Human Capital in the Election

There's been recent talk in the election about both presidents' stances on the subject of income equality. For many, our perception of Romney is found in his millions of dollars, and his involvement with Bain Capital, and his ridiculously wealth background. Now, as great as all of this, it makes talking about income a very touchy subject for him. However, he's made one of the most interesting points on the subject, and it starts with one thing: Human Capital.

Romney has made a compelling case for a reform in policy towards social equality- and it starts with looking past economic reform.

Whether you’re a student or in the workplace, we all can understand that some members of any community are valued over others. Whether that’s found in their relationships with others in the classroom or the office, or their contribution to the group, it’s clearly there— especially in business, where there’s often a bureaucratic hierarchy defined by position and payroll. He’s trying to close those gaps as best as he can.

One of his proposed policies is to reform existing government training exercises, instead of assigning strict roles and training people to jobs, the new government would assist businesses in finding ways for the business to become more productive as a group of individuals, encouraging everyone to contribute to the business in a more balanced sense. Training would take place on a more personal level for each business, finding the best fit to keep it as competitive as possible. But what this does, is grants each worker, a greater role in the production of the workforce. 

What this is supposed to do, is balance the social scale of inequality, which is not often incorporated into policy levels, because it’s not tangible like the economy or foreign policy, but a bold effort nonetheless.

How it works out, however, is going to be really interesting to follow, if he’s given that opportunity. Such is the problem with any policy proposal, in theory it may sound incredible, but application is difficult. Changing the culture of the workplace is huge, and I’m not so sure an external force can change that.

Whitehall

Hey, I’m here to talk to you about economic inequality again. If you read the last post, you understand the goal of this project, and if you haven’t, hopefully you’ll go and take a look. So let’s get started.

            I’d like to start small— so a very local instance of economic inequality, just to convince you of how individuals respond to, even the slightest, disparity. And because, we all love social experiments, let me introduce you to the Whitehall Study. The Whitehall Study was conducted in order to uncover the effect that socioeconomic status has on a “society”, in this case, a government body of employment, a perfect test sample, where there’s a clearly outlined hierarchy.   

            The experiment examined about 18,000 male civil servants over a period of 10 years (1967-1977), between the ages 20 and 64, and shockingly found, that between the top and bottom levels of employment, the mortality rate was three times greater for those working at lower levels of income.^{1 2}

There are a couple things to keep in mind:

a) The ages were generally well distributed, it’s not like all of the older workers were at the bottom

b) Workers at “lower levels of income” still earned a comfortable wage— clearly defined as the middle class, so it wasn’t a question of whether their needs were being met

c) External health factors like smoking, preexisting conditions, etc. haven’t been able to explain the correlation between status within the organization and the health of those individuals

What’s suspected is that inequality impacted the health of that organization. That because within the organization, there was a clear dominance and subordination complex that any hierarchy creates. And because, humans are constantly viewing themselves through the eyes of others, knowing that they were subordinate put a considerable amount of stress and pressure on themselves.

            And why is stress so bad? I’m glad you asked. Biologically, it’s explained easy enough. It’s one of the most powerful influences on health, because when you’re stressed your body is prone to default to a “fight or flight mode”; biologically, stress is perceived as preparation for an incoming threat. While our heart rate and awareness goes up, it trades off with functions designed for daily maintenance like the buildup of tissue or immune system. Over a long term, the effects of chronic stress are dire.³

            That’s something to think about— even within a single institution; clearly defined inequality has a tremendous impact on individuals, even to physical health. It’s not just about violence in poorer neighborhoods, miles away from your life (I’ll be sure to talk about that later).

            Something that you may have not picked up on is the lack of influence that the absolute amount of money meant to these individuals. It was all relative, and relative disparity is everywhere. Which begs the question, how has inequality affected you?

Cites!

1. Davey Smith, G., M.J. Shipley & G. Rose. 1990. Magnitude and causes of socioeconomic

differentials in mortality: further evidence from the Whitehall Study. J. Epidemiol.

Comm. Hlth. 44: 265–270.

2. Rose, G. & M. Marmot. 1981. Social class and coronary heart disease. Br. Heart J.

45: 13–19.

3. Wilkinson, Richard B. "Why Is Violence More Common Where Inequality Is Greater?" SAO/NASA ADS: ADS Home Page. Equality Trust Foundation. Web. 22 Mar. 2012. <http://adsabs.harvard.edu/abs/2004NYASA1036....1W>.

Kindness

Kindness. An act that’s difficult to explain by any standard. We often take it for granted, but if you really thought about it, could you really explain why the Salvation Army received $2,827,795,000 in donations and support?

What is it that drives individuals to take money out of their own pockets and place it in the hands of complete strangers?

Some say that kindness is the product of an internal goodness placed in the hearts of every man, woman and child that transcends the biological inclination to compete. Others say people ultimately only do things because it benefits themselves, whether it’s the warm feeling they receive from being charitable or the belief that giving will ultimately come back to bless them.

As a seventeen year old, unexposed to the harsh realities of this big bad world, I can only hope that the former is true, that true kindness isn’t driven by anything but the goodness of one’s heart. However, I also recognize that many don’t— and I’m here to give you a reason to want to help those hurting in the midst of vast economic and social inequality.

Our country is plagued with the belief that money solves problems. But the truth is, especially in a social and cultural context, that it’s not so important how much money a nation has, but how it’s distributed.

            America has the greatest wealth inequality in the world, a problem we don’t often recognize. Instead we’re told that the reason that this or that neighborhood has such high mortality rates, poor education systems, and stunted economic growth is because they don’t have enough money, never thinking that it’s because some people have too much.

            Interestingly enough, that inequality places the “health” of our society (broadly defined by crime rates, mortality rates, education, etc.) at huge risk that has major implications for all of us. Now the question that remains is how inequality directly affects the health of a society, and what can be done to bridge that gap.