By Matt Sinovic
Since the financial crisis of 2008 and the Great Recession that followed, our economy has struggled to recover fully. Stock prices and corporate profits have soared to record highs, while we have experienced severe economic inequality, with more working families left behind. Unless we take action to reverse this disturbing trend, an entire generation is at risk of being left behind.
Earlier this month, Oxfam (a global organization working to right the wrongs of poverty, hunger and injustice) released a new report, showing that the richest 85 people in the world are worth as much as the poorest 3.5 billion. The stark inequality we’re experiencing isn’t simply a problem caused by the Great Recession. In fact, over the past 35 years, the average pay for a CEO has risen by 875 percent while an average worker’s pay rose by just 5 percent (adjusted for inflation).
Across Iowa, we find ourselves in a similar situation. In a survey we commissioned in early January, 60 percent of Iowans believe the gap between the rich and poor is getting bigger in our state, and with good reason. The number of children living at or near poverty nearly has doubled over the last decade; 40 percent of Iowa school children are eligible for reduced price or free lunch — 10 years ago it was just 27 percent. Those children are at a much greater risk to fall behind in school, not graduate and not attend college.
It’s no wonder so many are struggling, considering family incomes have grown in Iowa by only $111 over the past two years, or just 0.2 percent. Without opportunity for their parents and with income growing at a snail’s pace, we are preventing a generation of Iowa’s children from reaching their full potential.
If you’re among the 85 wealthiest in the world (or among the wealthiest in Iowa), maybe you don’t give any of this much thought. But you should. Because when workers suffer for lack of opportunity, their wages don’t keep pace with the cost of living, and there are fewer customers pumping money into the economy. A majority of leading economists believe our economy is being held back by weaker purchasing power for the middle class, because of inequality and extremely low wages, according to the Associated Press.
Even conservatives should be concerned, because taxpayers foot the bill when wages remain low. Businesses paying poverty wages rely on government assistance for their employees to make up the difference, driving up our state and national debt.
Raising the minimum wage and continuing to increase it in the future would be one step in the right direction toward addressing inequality. Giving our public schools every resource they need, from K-12 to community colleges and higher education, will help the next generation receive the opportunities it needs.
Most important, we must encourage our local and national representatives to do whatever it takes to ignite the potential of the middle class, by providing opportunities for every Iowan and American.
Closing the gap between the rich and poor will mean families with more money in their pockets, more profit for businesses and less government spending. Everybody wins when everybody does better, but it has to start with a stronger middle class.
Iowans take pride in being good neighbors. We know that when one of our own falls behind, it’s in our own best interest to look out for them. We know our state works best when we remember our responsibility to each other as members of the same community. For too long there have been too many left behind, and it’s past time we put our spirit of community to work to do something about it.
Matt Sinovic is the executive director of Progress Iowa, a statewide, multi-issue organization focused on research, education and advocacy regarding Iowa public policy. More information at progressiowa.org. Comments: firstname.lastname@example.org