Labor Day Redux: No, the Economy Is Not Good for the Little Guy

On this Labor Day 2006 I present a blog posted earlier on April 3, 2006. It is a call for clarity on the state of the American economy. GDP alone is an incomplete indicator of its overall health. GDP alone fails to accurately reflect the uncertainty felt now not just by working-class and poor citizens, but by the small and medium-sized business owner. If capitalism is to be saved, as it was in 1933, it is up to progressive religious foks such as ourselves who have again embraced the old Social Gospel and Distributive Justice heritage that ultimately served as the underpinnings for the last Golden Age of Liberalism.

It befuddles me to no end to hear shallow pundits such as Chris Matthews and Bill O'Reilly tell us that "they can't understand why President Bush doesn't get credit "for the good economy."

These millionaire talking heads, so disconnected from the real world just don't understand one simple point: if you are a Fortune 500 Corporation or any of the major shareholders or CEOs thereof, they economy is fine and dandy; however if you work on a GM assembly line or or your middle-level positiion is about to be outsourced these are dicey times.

But how do we explain this discrepency?

Simple: Ever since the rise of movement conservatism in 1980, there has been a dicernable failure by our government to effect Distributive Justice.

To that end, liberals must again prove that they will provide Americans with a truer sense of personal security. This goal is attainable simply by using the canons of distributive justice capitalism; the means society uses to allocate its economic resources in proportion to the individual’s needs. But to be truly effective, this conversation must be framed within the context of satisfying the greater common good through individual contribution, i.e., the responsibility every citizen has for maintaining the American institutions upon which all citizens rely upon for individual self-development.

Distributive justice democratizes capitalism while leaving intact the incentive for meritorious achievement. While recognizing the employer’s right to a just compensation for proper management and economic risk it demands that that the laborer ceases being treated as a commodity but as a dignified individual. It accomplishes this goal not by focusing upon the endless receipt of public assistance, but by emphasizing the dignified compensation for honest labor. Such compensation requires the proportionally just distribution of profits to each individual who contributed to the production of a given item or a provided service. Expanding the distribution of profits extends opportunity to a greater number of individuals by increasing their ability to acquire and own private property. Increasing both private property ownership and its means of acquisition are major steps forward in satisfying the common good goal of self-sufficiency and individual economic security to a greater number of individuals.

Conversely, conservatives as well as neoconservatives limit overall opportunity. They do so by implementing economic policies that tend to distribute the lion’s share of profits more on a basis of privilege and power than by any meritorious commutative measure of contribution. That in turn adversely affects the average individual’s ability to acquire property. Rather than recognized as a vital contributor to production, labor is denigrated, often viewed merely as “a cost� of production to be contained. Such attitudes deny economic security to a greater number of Americans because the emphasis of economic priorities is concentrated upon the wealth creation abilities of CEOs and shareholders of large amounts of outstanding stock, the powerful few that have already amassed superfluous assets.

An emphasis on the just distribution of profit clarifies the economic status of all individual agents of wealth creation. Its absence from the dialogue allows for the dissembling of the complete economic state of the nation. For example, business indicators for much of 2005, if left incompletely translated, paint a misleading picture of an all inclusive booming economy. That is because of the disproportionate emphasis placed upon large corporate profits and lack thereof upon individual wages.

Corporate earnings are not the most reliable indicia of overall economic well being. They alone do not account for how equitably profits are being translated into workers’ wages and purchasing power. Such incomplete analysis conveniently overlooks individual standards of living which can actually decrease during times of increased corporate profit. If a highly disproportionate percentage of a given business’s profit goes to either upper management salaries or dividend payments instead of to the individual laborers who significantly contributed to the creation of such profit then poverty can thrive in the midst of wealth. Such distribution defies any equitable notion of commutative justice.

Likewise employment statistics that solely indicate the number of jobs created do not tell a complete story. The overall standard of living will still decrease if an increasing amount of new jobs pay a decreasing amount of wages and benefits. As Gene Sperling observed, “Nearly half of workers displaced between 2001 and 2003 who found new full-time work by February 2004 agreed to take lower pay, according to the Department of Labor's Displaced Worker Survey.� Such reality exposes the fallacy of trickle down economics. Again, distributive justice considerations present a clearer, more accurate economic picture.

It is time we as Christian Liberals once again start discussing economics in terms of Distributive Justice. It is the missing definition in the national dialogue of the state of our economy. As Monsignor John A. Ryan explained in the first half of the Twentieh Century, a just, living wage necessary for self-development is an essential Social Justice issue. It logically follows from Rerum Novarum in the 1890s, The Bishops Plan of 1919 and eventually formed one of the foundations of the New Deal.

Distributive Justice capitalism is an idea that has gone into hibernation. For the sake of a more just society it is time for an overdue wake-up call.