A few weeks ago I went to a presentation by Barbara Ehrenreich, author of Nickled and Dimed, on how the US is systematically abusing its working class. I couldn't imagine a better example of Barbara's arguments than the following:
Circuit City has announced that they're firing their highest paid sales staff and replacing them with lower paid workers who, if they do well, will presumably be promoted until they reach the level of "too expensive", at which point they'll be fired as well. Cut staff will have the option to apply for lower-paying jobs after a 10-week waiting period.
When I was a kid and the Soviet Union was still that giant pink blob on the map, I remember arguing that Communism in that form would never work because it removed the incentive to work hard and differentiate yourself from the pack. It's sadly ironic to see this becoming a problem for a market-based system. I propose that, since they'll clearly have the worst customer service staff, we all stop shopping at Circuit City. Oh, wait. We already did. That's why they're in this mess.
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Communism 2.0 - now with AJAX!
You most likely have already read this new article, but if not: Income Gap Is Widening, Data Shows -http://www.nytimes.com/2007/03/29/business/29tax.html?em&ex=1175400000&en=5a2d017aeb4df8cf&ei=5087%0A
The scariest bit:
"The disparities may be even greater for another reason. The Internal Revenue Service estimates that it is able to accurately tax 99 percent of wage income but that it captures only about 70 percent of business and investment income, most of which flows to upper-income individuals, because not everybody accurately reports such figures."
I am all for a free market system when the best/brightest/most innovative/hardest-working make a lot of money (even crazy amounts of it), but pairing these new figures with the fact that class mobility is slowing in this country (according to a class I took on inequality in grad school with Robert Reich) AND the anecdotal evidence you mentioned it is a little scary.
I read "Nikled and Dimed" a few years ago and found it laughingly bad; the most entertaining parts concerned Ms. Ehrenreich's noble but ultimately futile struggles to stay off pot long enough to pass an employment drug test. The arguments in it, along with much traditional "Income Gap" analysis are mostly silly.
Two things matter most in an analysis of national economic justice: the lifestyle level of the "average" citizen, and the lifestyle level of the lowest percentiles. Neither the lifestyle at the top, nor the size of the "gap" between top and bottom are terribly relevant. By most ways of measuring these things, the US is well ahead of the rest of the world and trending in the right direction. Sure there may be short term reversals, but I think the long rage picture is good. "Gap" analysis is usually more indicative of the personal and political ambitions of the analyzer, than of the health of the underlying economic system.
As someone who was once forced to live in the Soviet Union (but never forced to work at Circuit City), I can confidently say that the problem with communism was not the failure to guarantee a comfortable wage at an economically dubious profession. In fact, it was probably the attempt to create just such a sinecure society that led to a great amount of suffering for a couple of billion people over the better part of the last century. Let Circuit City hire and fire at will. Maybe they'll figure out a way to make their business relevant again.
The New York Times ran an editorial piece on this that's relatively interesting.
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