Income Disparity, Brought to You by Corporate America
Abraham Lincoln’s Gettysburg Address is considered one of the benchmarks of American speeches. In it he states that “government of the people, by the people, for the people, shall not perish from the earth.” Delivered in November of 1863, at the height of the US Civil War, its purpose was to highlight the strength of the states by remaining united.
After the US Civil War ended and the 13th Amendment criminalized slavery, the 14th Amendment took hold, which gave emancipated slaves full citizenship, decreeing that “no state shall […] deprive any person of life, liberty, or property without due process of law, nor deny to any person […] the equal protection of the laws.”
In 1882, San Mateo County v. Southern Pacific RailRoad was brought before the United States Supreme Court. Former US Senator Roscoe Conkling argued that the 14th Amendment is not limited to just natural persons. He provided a journal that appeared to show the drafters of that amendment, of which Conkling was one, vacillated between the word “citizen” and “person”. While historians consider the journal to have been a forgery, the Supreme Court did not. Conkling’s argument prevailed and the 14th Amendment was given equal application to corporations.
In 2010, the US Supreme Court appeared to have opened Pandora’s box of corporate influence on politics. In their ruling on Citizens United v. Federal Election Commission, the Supreme Court provided the rights of the First Amendment of the US Constitution, the one that gives all US citizens free speech, to organizations or corporations.
This decision re-affirmed a corporation’s status, as first argued by Roscoe Conklin in 1882, that according to the 14th Amendment, corporations have a sense of “personhood”, therefore, they must be allowed their first amendment entitlement.
This played out, witnessing corporations increase their political funding, support and advertising of political candidates. It’s one of the primary reasons we have seen candidates raise such staggering sums of money for their campaigns.
But a corporation’s influence isn’t just about helping to get people elected. It’s also about wielding influence in the corridors of power and influencing legislation in Washington D.C.
According to OpenSecrets.com, in the past twenty years, corporate lobbying has increased from $1.46 billion dollars in 1998 to $3.46 billion in 2018. This trend of the corporate “person” exercising ever-increasing influence at the expense of the citizen can be seen time and time again. Take the Affordable Care Act, or Obamacare, for example. What started as a good attempt at a universal health plan for Americans, in the end, was a much compromised shell of what it began as.
But perhaps the fact that from 2010 to 2015, the insurance industry had spent roughly $800 million dollars lobbying in Washington D.C. played a role in the concessions made to the Affordable Care Act.
It’s not surprising that in the past few years, the word “corporatocracy” has slowly crept into the vernacular of some Americans, becoming synonymous with “democracy”.
Data suggests that the increased influence of corporations and the power that their money can yield is increasing income disparity.
The Institute for Policy Studies reports that about 140 million people in America (about 43.5% of the population) can be considered poor or low-income. Compounding this problem is that wages for most Americans have more or less stagnated as productivity has dramatically increased. Income for most employees has increased a modest 23% from 1979 to 2017, while productivity has increased 138%.
How does this translate into disparity? Well, as a result of income stagnation and the increased productivity, CEO pay has skyrocketed. The AFL-CIO reports that S&P 500 CEO’s were paid 361 times more than the average worker in 2017; $13.94 million dollars to $38,613.
Conversely, in 1980, CEO pay was just 42 times more than its average worker.
The most commonly used measurement of income inequality is the Gini index, or Gini ratio. This is a measure of statistical dispersion intended to represent the income or wealth distribution of a nation’s residents. It’s measured where 0 is complete equality and 1 is complete inequality.
The Organisation for Economic Co-operation and Development, which tracks the Gini index, has the most recent data from 2017. It ranks the United States as having a Gini index of .39. This is the sixth worst income inequality in the world, just ahead of Turkey, Chile, Mexico, Costa Rica and South Africa, who tops the list with a Gini index of .62.
How this will play out in the upcoming election cycle is still anyone’s guess. But if 2016 is any indication, income disparity, even as it continues to grow, won’t matter to many. It’s quite possible that as the “personhood” of corporations continues to infiltrate and influence policy with a very receptive White House, the disparity and all that accompanies it will be marginalized.
Modern America is in a political quagmire. Inequality across many sectors is growing. Corporate influence on both legislation and politics shows no sign of slowing down, which continues to diminish the voice and influence of the average American. One need only note that twice in the past 20 years, voters have been forcefully reminded that it’s not as simple as “one person, one vote” as two presidents who won the popular vote ultimately lost the election.
Fundamentally, the core of Lincoln’s Gettysburg Address that government “of the people, by the people, for the people shall not perish from the earth,” is still true.
However, the government is moving away from being “of the people”, as more elites get elected into office with the help of corporate influence. The representatives are less legislated “by the people”, as corporate lobbying coordinates and dictates legislation. Lastly, more often than not, lawmakers enact laws that are not “for the people” because they’re more indebted to their corporate constituents than their citizen constituents.
Through crafty legal maneuvering, corporations may have gotten a degree of “personhood” and some of the same rights as people, but it’s safe to say that they were not what the American forefathers meant when they began the US Constitution with “We the people of the United States…“