality is a major, if not the main, problem to be addressed and rectified. But, as a friend in California writes me, if the editorial board of the New York Times now says ending income inequality is long overdue then ‘the system’ must truly be scared. The IMF report did not go unnoticed in the press when it first was released (see Harkinson, 2011; Plumer, 2011). Indeed, even the New York Times had an article on the subject (Porter, 2011) in which the political indifference to this inequality was called into question. Perhaps, as the general argument goes, unequal income provides incentives for most to work harder as they aspire to higher economic levels of income and consumption. But this extreme inequality poses more of a barrier than an opportunity, because it blocks the ability of most to improve their situation. Berg and Ostry (2011) point out that across many societies the higher the national level of income inequality the shorter the period of sustained growth, and posit that the US economy will experience a similar drag on its recovery because of the extreme gap between the 1 percent and the 99 percent (see also Kumhof et al., 2012). So again, why this editorial and why now? Perhaps the answer can be found in the rising level of unrest and public demonstrations against austerity measures across Europe. The 2012 elections in France and Greece offer us some insight as their electorate soundly rejected the parties of austerity. At the same time, many blame the economic plight on ‘outsiders’ or others ‘undermining’ the foundations of their society. These sentiments were captured by the gains made both by leftist parties and by neo-fascist or extreme right wing parties in France and Greece appealing to xenophobia and anti-immigrant feelings among the growing numbers of unemployed and dispossessed. In the US, the Tea Party traffics in the same rhetoric of ‘America for Americans’ and ironically issues calls for austerity programs that will not harm their own members, leading to the ironic demands that the US Government keep hands off their Social Security and Medicare, or the complete disconnect when in interviews people proclaim that they only received Food Stamps and Welfare to sustain themselves, but no one gave them a 450818 CRS0010.1177/0896920512450818EditorialCritical Sociology 2012