Let’s be honest. Anyone whose eyes are open will acknowledge that there is enormous and increasing income disparity in this country. Some people are buying multiple homes, planes, boats, jewels, taking exotic trips, dining nightly at exclusive restaurants (maybe not recently) and buying super-expensive clothes. Others are homeless, searching for food, scraping together all their cash to make ends meet at the end of the month so they can pay their rent or mortgage and feed their children.
Most of us are against socialism. But many of us who have been in denial about the “haves” and “have nots” have had a rude awakening during this pandemic. Among many other realizations, the plight of a huge segment of America has come into sharper focus.
Just a few facts to make my case. According to Pew Research, income inequality in the US is the highest of all G7 nations (US, UK, Italy, Japan, Canada, Germany and France). The wealth gap between America’s richest and poorest has more than doubled in the last 20 years. The highest earning 20 percent of Americans made more than half the US income in 2018. The nonpartisan Tax Policy Center estimated that for the 2018 tax year, 20 percent of the tax benefits would go to the top one percent and by 2027, 82 percent of the benefits would go to the top one percent.
And the gap keeps growing. I read the Mansion section of the WSJ every Friday. It’s not uncommon to see houses (mansions) selling for $285 million. Often you read about billionaires having five or six homes, each worth several million, who use one of their multiple yachts or private planes to access their private getaways. These same wealthy citizens are renting houses in the Hamptons, Cape Cod and even the Eastern Shore for unheard of sums. (Some Hamptons houses are renting for $100,000 a month.)
I just finished reading Melania and Me where the prices of Melania’s dresses and ball gowns were staggering, not to mention the millions of dollars spent on flowers, decorations and mementos for inaugural parties—let’s just say an obscene amount of money. Her purchases include a $51,000 Dolce & Gabbana jacket to meet with spouses of world leaders at the G-7 summit in Italy, a Hermes Birkin bag with an estimated cost of $13,000, a Michael Kors jacket and skirt at an estimated cost of $9,590, and the list goes on.
In contrast, recent statistics show that 37 million Americans are food insecure—that means that one in eight Americans is experiencing some kind of food shortage. If you still have a job and can work from home, you may be doing quite well right now. Your salary may be at the same level as before the pandemic and your expenses may be lower if you have no commuting expenses, parking, gas, etc., plus it’s possible that your childcare expenses may be reduced.
On the other hand, if you are an essential worker and must be on site every day, chances are you are making a fairly low wage, still may have childcare, still have commuting expenses, and you probably are putting your health at risk each day. Or even worse, you may have lost your job, are unable to procure another one, and still have daily expenses of food, rent, etc.
Statistics tell us that during this pandemic, layoffs have topped more than 40 million, 20 million have tapped into unemployment benefits, and nearly a quarter of all jobs have been affected in some way.
So, what steps should we take to bridge our current economic gap? For starters, let’s raise the minimum wage, invest in education and training programs, increase taxes on the wealthiest Americans (tax rates on the very wealthy have been steadily declining), reduce racial segregation, improve access to quality healthcare, create financial regulations that prevent too-big-to fail banks without restricting responsible lending, and improve access to affordable and high-quality childcare.
Another solution that many recommend is instituting a mandatory year of service for young adults which would improve our failing infrastructure, as well as give youth marketable skills to procure better jobs in the future. An impressive bipartisan group support such an effort, including Senator Chris Van Hollen, our democratic senator from Maryland, Chris Coons, a democratic senator from Delaware, Kamala Harris, a democratic senator from California and VP candidate, Jack Reed, a democratic senator from Rhode Island, Amy Klobuchar, a democratic senator from Minnesota, Marsha Blackburn, a republican senator from Tennessee, and John Cornyn, a republican senator from Texas. These changes are not easy, but we need to start—and the sooner the better.
Dave Matthews has a song called Funny the Way It Is. The lyrics go something like “Funny the way it is if you think about it, somebody’s going hungry and someone else is eating out….one kid walks ten miles to school and another’s dropping out.” Such words remind us of the stark economic differences in this country. It makes good sense to take immediate and significant efforts to bridge that gap.
Maria Grant served as Principal-in-Charge of the Federal Human Capital practice of Deloitte Consulting. Since her retirement, she has focused on writing, reading, travel, gardening, and nature.