My Dinner With the 1 Percent: The Fight for Higher Wages Means Confronting the Greed of the Rich
Posted on Sep 4, 2014
But when it comes to corporate decision makers such as those represented by the U.S. Chamber of Commerce, they face hostility and ridicule. In fact, as a recent personal experience demonstrated to me, the wealthiest Americans who control the purse strings of corporate America may actually believe the lie that raising wages is unnecessary and that today’s workers are better off than in the past.
A college friend who works as a business executive was passing through Los Angeles, where I live, and invited me to join him for drinks at a restaurant in downtown L.A. so we could catch up. When I arrived, he was still having dinner with some of his work colleagues. Indicating to me that they squarely fit into the category of the famed “1 percent,” he introduced me as his “radical journalist and activist friend.” Aside from me and my friend, there were two white men, one black man and an East Asian woman seated at the table. The restaurant was exceedingly fancy, and the menu consisted of sufficiently haute cuisine dishes, with prices to match. Bottles of expensive wine washed down platters of soft-shell crab, all on the company card.
Soon enough, the conversation veered into a political direction as the men (sadly, the woman didn’t speak up), lamented President Obama’s fiscal policies, which they perceived as excessively harsh toward the rich.
Square, Site wide
One of the two white men—let’s call him Mike—dismissed the notion altogether, calling my argument against inequality “a straw man.” He then launched into a lengthy and condescending lecture in the form of a story from his college days of his fellow students going through a psychological exercise to find that their political positions became less entrenched when they debated on the side of a position they opposed. That story was meant to make the point that we cling blindly to our favorite ideas. According to Mike, ensuring everyone got an equal piece of the income pie was not the solution to economic injustice. Instead, what was needed was a way to increase the size of the entire pie.
This line of thinking is popular with the very wealthy. An analysis by the conservative think tank Cato Institute essentially says the same thing: “The single, most effective way to reduce world poverty is economic growth.” The idea is that if corporations increase their wealth, we all benefit. But although corporations did recover spectacularly from the Great Recession, posting record profits, they replaced middle-income jobs with low-income ones.
Corporate executives, like the people I sat at the dinner table with, set their own salaries and compensation packages, which have reached new, obscene heights. Today, the average CEO gets paid at a rate almost 300 times that of the average worker. I asserted to Mike that the size of the pie matters little if the wealthy are still hogging the majority of it. Relative incomes matter more than overall incomes.
The African-American man at the table—let’s call him Joe—as if to confirm just how absurdly rich he is, let slip that during a recent trip to another city to see a world famous rodeo, he spent $10,000 on a hotel room for a single night. Joe seemed to have little interest in capitalist ideas of wealth creation versus organized labor’s struggle for economic equality. Joe was interested only in tax rates and his take-home pay. And to that end, he railed against Obama’s increase in taxes for the rich.
The 1 percent, that is people who make almost $400,000 a year, paid only 23.5 percent in taxes in 2011, the most recent year for which the IRS has final data. When Joe asked me how much I thought 1 percenters should get taxed, I didn’t hesitate. “Ninety percent,” I replied. “Let’s go back to the tax rates we had under FDR” (actually tax rates peaked at 94 percent for the rich during the Roosevelt administration), to which Joe sputtered and laughed hysterically, imagining I must be joking.
At that point, Mike jumped back into the conversation, insisting that Americans are better off today than they were 40 to 50 years ago. I insisted that that was patently false, and that average American workers were making less in inflation-adjusted amounts than they were several decades ago. This analysis in Bloomberg—hardly a leftist rag—demonstrates in a shockingly clear graphic titled “The Great Retrenchment” how male American workers ages 35-44 have seen their wages fall 17 percent over the past four decades. Changing the subject, Mike turned to Joe and asked if he wanted to return to “the good old days,” making an obviously racially loaded point.
Interestingly, everyone at the table seemed to either have relatively progressive values on issues of racial equality, women’s reproductive rights and even gun control, or were ambivalent on social issues. On economic policies, however, they were united in their defense of the current system of enriching the rich. In fact, so ardent were they in their championing of unfettered capitalism that it seemed to be the moral driving force of the group.
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