Wherein are considered some several questions on
distribution amongst the classes and the fairness thereof

There has been much discussion of late on the subject of “income inequality.”  This space will not deal excessively with that amply covered topic, but with its cousin.  When we speak of income inequality, we are essentially speaking of the distribution of wealth.  What I am concerned with, however, is not the distribution of wealth, but the distribution of pain.

To my mind, the distribution of wealth is something fit to be worried over in good times.  And these are not good times.  Let us take it as self evident that, from an œconomic perspective, things are not likely to get markedly better for the average American in the next 6-12 months.  As the recent congressional struggle over the Social Security payroll tax &c. have demonstrated, we can barely agree to maintain the status quo, itself barely sufficient, if it all.

If we remove the status quo as an option, the government would seem to have two avenues open to it with the goal of rectifying its œconomic condition.  The first is a large Keynesian-type stimulus.  Putting aside the question of efficacy vis-à-vis large government spending, we may discount this as a practical matter since any such proposal would fail to gain the requisite legislative support as the two houses are currently populated.  The other avenue, really the only practicable avenue at this time, is to affect a balancing of the fœderal ledger.   This may be done either by a decrease in expenditures, an encrease in revenues or some mixture of the two.

It is not the purpose of this piece to proscribe any particular expenditures, neither to identify in their particulars new avenues of revenue.  Suffice it to say that the extraction of additional monies from individuals and businesses is bound to cause some measure of inconvenience to the entity forced to surrender it.  Likewise that individuals and businesses are likely to be inconvenienced by a decrease in governmental expenditures by which they had heretofore been advantaged.

It is at this point that I ask, who is it that should be thus inconvenienced and to what extent?  Should there be a relationship between the extent of œconomic injury suffered from one group to another, or ought they to be independent of one another?

The term “class warfare” has been used by some on the right to calumniate the proposals of some on the left.  Without considering the merits, or lack thereof, of any proposals that have been so appellated, I would suggest that there are few in this land who would wish for a class war, though it is clear that there many on both sides who feel that one has been already foisted upon them.

For my part, I should like to see Americans from every œconomic stratum work together to ameliorate our distress, to the advantage of all.  Our history has shown that we are a people capable of great sacrifice when circumstance so demands.  Yet it is natural that people are most willing to sacrifice when that sacrifice is shared by all.  People will more easily bear some burden or injury when they know that their fellow citizens will suffer similarly.

The lower and middle classes in this country do not have much to give, but I believe they will bear what they are able the more readily if they see that their œconomic betters will take up some burden on likewise.  The White House introduced a twitter campaign calling for people to tweet what they could do with $40 dollars, the estimated savings per-paycheck derived from the so-called payroll tax holiday.

To my mind, this is the wrong approach.  One might also ask, if necessity demanded, how would you cut $40 dollars from your weekly expenditures?  There is no question that the loss of $40 dollars out of my paycheck would be noticeable.  Indeed it could make the difference between being able to afford a night out with my friends or perhaps some creature comfort to which I have grown accustomed.  Or perhaps a reëvaluation of what and how much I buy at the grocery store.  Yet, at the same time, I recognize that as a nation, we are not on solid ground with respect to our finances.  If the loss of this income would truly be to our national advantage, then would I willingly bear this hardship.  If.

If, and this is the key, I knew that all Americans would bear some comparable hardship.  The wealthy must also be made to give.  This giving might take the form of an encrease in marginal tax rate, or an encrease on capital gains taxes, stock transaction fees, or something else entirely.  It may perhaps need be little more than symbolic.  Just enough that they would be conscious of also having made some sacrifice.  It can not be the sole burden of the already weak to suffer thus.

Certainly it would not be to our advantage to extract revenues at the expense of potential job creation.  And though it is by now a familiar topos of the right to identify wealthy Americans as “job creators,” neither can we be held hostage by the notion that any additional œconomic burden whatsoever would have this as its issue.  Just as it can not fairly be said to be “class warfare” to ask for such sacrifice.

What is saddening – or frightening, depending on one’s perspective – is that our elected representatives seem unable to deal with these issues in a mature manner.  More than 2/3 of the populus thinks the deficit ought to be righted by some mixture of additional revenues and spending cuts.  Yet still do we find obstructionism and dogmatism in Washington.  It is enough to make one wonder for whom Congress really works.  But that is a question for another day.  For now, it is enough to remember that we as a nation must weather this storm together.  We would do well if each of us would not only accept some part of the burden, but indeed showed some pride in the bearing of it.

Wherein are considered some several questions relating to:
class, unemployment and social mobility

We seem to accept in this country a division of the populus into three distinct classes: The Lower Class, The Middle Class & The Upper Class. ((Added to this we might consider as a fourth class the military.  Mark Thompson examines this idea in greater detail in his excellent article for Time Magazine entitled “The Other 1%.”  For this post, however, I shall confine myself to the tripartite œconomic division identified above.))  The division between these strata is generally clear insofar as people tend easily to identify themselves as being a member of a particular class and insofar as these self-identifications seem generally to go uncontested.  However, it is a characteristic peculiar to the American experiment (or at least it was at the time of its inception; much of the world seems now to have caught up to it) that while one might inhabit a certain class, one is not bound to it.  This notion walks cheek by jowl with the idea of personal responsibility. ((There is no doubt but that the term “social responsibility” means vastly different things to different people.  But left, right & center, I believe all Americans subscribe to some belief in personal responsibility, whatsoever it may mean to them.)) That is to say, we expect that if a citizen of the Upper Class should act irresponsibly with respect to their personal finances, those finances will be proportionally and appropriately affected.  Likewise we expect that if a person should be born to the Lower Class, that person will work hard and in accordance with their own natural talents and thereby elevate themself.  Now the extent to which this is practicably true is much debated in our society.  And to the extent that it is untrue, one of the goals of this American experiment must be to make it incrementally more true.

The fluidity of movement between œconomic classes resides, quite literally, at the foundation of the American experiment.  Putting aside the question of religious freedom which also lies at our foundation, since the founding of Jamestown people have come to this land to better their œconomic prospects.  While I am by no means an œconomist, œconomic mobility must be at the heart of any capitalistic system, else there is no incentive to take risk.  And let it be stated clearly, œconomic mobility must flow both ways.  The potential for upward mobility must encourage risk and inspire creativity while the potential for downward mobility must give cause for circumspection and instill prudence and moderation.

The apparent lack of accountability for those most responsible for our current œconomic morass speaks, δοκεῖ μοι, to a loss of potential downward mobility for those inhabiting the very highest œconomic stratum.  This seems to be a major point, variously articulated, by the Occupy movements. ((I do not presume to speak for the Occupiers, nor do I count myself among them, but that this is an argument put forth by them seems self-evident.  If I should be in error, I encourage any Occupier to provide a more accurate articulation.))  However, this post is not very much concerned with the lack of potential downward mobility at the top, but rather the lack of potential upward mobility in Middle and Lower Classes.

In particular I would like to consider the question of unemployment insurance. ((There is a helpful nuts & bolts analysis by Casey B. Mulligan of U. Chicago which was posted on the NYT.)) While listening to Meet the Press this morning, I heard Senator Schumer (D.NY) arguing for the further extension of unemployment insurance, already at 99 weeks.  Now, prior to the onset of this œconomic winter which began in 2008 the generally accepted norm was 26 weeks of unemployment insurance.  Presumably we believed at that time that 26 weeks was a sufficient period for an individual to find new meaningful employment.  Therefore the fact that an individual can collect for up to 99 weeks, and the attendant idea that even this is no longer enough, must be a tacit admission on the part of our government that it not only no longer expects the unemployed to find new work inside of two years, but indeed that it expects them not to find new work.

No doubt any number of arguments will be confected on the right against such an extension.  Likewise on the left in support.  By now even the causal observer might prophecy with ease several arguments to be made by either side.  However, I here propose to consider the question of prolonged unemployment insurance vis-à-vis potential upward œconomic mobility.  Specifically, I shall try to argue that continued and long term unemployment insurance will likely often harm an individual’s potential upward mobility.

I mean to tread carefully here, for there are those who would argue that longterm unemployment insurance by its nature breeds a complacency in its beneficiaries; that it discourages the search for new employment; that it inhibits personal responsibility.  I say now that I reject these arguments.  I believe that most people in this country want to work, want to earn the food on their table and the roof over their head, want to walk with dignity and not be the object of another’s pity or charity.  I want to be clear about that.

How then, if longterm unemployment insurance does not breed complacency or inhibit personal responsibility, how does it harm one’s potential upward mobility?  The problem is twofold.  First, we must consider the peripheral problems that attend a person in a state of persistent unemployment.  Second, we ought to consider what might be termed the collective collateral damage to our society as a whole.

When we consider the misfortunes of the unemployed we tend to see only the most manifest symptoms.  We see people suffering in hardship, struggling to pay their bills, struggling to feed and clothe their children.  We see people for whom a single surgery or disease would mean absolute ruin.  What is less apparent, I think, is that the longer one is removed from the work force, the greater is the diminishment of their potential value to an employer.  Technology progresses and skills wane concurrently so that the less contact one has with the working world, the more difficult it must be to reacclimate.  The more training must be required to get such a one up to speed.

Further, and I don’t know how one would go about trying to prove this, I suspect there is a stigma attached to being unemployed.  It may even operate on a subconscious level, but there are almost certainly employers who when given the choice between hiring a young adult out of college or an experienced person who has been unemployed for two years will wonder what deficiency has prevented an otherwise experienced worker from getting a job for so long, even in such hard times as these.

Further, there is emerging evidence that longterm unemployment carries a stigma.  In fact, many employers have become so brazen as to make current employment a prerequisite, as reported by the New York Times in July.  At first, I suspected a sort of unspoken prejudice whereby an employer would wonder what deficiency of character or ability has kept a potential employer out of work for such a duration.  But in fact, as reported by the Wall Street Journal back in 2009, employers are quite open about this.  There is an almost Darwinian philosophy at work which argues that only the fittest have been able to remain employed, a sort of economic Catch-22 which serves to keep the longterm unemployed in a prolonged penurious holding pattern.

As for the collective collateral damage to our society, here too we tend only to see the immediate symptoms.  That is to say we are more likely to consider the money that the chronically unemployed are not pumping into the œconomy, the social security taxes they are not paying, the spent government dollars which some would prefer to spend on other programs and others would prefer to spend not at all.  This is sufficient cause for concern today, but what about tomorrow?  A reasonable analogy might be that this is akin to paying famers not to grow crops in a time of famine.

Let it be given that we have a responsibility to our fellow citizens.  It can even be a self-motivated responsibility, for as Perikles is reputed to have said, “a flourishing state is altogether more helpful to individuals than when the individual does well on his own, but the state is collapsing around him.  For the man who is doing well on his own is nonetheless ruined when his state is destroyed, but the one who is in bad shape while his state prospers is more likely to find his salvation.” ((…πόλιν πλείω ξύμπασαν ὀρθουμένην ὠφελεῖν τοὺς ἰδιώτας ἢ καθ᾽ ἕκαστον τῶν πολιτῶν εὐπραγοῦσαν, ἁθρόαν δὲ σφαλλομένην. καλῶς μὲν γὰρ φερόμενος ἀνὴρ τὸ καθ᾽ ἑαυτὸν διαφθειρομένης τῆς πατρίδος οὐδὲν ἧσσον ξυναπόλλυται, κακοτυχῶν δὲ ἐν εὐτυχούσῃ πολλῷ μᾶλλον διασῴζεται.  Th.2.60))  In any case, we cannot leave people to starve, we cannot leave children to wear rags, we can not watch whole neighborhoods be foreclosed upon nor entire communities pass into ghost towns.

If this is true, then we are obliged to help these people.  Three hundred dollars a week is not much, but our society seems to have concluded it is enough under the circumstances.  The question then becomes, if we resolve to pay an unemployed citizen $300 dollars a week, ought we to pay them to do nothing or ought we pay them to do something.  And if it be the state that pays, ought not a service be rendered in kind to the state?  They could be paid to plant trees or clean up roadsides.  Anything is better than nothing, surely.

How would this affect one’s potential œconomic mobility?  Even if no meaningful skills were acquired, it would demonstrate to a potential employer accountability and responsibility.  The potential employer would see somebody before them who, even if they required training, could be counted on to show up every day, on time and work hard.  This is an easier claim to make for somebody who has been working for two years than for somebody who has staid home for two years, even if the claim be true for both.

Sadly, as things are now, people can sit home for up to 99 weeks (soon to be more) and simply “get by,” if even that.  During this time they acquire no new skills, forge no new connections, make no contribution to the state or to their own personal betterment.  There is no hope of promotion, no brighter tomorrow.  Those who have fallen from the Middle Class to the Lower are less able to realize a reascension to their previous station, while those who already inhabited the Lower Class remain there imprisoned.  It is in this way that potential upward œconomic mobility is stunted, and there is no doubt but that we are all the worse for it, singly and together.

*This post was updated 12/5/2011 to reflect the journalism on the matter of many employers seeking only to hire those already employed.  Thanks to Justin Starr for the research.