THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Sunday, September 22, 1996 TAG: 9609190011
SECTION: COMMENTARY PAGE: J4 EDITION: FINAL
TYPE: Opinion
SOURCE: By PAUL M. HUBER
LENGTH: 50 lines
The basic freedoms in our Bill of Rights and Constitution did not make our country a great economic power. Instead, they allowed our country to become a great economic power by promoting a large middle class that has been allowed to participate in the wealth of the nation. Simply put, the economic power of the middle class is the goose that lays the golden eggs. As has been reported in the news, the middle class is shrinking. This trend must be reversed if the United States is to remain a strong, vibrant economy.
Approximately two-thirds of our economy is based in consumerism. That is, one worker's wages allow that person to purchase goods or services generated by other workers; who in turn spend their wages on the product or service generated by the first worker.
Henry Ford seemed to understand the economic power of a middle class when he said he would pay the workers on his automobile production line ``well'' so they could afford to purchase the car they produced. The concept of being able to afford consumer goods above the subsistence level is key to a vibrant and synergistic economy. Conversely, an economic system that has a majority of workers earning a subsistence wage will never generate a meaningful middle class and will never live up to its full economic potential.
The correlation between a large middle class and a strong economy is borne out by the other economically successful countries in northern Europe, as well as England and Japan. These powerful economies also seem to benefit those in the lower economic class because they tend to create jobs at all levels. This is an example of a ``win-win'' economic policy where it is assumed that there is a job for everyone who wants to work.
In contrast, the poor countries of the world seem to have only two classes of people - the vast majority are very poor, and a small minority are very rich. In this economic environment, the vast majority of workers can only hope to achieve their subsistence needs. On the other side of the economic spectrum, the rich have incomes greater than their wants and invest their excess income for their personal benefit rather than invest back into the economy to create jobs. This is an example of a ``zero-sum-game'' economic policy where it is assumed that there are only a limited number of jobs within the economy and there will be high unemployment.
If the United States is to remain a strong economic power, government and corporate policies must encourage a large middle-class. This policy is beneficial for all economic classes. For in a strong, expanding economy, ``lower income class'' is only a relative term. All who are willing to work will be able to share in the wealth of the nation to varying degrees, based on ability. Let's protect the goose (middle class) that lays the golden eggs. MEMO: Paul M. Huber is a Chesapeake resident. by CNB