Income inequality starts at the top
To the Editor:
In his letter to (Dec. 24) Mr. Jay Dugan makes a good statement of the notion, near and dear to the hearts of conservatives, that a person should work to support themselves, and that what they earn should be determined competitively in the so-called free market. This, however, is only part of what is involved in income and the matter of income inequality.
Another aspect, the problem part, can be illustrated with an example. A business operation produces revenue. Some of it goes to pay for raw materials and overhead, things like rent and utilities. How should the rest be divided?
There are basically three candidates: owners and investors through dividends, workers through compensation and the public through environmental protection and affordable prices.
The problem today is that investors are taking more than they arguably deserve, certainly more than is healthy for our economy. Workers are being extorted out of their compensation with threats of relocating their company, the environment is being harmed by lax regulation, and greed-inspired profit taking leads to prices that are unaffordable for an increasing portion of our population. Arguably much of this dividend income is not “earned” as much as it is being “taken,” simply because investors have the power to do so, but this is unhealthy. Today dividend income is largely hoarded, not invested. If “invested” it is in stock market speculation, not in production.
Income equality is about everyone receiving what he or she has earned. It is about fairness and about sharing the wealth of our nation, which is what one would expect in a just and caring society.