The unemployment rate is approaching peaks not seen since the Carter-Volcker-Reagan inflation-killing recession of almost thirty years ago, while the employment-to-population ratio is approaching lows not seen since then. In the intervening years, America has become vastly more unequal in how it distributes its income and wealth. This dynamic is like a giant scissors that is cutting the American social fabric in half—really, more like into one-tenth and the other nine-tenths.
Last time, the way that bottom-ninety-percent of Americans dealt with the problem was to increase labor force participation and employment. The women went to work. Because wages are sticky downward, and the un- and under-employment pool is approaching twenty percent of the labor force, the current collapse of effective demand is creating a class of neo-serfs who are experiencing steep declines in incomes. Companies do not cut the pay of existing employees; they low-ball new hires. You may be in this class, or one or more of your neighbors might be.
How to achieve a just distribution if corporations won’t do it, and government won’t raise taxes on the rich at this time of greatest-ever need of our government? You can make gifts of up to $10,000 to anyone tax-free to them (it’s after-tax income to you). Gifts to deserving kids trying to make it through college in these hard times might be especially worthwhile.
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