Another semester brought me another opportunity to contribute to the Alligator Opinions section. As I sat down and faced my laptop, preparing to write my first piece of the new year, I thought I should tackle the benefits of reading or my collegiate career so far. I wanted to stay away from politics at least for one week — we all want to start the semester on a good note.
Unfortunately, I just could not stay away from politics. Instead of a fluff piece, I decided to write an article that deals with a problem that grips the nation: economic inequality.
Inequality is a word that is thrown around by many politicians. New York Mayor Bill de Blasio made economic inequality the central theme of his inauguration last week. President Barack Obama promised the American people the focus of his next three years in office would be battling economic inequality. Their use of the word directly insinuates the rich grabbing more and more wealth from Americans with lower incomes. But this usage is a bit misleading. You cannot look at the American economy as a pie chart.
Before we dive further into this debate, let’s break down this issue. I would contest most people are OK with general economic inequality. To illustrate my point, picture Businessman A and Businessman B.
Businessman A works hard at his job and is an efficient worker. Businessman B is lazy and not a good worker. As a result, Businessman A gets paid more than Businessman B. Most people are OK with this inequality because one worker succeeds because of his hard work.
The larger issue is social mobility. In this example, Businessmen A and B both work hard and are productive and efficient workers, but neither of them can climb the economic ladder. Social mobility is not an issue of rich versus poor. It is an issue of whether the hard workers of the country can achieve economic success by virtue of the American values of determination, drive and hard work.
In our economy, social mobility seems out of reach for most recession-hit, middle-class Americans. The top income earners remain unaffected by the bad economy while those below them cannot say the same.
The way to fix social mobility is to make it easier for middle-class Americans to climb up the economic ladder. How does one do this?
First, don’t do what de Blasio and Obama have proposed. Both argue for increased government action by way of more taxes, increased welfare, increased minimum wage and more regulation. There are a few flaws in this approach; you cannot simply legislate your way into prosperity. President Lyndon B. Johnson tried to legislate America into prosperity with the Great Society, but it is a tried-and-failed concept of the left.
Second, make it easier for small businesses to thrive. Deregulation is the way to go. One can make the case for tort reform in this same vein. The big businesses can afford top-tier lawyers to navigate the complex legal system. Give the little guy the ability to become one of the big guys. Small businesses make up the backbone of our economy and should have the ability to grow and prosper without complex regulations.
Third, reduce the cost of education. Studies show that college graduates earn higher incomes than non-college graduates. That being said, crippling debt from people’s college years discourages them from buying and consuming goods, which is not good for the larger economy.
The American dream is based upon the notion that with hard work and determination, the fruits of your labor will lead to economic success. In this economy, many find it hard to climb the economic ladder. Optimistically, we can hang our hats on the fact that we are Americans, and Americans, after all, find a way to solve the problems they face. We should not pit the “haves” against the “have-nots.” We should advocate that the “have-nots” are the “soon-to-haves.”
Michael Beato is a UF economics sophomore. His column runs on Wednesdays. A version of this column ran on page 6 on 1/8/2014 under the headline "America’s problem is lack of social mobility"
