Only in Kazakhstan, alas: The maximum wage fight

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A friend on the left says it may be time to stop fighting for a higher minimum wage and start fighting for a maximum, like those mild compensation limits in the Obama bank bailout bills. But it's Kazakhstan's Prime Minister, Karim Masimov, who's shown the way on this. He says "executives at state-run firms and banks" should make no more than he does, in order to "prevent social unrest." He makes a modest $4,700 a month -- he wrote on his blog -- but it's nearly 12 times the average. Mining and oil execs get way more. His proposal is "likely to be implemented immediately," though only in Kazakhstan, alas.

Economic inequality has yawned ever wider in recent times, especially in the United States, source of the current crisis. Since 1968, when U.S. society was at its relatively most equal, the gaps have increased sharply, at the expense of the middle groupings. Average worker earnings there are now worth less than in 1973, while CEOs, who made 45 times as much as workers then, now get 300 times as much. This has long been a blatant sign of moral rot. It is now at a point where the economic implications are severe, too. How so?

Some of it is the amounts involved. Citizens for Tax Justice says "the Bush tax cuts saved the top 1 per cent nearly half a trillion dollars" from 2001 to 2008. Their 2008 tax cuts were larger than the combined U.S. federal budgets for education and environmental protection. The relatively few, really, really rich are now a serious source of diverted public spending.

Comparable places, including Canada, have so far avoided this extreme polarization through progressive taxation and mild redistribution via social programs. The U.S. now profiles more like an underdeveloped country where the gap feeds on itself. The absurdly rich use their wealth to buy politicians who will further cut taxes on them, and cut social programs, too, since they can afford their own health care, education etc. The poor at the far other end lack resources to fight back. What's the alternative? Narrowing that gap, by rebuilding a healthy middle or working class that can't afford its own health care or education and sees the benefits of taxes, well spent. But how?

I say this with no animus or "class anger." But for the sake of economic, social and political well-being, there are too many people who are absurdly, stupidly rich. There are also too many poor, as always. But at this particular time, the problem is the overrich.

There is an easy, non-violent solution: Move some of their excess wealth to the people in the middle, since it all, according to the stats, came from there anyway. It can be done democratically -- via taxation and redistribution through social programs. And otherwise, like making unionization easier, since unionized workers tend to earn 30 per cent more than non-union ones. That means they wouldn't need to plunge into heavy debt to fulfill their duty to consume, which would, in turn, undercut the "financialization" of the economy that led to the banking-credit fiasco. And, of course, the maximum wage.

It's true this will evoke charges of class war and socialism. But class war has been made by the other side for decades; the casualties are strewn all over the battlefield. As for socialism, in the mild sense of public economic leadership -- so what? The last Depression only ended due to public programs. Anyone who says no, it ended with the Second World War, is also right but misses the point that the war was a huge public spending program. Everyone then feared the Depression would return, a result avoided by more public military spending in the form of a Cold War.

Beyond that, prosperity was maintained through developing new areas such as computers and the Internet, built entirely on the public dime, then handed gratis to the private sector. Bill Gates owes all he has, and all he gives away, to "socialism" in that mild, limited sense.

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