agree that people ought to be paid only according to how hard they work and
how onerous their work conditions are. To attain these Just Rewards we must
reduce and ultimately eliminate reward for property, power, and output; reduce
and finally eliminate the impact of race and gender on remuneration; and
increase reward for effort and sacrifice to appropriate levels.
percent of people in the U.S. economy receive exorbitant income from
capital. At the extreme, people like Bill Gates earn many billions
yearly. At the bottom, millions of
householders earn modest returns from small stock holdings. About 20 percent of the
population monopolizes productive skills, decision-making levers, and other variables
enhancing their bargaining power. At the high end of this group athletes and movie stars
earn tens of millions of dollars
yearly. More typically folks who monopolize the levers of day-to-day decision making and largely
control and define their own work and often that of others – including
doctors, lawyers, managers, high level engineers, and elite university faculty, among
others — earn yearly incomes ranging from roughly $80,000 to $500,000 and
more. It is hard to figure an average for this "coordinator class," but
$300,000 a year is probably
The top one percent
of the population holds about 40% of the wealth in the U.S. Bill Gates alone has just a bit more
wealth than Zimbabwe, Ghana, Iceland, Panama, Costa Rica, Kenya, El Salvador,
and the Dominican Republic combined. The next 9% holds another 33% so that the
top 10% holds just under three-quarters of the wealth of society. The next 10%
holds about 11.5%. The next 40% holds about 15%. The last
40% of the population holds about one half
a percent of the wealth. Similarly, the average pay in the top twenty percent
eight times the average in the bottom 40%. The average pay in the
top 1% is over 30 times the average in the bottom 40%. The
average U.S. CEO made 209 times the pay of factory workers in 1996.
Our first demands for Just Rewards
take some of the income or wealth from the capitalist and coordinator classes
and redistribute it either to the general social good, or directly to the most
needy in society. Here are
some typical options.
taxes take wealth that oughtn’t accrue to some folks and return it
to the social pot, thereby reducing excessive disparities. The ultimate
is a 100% profit tax since
profit does not reward effort or sacrifice. However, in addition to an
ultimate goal, we need short-term demands, attainable in the present while
aiming for the future. It is like building a skyscraper: You don’t erect
girders for the top floors before you lay them for the lower floors. Just as
the first tasks in building a skyscraper need to support those that come
later, winning short-term economic demands needs to reward deserving constituencies
and also strengthen their dissent and empower them to win more in the future.
A movement for a participatory economy
might sensibly demand a 50% profit tax.
Wealth, Inheritance, and Luxury Goods Taxes
wealth tax makes it hard
to retain great wealth. An inheritance tax makes it hard to bequeath great
wealth to offspring. A luxury tax takes a cut whenever someone buys something
beyond what most people can afford. Again, a 100% inheritance tax above
some level makes moral sense, as does a high wealth tax that reduces holdings
before they are bequeathed. And revenues from both these taxes could finance desirable public programs in health care, education,
communication, etc. In a few years even a 30% wealth tax would
greatly reduce disparities and generate public funds to rid society of homelessness, hunger,
inadequate schools, and other offensive features.
to institutional, organizational, or personal advantages
also violates the norm to remunerate only effort and sacrifice and is therefore neither moral nor efficient.
As one way to move toward Just Rewards regarding income, a movement for a
participatory economy might demand highly graduated income taxes.
With all the above
tax proposals it is essential that
government isn’t spending tax revenues on welfare for the rich, giving it all back
to the wealthiest sectors. Rather the demand needs to be to rebuild
inner cities, develop public health systems, improve public education,
owning capital and monopolizing conditions or skills that enhance bargaining
power, racism and sexism also distort remuneration in many
While the typical white household
the U.S. had
$18,000 in financial wealth (net worth minus equity in owner-occupied housing)
in 1995 (the latest year for which complete figures are available), the
typical black household had just $200 and the typical Hispanic household had
zero. Similarly, in 1991, 39.2 percent of white American households had
incomes less than $25,000, but among Hispanics 54.4 percent were below $25,000, and for black Americans 60.6 percent
were less than $25,000.
women who work outside the home earn only 62% as much as men, which is up from
47% in 1980 and from 38% in 1970 (struggle does pay off), but still obviously
inadequate. Women who work full-time earn three-quarters of what men do, up from
the three-fifths that prevailed through most of the 1970s.
Likewise, despite great advances in the past forty years, people
races and genders still don’t generally get comparable work. Instead, by
a variety of mechanisms jobs are often allocated on the basis of race or
gender. In that sense, the culture and conditions of U.S. employment have for
a long time acted as a kind of “affirmative action”
for whites and men.
that reduce and ultimately eliminate race and gender effects on income are ones that equalize pay for comparable work, that remove barriers to entry to better jobs,
facilitate entry to fields with currently skewed participation. Typically advocates of existing
relations try to portray affirmative action in ways that divide workers from one
another. One obvious solution is to have affirmative action both for
overcoming caste oppression (race and gender) and class oppression as well. A
second solution is to finance affirmative action out of funds redistributed
from the top, coupling affirmative action with demands for full employment,
etc., so it won’t result in worsening conditions for white male workers
already suffering the impoverishment and indignities of capitalism.
capitalists and coordinators in modern capitalist economies are normal workers who lack capital, lack
inflated bargaining power, work without significant say over their conditions,
follow orders given by others, and are rarely remunerated at an appropriate rate
for their effort and sacrifice. Perhaps one out of five adults in the United
States fall in the coordinator or capitalist classes. The remaining four
fifths — the working class — receive relatively meager income and accumulate
minimal wealth despite that they expend more effort and sacrifice in their
work than coordinators and capitalists (or suffer unemployment, which is even
worse). The third set of programmatic demands for Just
Rewards seeks to raise remuneration for those being paid little, but expending great effort and
sacrifice in work. There are many approaches.
the income accruing from various taxes should support government full
employment policies that will have the following beneficial results: (1) the unemployed gain employment
and income, (2) all workers benefit from increased bargaining power due to
reduced fear of being fired, and (3) society
benefits from additional output guided by social choice and
not profit-seeking, as we will see in future commentaries on
Minimum wage supports
the minimum wage, in conjunction with attaining full employment, puts a floor on
personal income. However, minimum wage jobs are almost always the most
onerous. Thus, if we were to reward only effort and
sacrifice, they should be the highest paid in society, not the
lowest. Still, short-run program must move in the right direction before it
can gather momentum and finally win magnificent new structures. Thus a demand for a minimum wage that
is 60% of
the average income for the economy would seem like a good short term demand.
To howls that this would bankrupt many businesses, an answer might be to reduce
payroll at higher levels and to use accrued profit and property taxes to
subsidize worthy smaller operations made "needy" by the program.
Social wage payments
“social wage” is a loose term for government policies that benefit working
people. This includes expenditures on public health care, education, housing,
and infrastructure, or even price supports on goods or food so as to reduce
income demands on the poor. Policies which increase allocations for the
"Social Wage" redistribute society’s product to benefit those in
need, and thus also move society toward Just Rewards.
Reverse income taxes
Just as it
is possible to collect taxes, it is also possible to pay reverse taxes. Since
economy doesn’t directly remunerate according to effort and sacrifice, the government can "tax and pay" to correct the
deviations, not only taking away from those who are over-rewarded, but also paying out
to those who are under-rewarded. The ideal
demand is for a socially regulated accounting of job types
that generates a
measure of their broad implications for effort and sacrifice, plus a reverse
payment for those that are under-remunerated by the market system. In this
manner the funds accrued from profit, wealth, luxury, inheritance, and income taxes can be redistributed not only
to social wage payments for public education,
health care, etc., but also as reverse taxes paid directly to workers earning less than their
job requirements warrant.
Job actions for higher wages
a program seeking participatory economics will also support union and rank and
file efforts to win higher wages by direct actions, strikes, etc. This not
only raises incomes that are currently too low, it can cut into those that are
too high, and it should involve activism that prepares the organizational means and
commitment to win further gains.
Fighting For Just Rewards in a Movement for Participatory Economics
a movement that seeks Just Rewards in society has to practice what it
preaches. This is necessary (a) to be believable, (b) to expand its own understanding
of what its aims entail, (c) to provide hope through its internal practice, and
welcome and nurture diverse participation.
This last is especially important but rarely enunciated. What underpaid person
believe in the efficacy or the honesty of a movement that talks about attaining Just
Rewards in society, but doesn’t practice Just Rewards internally? A
consistent movement for a participatory economy should have its own internal dues financing and wage rates
exceed its Just Reward demands for society.