Start with a set of variables.
x = poverty-wage earners
y = the short-term unemployed
z = the long-term unemployed
Add them up, and one of the many possible titles for the resulting summation could be “People Who Can’t Participate In The Economy.” The denizens of this XYZ group can’t buy homes or cars or flat-screen TVs, they can’t purchase apps indiscriminately from the iTunes store, they can’t eat out regularly at TGIFriday’s or check out the new spring line at Banana Republic. Not only do they not have savings or contribute to investment vehicles, many of them don’t even have bank accounts.
For all intents and purposes, this group of people, approximately 30,195,500, representing nearly 18% of the total possible American civilian workforce,* are sitting on the sidelines of consumer culture, unable to meaningfully participate in the economy.
But the bad news, long-term, couldn’t be much worse. There is little doubt that wealth distribution in the United States has become increasingly unbalanced, and the slope is only getting more slippery. Without a comprehensive change to the status quo, it is at least plausible, if not indeed highly likely, that over time the XYZ group will continue to increase. The economy will shrink under the downward pressure exerted by an ever-growing portion of the population that has little or no purchasing power.
When that happens, nobody wins.
Unhelpfully, to date the public reaction to income inequality tends to be highly polarized, as evidenced by groups like Occupy Wall Street, or the bizarre instances of billionaires comparing liberals to Nazis.
What is needed is a sober, transparent and highly public discussion about our economic future, one that is as pragmatic as it is innovative.
The first step is for all concerned parties to admit that (1) we are facing a grave problem with potentially catastrophic consequences that requires action to solve, and (2) at present we do not yet have the tools to solve it.
As is often the case, this first step has so far been the hardest to take.
And as long as that remains true, then we really only have to ask ourselves one question: how many active participants does it take to sustain our economy? Or, perhaps more ominously, how long do we have until we reach that macabre tipping point?
*Numbers calculated from 2010 census date:
approximately 14,895,500 American civilian workers made less than $11,139 in 2010 (the poverty line for that year). 8.9M such workers were recognized as “short-term unemployed” and another 6.4M such workers were labeled “long-term unemployed” in December of 2010. The total civilian workforce recognized by the census in December of 2010 was 153,950,000.