Every middle class worker should get a $6,000 raise | Facebook co-founder Chris Hughes| Big Think

I think the American dream is safe to say, if not dead, it’s on life support. It’s this idea that if you do well, you can get ahead in life and if you have family and kids, they can perhaps do a little bit better than you did. And what we know by the numbers is that the median wages in this country haven’t budged meaningfully in nearly 40 years, and yet the cost of living has increased by some counts by up to 30 percent.

So there’s a sense that people are working hard, but only a small group of people are getting extremely lucky while everybody else is really staying in place. And I think that we have the power to change that. That’s the key idea that I talk a lot about in the book is that we’ve created an economy that is structured this way. We made specific decisions around how to encourage automation, globalization, and the rise of finance that have created a small group of very lucky people, and we have the power to change it to make sure that economic prosperity is much more broadly shared.

So, when it comes to the position we’re in now, I don’t think there was one single moment or one single event that got us here. I think instead it was the collection of a lot of different decisions that begin to be made in the late 1970s and early 1980s, and we’ve continued to make, in fact, all the way up through, for instance, the end of last year. The tax code is one of the most important things. We’ve consistently lowered tax rates on corporations and the one percent while not giving a break to the people who need it the most.

At the same time, we’ve ushered in an era of globalization, which by all accounts has created economic growth but without fundamental worker protections to make sure that people who are in industries that have moved overseas have been protected. And we’ve also made positive decisions, obviously like investing in the Internet, for instance, which was a government investment initially. This has created the opportunity for companies like Facebook and Google and many others to rise precipitously.

But all the fruits of that innovation and of all the positive things that come with that growth have not been evenly distributed. A small group of people are doing extremely well, and at the same time, everybody else is trying to make ends meet. And just as we have the power to create the economy in this current configuration, I do believe we have the power to change it. There has been debate for decades about whether trickle down economics is the way to go.

And we can talk a lot about economic theory, but in some ways I don’t think we really have to; we can just use a little bit of common sense. If you put $100 in the pockets of someone who’s working hard to make ends meet, they’re going to spend a lot of that money, most of that money on things like childcare, housing, and healthcare, wherever their bills are the highest. You give someone who is in the one percent an extra $100, they might spend one or two, but the vast majority of that money is going to get parked in a bank account and not really become part of the productive economy.

One study by the Roosevelt Institute showed that if you provided $500 to every American every month, it would increase gross domestic product by about seven points over the next eight years. So this idea is not just about making sure that the wealthy pay their share, it’s also about creating a kind of broad-based prosperity that’s good for all Americans, the poor, middle class, and wealthy alike.

My belief is that sometimes the best solution is the simplest. We should use cash, cold hard money, to empower people to chase their own dreams and to re-energize the American dream. Specifically, we should provide $500 to every person who works in America making less than $50,000 to enable them to spend it on what they choose: housing, healthcare, education, gas to go interview for a job. It’s these kinds of decisions that I believe fundamentally the people who are working hard are the best empowered to make.

And we can use something called the earned income tax credit, which has been massively popular for decades on the left and on the right, to do this. With a meaningful expansion and modernization of it, we could combat income inequality in a way that would make a historic dent in poverty and stabilize the lives of tens of millions of people in the middle class as well.

I think those people who have done the best from this new economy do have a responsibility. They’ve got a chance to climb the economic ladder; many of them also got lucky. Fortune 500 CEOs are some of the hardest working people out there. They also get very lucky. And there’s a responsibility not to pull the ladder up behind them.

So in my view, we should raise rates on income in excess of $250,000 to the historic average of 50 percent and also close some of the most egregious loopholes in the tax code, like the Buffet Rule, which enables Warren Buffett to pay a lower tax rate than his assistant. And if we do those things, we can pay for a guaranteed income of $500 a month in the here and now today.

I mean, the rough cost—anybody who says that this idea is too big—the rough cost of this over the decade would be just a bit more than the total cost of the Trump tax bill that was passed just a few months ago. So this is eminently affordable if we can develop the political will to organize for it.