Ah, nostalgia. Remember the 1950s? When a man could get a full-time job without any student debt, buy a house and support a family? He worked until he retired, and then his job would pay him a pension. Economic security. Stable neighborhoods. Home ownership. A parent at home full-time. Enough energy to devote to Church membership and volunteer work. Glorious days. [fn 1]
The 1950s was the decade in which the middle-class boomed. The Gilded Age, with its filthy rich robber barons reigning over a poverty-stricken lower class, was far in the past. In the 1950s, everyone shared in America's wealth.
Shall we talk about just a couple aspects of the economic situation that made it all possible?
Strong Unions
The history of labor rights in the USA is violent. From railway workers strikes in the 1880s to the coal miners' strikes in the 1970s, laborers have had to fight for safety on the job and decent living conditions. In the 1950s, about 35% of Americans were in labor unions [source]. The rights won by labor unions spilled over into other workforces [source]. Unions are why we have 40-hour work weeks, weekends, paid holidays and sick days and overtime pay. Anyone who works full-time should be able to pay the bills and have a little extra to help out a neighbor or splurge on fun vacation.
Here's a chart comparing the fall in union membership to the fall of wages in the general population.
[Source: The Huffington Post article dated Sept 18, 2013.]
There has been a surge in interest in labor unions in 2023. Currently, about 14% of the population is in a labor union [source]. Strikes are popping up all over. This week, service workers in California started striking, and the VFX artists who work for Marvel voted to unionize with IATSE (International Alliance of Theater Stage Employees). The WGA strike and the SAG AFTRA strike continue (basically all of Hollywood is on strike). The Teamsters Union voted to authorize a strike, but then the employers conceded to the Teamsters' most pressing demands and averted the strike. Last December, railway workers threatened to strike. Congress shut down that idea, and later, the railway workers got most of what they asked for in their threatened strike (sick days).
While Walmart posts huge profits, some of their employees qualify for food stamps and don't have guaranteed hours or a set schedule. How can you arrange for childcare, or work a second job, when your employer refuses to tell you what shifts you'll work? We could go through several industries. Take shipping. During the pandemic, Amazon and UPS raked in billions in profits. How much of that profit trickled down to their employees? Not much. Do you know anyone who works as a delivery driver? I do. They don't hire enough employees. It's cheaper to have one employee do the work of two. Overtime is just time and a half, rather than two full salaries. Paying benefits for one employee is half the cost of paying benefits for two employees. Short staffing saves company owners dollars upon dollars, but it destroys the quality of life for their employees. Back-filling all of those jobs and ending mandatory overtime was one of the Teamsters Union's demands. Unions are insisting that companies spend a little less on stock buybacks [fn 2] and little more on employee wages and hiring enough people so that a delivery driver can go to a Parent-Teacher conference without getting fired.
Unions and collective bargaining agreements are the best way to end short-staffing and make sure anyone working full-time (yes, even the barista at Starbucks) earns enough to live on.
Record profits are unpaid wages.
The Maximum Wage
Did you know that in the 1950s, the USA had a maximum wage? Anything you earned over $150,000 in 1951 was taxed at 90%. $150,000 in 1951 is about the equivalent of $1,891,000 today. We'll round up and say that's $2 million in today's money. Please note that due to progressive tax brackets, high earners did NOT pay 90% of their income in tax. They paid 90% of amounts over $150,000. Plus there were deductions and a few loopholes so the actual taxes paid were less than 90%. Still, it's hard to imagine paying an athlete $50,000,000, or paying a CEO $56,000,000,000 if the income tax was 90% of amounts over $2,000,000.
Corporations get a tax deduction for wages they pay. Everyone loves tax deductions! In the 1950s, if a corporation wanted to pay lots and lots of wages to take all those lovely tax deductions, it hired 200 people and paid them all $50,000 each. That gave the corporation a tax deduction of $10,000,000. Now that the USA is not taxing exorbitant salaries at discouraging rates, a company can get the same tax deduction by paying the CEO $8,000,000 and paying its 200 employees $10,000. (Numbers vastly simplified for purposes of the example, obviously.) The point is that if one person can't hog all the income (because taxes will take it anyway), then income is distributed more evenly.
Here's a chart of the wage gap between the highest and lowest earners since 1950. Notice the lines beginning to diverge in the 1980s, when Ronald Reagan basically ended the cap on wages by lowering the highest tax brackets.
[source]
Support a strong middle-class. Bring back the maximum wage.
Laissez-Faire Capitalism
You've probably heard the phrase "late stage capitalism" used to describe bad economic circumstances. Income inequality, environmental injustice, poverty, people who can't afford health care -- all this is due to late stage capitalism.
I don't believe the harm done by late-stage capitalism is inevitable, nor do I believe it's irreversible. What we've got now is laissez-faire capitalism, in which the government (*cough* Republicans *cough*) is insisting the free market be unfettered by government constraints like safety regulations, making corporations clean up their messes rather than pollute air and water, and treating their workers like human beings. A totally free market produces a filthy rich ruling class [fn 3] and a poverty-stricken and suffering underclass. We're seeing this develop before our eyes, as the United States slides back towards the Gilded Age dynamics.
Government constraints can save capitalism and return the middle-class to its former prosperity. It isn't the hard work of laborers that will do this. It isn't the voluntary generosity of business owners that will do this. Laws do this. Laws insist that business owners acknowledge the humanity of their workers and treat them like human beings. Laws refuse to allow wealth to accumulate through high taxes on excessive income and wealth transfers at death. Laws have to regulate the cost of life necessities - either by price caps (epipens and insulin should be dirt cheap), or by setting a minimum wage high enough that a worker can afford life necessities. Laws force companies to stop polluting air and water.
There's only one political party willing to do this - the Democrats. Republican economic policies are sending us right back to the Gilded Age.
The LDS Application
But Janey! Why are you talking about politics and economics!? This is an LDS-themed blog! Stick to religion!
Jesus talked about economic matters a lot. Not just taking care of the poor, either. Jesus went on harangues about rich people. Rich people are headed for hell. It's easier for a camel to go through the eye of a needle than for a rich man to get into heaven (Matthew 19:24). In Luke 16, Jesus tells the story of the beggar Lazarus going to heaven while the rich man who didn't help him burned in the fires of hell. Jesus told a parable of a rich man who had to build bigger barns to have room for all his riches, and when he died that night, God called him a "fool" and said he was not rich towards God (Luke 12:16-21).
And who can forget this epic exhortation: "And I [the Lord] will be a swift witness against … those who oppress the hireling in his wages!" (3 Nephi 24:5).
Joseph Smith wasn't a fan of rich people either. The United Order and law of consecration didn't work out in practice, but his economic ideas were based on economic equality.
This is a religious issue. If we're to save those unfortunate billionaires from burning in hell, churches absolutely must step in and start talking about economics. This isn't just about economic policies that will create one-income families and stable neighborhoods again. No, this is also about giving billionaires a chance at heaven. Come to Jesus, help the rich repent, vote Democrat.
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[fn 1] It wasn't idyllic for people of color, disabled people and LGBTQ+ people but we'll let that slide for purposes of this discussion.
[fn 2] Stock buybacks. Do you know what stock buybacks are? Trump and Mitch McConnell passed a huge tax cut for businesses and wealthy people (middle-class people got a cut too, but the BIG BUCKS went to businesses and wealthy people). The idea is that businesses will take those tax cuts and make their businesses better. Ha! What actually happened is businesses took that money and spent it on stock buybacks, which means the money went to the wealthy business owners. So many companies did this after Trump's tax cut that the SEC has now drafted new rules about reporting stock buybacks so we can all watch our tax cut go to the millionaires and billionaires.
Let's talk about Bed, Bath and Beyond's bankruptcy and how rich, selfish people screwed over their employees. BB&B took that tax cut and spent it on stock buybacks in 2021, which meant that the company owners pocketed millions of dollars. Then, oops, BB&B couldn't pay its bills and declared bankruptcy in 2023, putting 30,000 employees out of work. Tax cuts go into the pockets of the already-wealthy; they don't stimulate the economy.
Here's a nifty little tidbit about stock buybacks by the railways: "a handful of major rail companies reported more than $10 billion in buybacks and dividends over the first six months of 2022. Meanwhile, workers who try to visit a doctor amid a global pandemic continue to be disciplined, leading to higher staff turnover and soaring injury rates." [source] To restate that: the railway companies gave their owners $10 billion dollars within a six month period while also refusing to hire enough employees so that railway workers can take a sick day.
[fn 3] When I'm talking about rich people, I'm talking about the top 1%. I'm not talking about someone with $5 million in their retirement account and a vacation home by the seaside. I'm talking about the people who own multiple mansions, a private jet, have the authority to refuse to let employees take a sick day, and control entire sectors of the economy.
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Questions:
- Are economic policies also moral policies?
- Why do Churches focus on sex and gender issues and ignore economic issues?
- Should churches speak out about economic issues?
- Jesus never said gay people go to hell, but he said rich people go to hell and he repeated that multiple times. Should we conclude that rich people are in more danger of eternal damnation than gay people?
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