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 Editorials | Opinions | April 2005 
The Left: Cancun Reflections And U.S. Income Disparity Growth
 Richard Elrick
My recently concluded family vacation to Cancun, Mexico was a wonderful reminder of how fortunate we all are to be living in the United States. But it also served to show how imperative it is for our country not to follow in Mexico’s footsteps by allowing our income disparity gap to continue to grow.
For those few of you who may not know, Cancun is a beautiful location on one of the eastern most barrier beaches of the Yucatan Peninsula. The super-resort was created in the early 1970s by the Mexican government to be the premier resort location in all Mexico. In that regard, it has been more successful than they could have imagined. Like most resort locations, the “Hotel Zone,” where we stayed, and where most of the resorts and tourists are located, makes a wonderful first impression of prosperity for the mostly American tourists to see.
But behind the façade of wealth and economic success of the Hotel Zone, and the hypnotic beauty of the gorgeous blue Caribbean, one does not have to look too far to see the great income disparity and poverty that to a large degree characterize most of the Mexican economy.
Just several kilometers down the resort area’s main transportation corridor, Kukulcan Boulevard, (via a very efficient mass transit system, costing about 65 cents), is the heart and soul of Cancun—“Downtown Cancun,” where the many thousands of hotel, tourist and service sector workers live, shop and reside. While better off economically than most areas of Mexico, Downtown Cancun provided many images and examples of the kind of poverty most Mexicans experience.
Before arriving in Cancun, I had the fortunate opportunity to talk with a fellow passenger who was heading home from a business trip to Miami. Interestingly, he told us his parents were African and Chinese and had met in Jamaica and then settled in Cancun. He was well spoken and clearly well educated, and told us how his family became quite successful as developers, building two of the newer, more exclusive beach resorts. He spoke very frankly about the poverty and lack of a Mexican middle class that he felt was so hurting Mexico’s chances of advancing its standard of living. He said that a wage of $400 a month was considered very good. He decried the lack of income equality and said his country was a country of haves and have nots, with only the rich, and poor to service them.
While the U.S. is obviously more fortunate than Mexico in having great geographic, agricultural and economic advantages, and is not likely to find itself in Mexico’s more extreme economic situation anytime soon, it will, if it continues to allow its middle class to shrink as it’s doing, destine itself to a long-term, and unnecessary lowering of our country’s standard of living—with all of the likely negative societal effects that will result. At the same time, we will weaken the very foundation of our great democracy. Indeed, one of the hallmarks of a vibrant democracy is a strong middle class that is growing – not shrinking.
Recently released Commerce Department data on national income trends showing corporate profits gaining, while the workers’ share lags far behind, continues a trend of mal-income distribution that’s been occurring in this country since the mid-1970s. Amazingly, and embarrassingly, the U.S. has the greatest income and wealth disparities of any advanced industrialized society. While there certainly has been overall income growth over these last few decades, most of that growth has been monopolized by the already wealthy.
In 1970, the lowest quintile had 5.5 percent of the national income; in 1990, that group had 3.7 percent — a 33 percent decline in 20 years – and is continuing today. And yet, during that same period of time the ratio of the compensation of CEO’s to the average worker has gone from 35 to 1, to 150 to 1. Such unjust and wrong-headed economics should not be allowed to continue. While state and local governments can’t control all the market forces at work, they do have an important role, (and obligation I might add), to push back against this injurious and dangerous growth in the income gap. Governments have a fundamental duty to “promote the general Welfare.” They don’t live up to that charge, nor does our democracy stand on firm footing as long as its permits the continued shrinking of the middle class.
Through a variety of taxing, spending and regulatory policy changes the federal and state governments could make a positive difference. There is no question that raising the minimum wage, strengthening unemployment insurance and implementing a wide range of new supports for low-income workers, while reforming the regressive state and federal tax systems (re-establishing the “Inheritance” tax, for one example) would go a long way toward saving our country from a fate visible only one very warm and beautiful Caribbean sea away.
The only question is whether our politicians will ever find the strength of character to fight the wealthy, corporate interests who now rule America? |
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