Davos showcases the wrong way and the right way to address income inequality.
The World Economic Forum each January lures earth’s government and business elite to the small Swiss ski resort of Davos, where they fret about the planet’s woes.
One recent worry is “income inequality,” a phrase the Left chants more often than Catholics say “Hail, Mary.” Oxfam picked Davos as the right occasion to unveil a report supposedly chillier than an Alpine breeze. The liberal NGO complained that the world’s richest 2,153 people own more combined wealth than do the poorest 4.6 billion people. While that datum is eye-popping, what, if anything, should be done about it?
Oxfam CEO Amitabh Behar told Reuters: “We need to end this, and certainly end this billionaire boom.”
Wrong!
The Left typically would narrow the income gap by making the rich less rich. This thought experiment exposes this approach’s dangerous folly.
Consider two job proposals:
First, Alpha Industries offers you $50,000. Your boss will make $55,000. Income inequality totals 10 percent. Both Amitabh Behar and Senator Elizabeth Warren (D., Mass.) could stomach this.
Second, Omega Enterprises offers you $1 million. Your boss will make $2 million. Income inequality totals 100 percent. Mr. Behar is fuming, and Senator Warren just fainted.
And yet you join Omega Enterprises and smile at your prospects as a soon-to-be millionaire. “Income inequality,” you think. “Who cares?”
Rather than cheer your good fortune, the Left would slap a wealth tax on your boss and grumble about her rampant greed and callous disregard for the poor.
Behar, Warren, and nearly every Democrat and socialist would rather bring the top down than pull the bottom up. The former is ugly, destructive, and usually self-defeating. The latter is moral, constructive, and typically effective.
So, ignore the income gap. Instead, raise the income floor. Help the disadvantaged move from the basement into city-view apartments. Don’t evacuate the penthouse and condemn its residents to the poorhouse.
In an upbeat and eloquent address, President Donald J. Trump told the Davos crowd how his policies are improving the lives of Americans near the bottom while freeing those at the top to prosper, too.
“When I took office three years ago, America’s economy was in a rather dismal state,” Trump explained, “Under the previous administration, nearly 200,000 manufacturing jobs had vanished, wages were flat or falling, almost 5 million more Americans had left the labor force than had gotten jobs, and more than 10 million people had been added to the food stamp rolls.”
“I knew that if we unleashed the potential of our people, if we cut taxes, slashed regulations — and we did that at a level that’s never been done before in the history of our country, in a short period of time — fixed broken trade deals and fully tapped American energy, that prosperity would come thundering back at a record speed,” Trump continued. “And that is exactly what we did, and that is exactly what happened.”
The results of Trump’s efforts to boost the poor rather than bash the rich have been swift and stunning.
“In the eight years before I took office, over 300,000 working-age people left the workforce.” Trump said. “In just three years in my administration, 3.5 million people have joined the workforce. Ten million people have been lifted off welfare in less than three years . . . The average unemployment rate for my administration is the lowest for any U.S. President in recorded history.”
Even more encouraging, those who are filling these jobs are not just moving from one office or shop floor to the next. They are reporting for work after spending recent years on their sofas.
“In the fourth quarter of 2019, 74.2 percent of workers entering employment came from out of the labor force rather than from unemployment,” the best such showing since 1990, the White House Council of Economic Advisers reports. “From the start of the prior Administration’s expansion period until the 2016 election, the prime-age labor force [25-54] shrank by 1.6 million,” CEA discovered. “Since the election, the prime-age labor force has expanded by 2.3 million people.”
And those who toss and turn over income inequality finally can get some sleep. As Trump observed in Davos: “Workers’ wages are now growing faster than management wages. Earnings growth for the bottom 10 percent is outpacing the top 10 percent . . . Since my election, the net worth of the bottom half of wage earners has increased by plus-47 percent — three times faster than the increase for the top 1 percent.”
In short, as Trump deservedly crowed: “Years of economic stagnation have given way to a roaring geyser of opportunity.” The president elaborated, “For three years now, America has shown the world that the path to a prosperous future begins with putting workers first, choosing growth, and freeing entrepreneurs to bring their dreams to life.”
Even better, President Trump expounded: “In the United States, we are building an economy that works for everyone, restoring the bonds of love and loyalty that unite citizens and power nations.”
Rather than Oxfam chief Behar’s wish to “end this billionaire boom,” let’s start a millionaire boom. Let’s have a thousandaire boom. And in very poor countries, let’s see a hundredaire boom.
Regarding income, no one ever should be dragged down. Instead, everyone on Earth should chant: “Up, up, up!”