OPINION:
Last week, Vice President Joe Biden sowed discord between Democrats Hillary Clinton and Bernard Sanders by questioning Mrs. Clinton’s commitment on the issue of income inequality. Mr. Biden claimed the issue was “relatively new” to her, whereas it’s been “a drumbeat” for Mr. Sanders. The Sanders campaign quickly retweeted the comments, and Mr. Biden was forced to backtrack on the “Today” show one day later.
The competition between the two Democratic front-runners is now over who prays most often at the shrine for equal outcomes. Scarcely a speech goes by from any Democrat without the perils of inequality being raised.
Curiously, the majority of Americans see themselves as part of the middle class, even if they are not technically a part of it. According to Gallup, 51 percent of Americans identify themselves as middle class, including 25 percent of those earning less than $30,000 a year. Stoking class warfare in a country that sees itself as classless would seem to be narrow-casting, except at an Occupy Wall Street rally.
But politics and perceptions aside, inequality is an important issue in a country founded on egalitarianism — especially if government policies are encouraging the split between haves and have nots. The top 1 percent of earners are capturing about 22 percent of all pre-tax income. But then again, they are paying an unequal 50 percent of all federal income taxes.
More thought-provoking than the politics of envy is exploring the policies that have contributed to the new reality. I’ll offer just two: education and wage controls.
Consider the state of the nation’s school system. Six-thousand students drop out of high school every day — 2.2 million annually. In 10 years, that is more than 20 million American adults who are mostly unemployable beyond menial jobs.
According to the 2015 National Assessment of Educational Progress, one-quarter of eighth grade students do not have basic reading skills, and two-thirds don’t have “proficient” reading skills. About one-third of high school graduates who try to enlist are rejected by the military for insufficient reading or basic math abilities. As Newt Gingrich once observed, we are graduating seniors who can’t read their diplomas.
And who runs the education factories that are turning out the industrial equivalent of scrap? Democrat-led teachers unions that bankroll Democrat campaigns in return for the promise of continued government policies that pit teachers union benefits against children needs. And kids lose most of the time.
Once out of the U.S. school system, young, poorly educated employees then have to contend with Democrat-backed minimum wages that price them out of a job. With no meaningful education and no work experience, many entry-level employees do not have the skills to warrant the current minimum wage.
Businesses that once hired these kids are now investing in newly available technology to make employing entry-level work a historic anachronism. And minimum wages are pricing untrained youth out of the job market, stranding them on the sidelines of life. (If you don’t get hired at 18, the chances are you won’t be working at 19 or 20.) With some misplaced compassion we have created a societal time bomb with an ever-shorter fuse.
Democrats argue that raising the minimum wage is an antidote to inequality, claiming that it helps the working poor. Yet more than 60 percent of people considered “poor” don’t have a job. Real inequality is the result of being jobless in our society with no path to a higher standard of living beyond public assistance.
The Federal Reserve Bank of San Francisco confirmed in a report last month that minimum wages reduce the opportunities to get jobs, which allow these people to escape poverty and quickly earn much more. Research shows that about two-thirds of minimum wage employees earn a raise within their first one to 11 months on the job. That’s because minimum wage jobs do what failing schools don’t: They give people marketable skills that allow them to command higher wages from the market.
Other Democrat-backed labor mandates that raise the cost of employment — including scheduling requirements, lower overtime thresholds, mandatory paid leave, and “joint employer” mandates that eliminate the distinction between franchisor and franchisee — are part of a laundry list of new business incentives to create more of a self-service economy rather than employ people with few skills. This is a perfect prescription for generating even more inequality.
Democrats will continue to base their 2016 campaigns on redistributing income through the tax code or more “fairness” regulations that result in fewer employment opportunities. Hopefully, there are still some liberal thinkers who care about the unintended inequality consequences.
• Richard Berman is president of Berman and Co., a Washington public affairs firm.
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