Bridging the income gap between the 1 percent and the 99 percent is not something that only benefits the 99 percent while penalizing the 1 percent in some way. In fact, here are five ways in which the 1 percent also stands to gain from such a bridge:
1. The 1 Percent Can’t Build A Wall Around Global Problems. There are real limits to how big a wall or fortress the 1 percent can erect in the face of global climate change, nuclear proliferation and economic instability. Global instability and the climate crisis will not bypass the 1 percent, even though they will be buffered from the worst conditions. Our present economic and ecological challenges require 100 percent of us to be engaged.
2. Inequality is Bad For Everyone’s Health. Too much inequality undermines everyone’s health, including the 1 percent. As the British health researcher, Richard Wilkinson, has documented in The Spirit Level: Why Greater Equality Makes Societies Stronger, extreme inequality undermines public health for everyone in the society. For example, when you eat out at a nice restaurant, remember most employees serving you are likely to lack any sick days and often any health care. So they come to work sick — and then you get sick, too.
3. Entrenched Inequality Undermines Excellence. Extreme inequalities undermine opportunity, social mobility, and meritocracy. As wealth concentrates, so does power. A segment of the 1 percent –the “rule riggers” – use their power to corrupt the economic policy and outcomes. The U.S. is drifting into plutocracy, a society where the wealthy rule. As Warren Buffett said, it’s like picking the 2020 Olympic team by choosing the children of the 2000 Olympians. Already, research shows how social mobility is declining in the U.S. and increasing in more equal industrialized countries.
4. Inequality Hurts the Economy for Everyone. Polarized income and wealth lead to economic instability, distorted markets and hurt economic growth. The 2008 economic meltdown was inevitable as consumption by the bottom 80 percent was based on borrowing, not real wage growth. Meanwhile, the 1 percent moved a huge percent of their wealth out of the “real economy” of goods and services – and into the speculative marketplace. These two trends contributed greatly to the economic meltdown.
5. Extreme Inequality Breeds Fear and Destroys Communities. What kind of society do we want to become? The wealth gap keeps people apart – creating multi-tiered societies that are fear-based. Do we want to become like Brazil, where the vast majority live in poverty and the wealthy live behind walled enclaves, drive bullet-proof cars, and hire body guards to accompany their children to school? The current drift of unequal wealth and power is moving us in that direction.
Author Chuck Collins is a senior scholar at the Institute for Policy Studies and one of the founders of United for a Fair Economy.