Workplace Income Redistribution Idea
Or WIRI, pronounced "weary," like how I feel when thinking about economic inequality
Introduction
The Workplace Income Redistribution Idea has the following goals:
To address historical, ongoing, and increasing economic inequality.
To convince employees that economic inequality is one of society’s (if not The) most pressing issues.
To inspire employees to redistribute money in their personal lives, contingent on financial circumstances.
Reasoning Behind Redistribution*
*Redistribution (as opposed to donation or charity) strives for the focused and intentional effort to move money from wealthier people to poorer people to reduce economic inequality.
Wealth inequality at the current level is merciless, unjust, and increasing, particularly in the U.S. It grew alongside systemic racism, and both continue to exacerbate racial inequality. Wealth inequality affects all aspects of being a person and staying alive, from health to housing to education. While I won’t delve into the statistics and consequences of wealth inequality, the links below begin to.
“The Facts that Define Our Grand Divides” (Inequlity.org)
Bernie Sanders’ Tweet about CEO pay
“Where do my financial choices fall in relation to other people in the US?" Resource Generation (scroll down)
I’ve been thinking about how people with excess wealth—more money than needed to live comfortably (ah, but how to define the elusive “comfortable”?)—should boldly move their excess money towards building a more equitable world. One dawn, on the most excruciating red-eye flight of my life, I came up with the WIRI.
The Idea
In preparation for the new fiscal year, an employer allocates an additional amount, say $1,000, called the Initial Redistribution Amount (IRA, as coincidence will have it) for each qualifying employee earning below a Salary Cutoff, say $100,000. (In practice, the employer can allocate (way) more than $1,000 (or less, I guess 🤷♀️) in IRA, pick a different Salary Cutoff, or forgo a Cutoff.)
Qualifying employees can opt in or opt out of receiving the Redistribution Amount in a process similar to American health insurance (annually, mandatorily, and like your life depends on it (just kidding)). For accounting purposes, the Redistribution Amount can be considered an optional, non-meritocratic bonus. Kind of like the Earned Income Tax Credit but privatized because I’m writing this as a thought experiment and because the current presidential candidates (and American (and international) politics broadly) are stressing me out!
Qualifying employees who benefit or have benefitted from wealth through family, partners, inheritances, jobs, settlements, etc. are encouraged to opt out of the Initial Redistribution Amount. For each employee who opts out, their allocated $1,000 is redistributed among the employees who opt in. In this manner, as long as one person opts out, the Actual Redistribution Amount (ARA) will be higher (if only slightly) than the IRA.
The employer provides training (reading materials, presentations etc.) on economic inequality, redistribution, and guidance on when to opt in or opt out. Ultimately, it’s up to each employee to make this choice confidentially.
That said, the employer can encourage a couple of qualifying employees who plan to opt in and who plan to opt out to speak publicly (perhaps at an ~All Staff Meeting~) about their decision so that employees view both options as valid. This step is probably controversial and tension-inducing, but I think being open and honest about money is important!
Example of the WIRI At Work
Redistribution Inc. has 40 employees, 30 of whom make less than $100,000 and thus qualify for the Initial Redistribution Amount of $1,000. At the beginning of the fiscal year, Redistribution Org needs to allocate $30,000 for the WIRI.
24 qualifying employees opt in to the IRA, and 6 employees opt out. So, the pool of $30,000 is redistributed among 24 employees.
30,000 ÷ 24 = 1,250
The Actual Redistribution Amount is $1,250. The 22 employees who opted in receive an ARA of $1,250. The 8 employees who opted out (as well as the 10 employees who make more than $100,000) receive nothing.
Opt-In or Opt-Out: A Guide
You should consider opting OUT if any of the below applies to you OR your significant other:1
In the past five years, you had a salary higher than the Salary Cutoff ($100,000 in my example) OR in the 90th percentile (highest 10%) for your age and area. Ex: In the U.S. in 2023, the 90th percentile income for a 30-year-old was $113,000.
While raising you, your parent or guardian’s income was in the 90th percentile for their age and area. Ex: In the U.S. in 2013, the 90th percentile income for a 45-year-old was $109,000.
Your net wealth2 (total assets (property, stocks, cash, etc.) minus total debts) is in the 75th percentile (highest 25%) for your age and area. Ex: In the U.S. in 2023, the 75th percentile net wealth for 18-24-year-olds was $33,898 and, for 25-29-year-olds, $130,606. Note: I’m using a lower percentile for net wealth than for income because net wealth is a much stronger indicator of wealth privilege and access.
You anticipate inheriting wealth, land, or other assets that would put you in the 75th percentile of net wealth.
Your family’s net wealth is $1 million or more.
You or your family members have a family foundation.
You should consider opting IN if any of the below applies to you:
You have student loans, credit card debt, medical bills, and/or other debts that are unaffordable to you or that were accumulated due to limited financial resources.
None of the items on the “consider opting OUT” list applied to you.
Unresolved Questions to Think About Because I’ve Spent Enough Time Writing This
Should there be a limit to the Actual Redisitrbution Amount? If, in my example, only one person opts in, is it reasonable for them to receive an ARA of $30,000?
What happens if no one opts in? Should all qualifying employees receive the IRA as a bonus? Should the staff identify outside organizations or individuals to move the money to?
Employees are limited to a binary of opting in if they think they should receive the ARA or opting out if they have benefitted from wealth privilege. Should there be an in-between option for people who fall into a gray zone? Example: For people who are estranged from their high net wealth families or for people who legitimately are “middle class,” should there be a possibility to half-opt in and receive half of the IRA ($500 in my example) and half-opt out so the remaining half is redistributed among those who fully opt in?
(A Few) Potential WIRI Shortcomings
The WIRI could be controversial and induce unproductive division and tension among staff.
Meritocracy is a pervasive value. “You must earn your salary.” Pride and contempt could prevent people from supporting or participating in the WIRI.
Lack of funding, especially at nonprofits.
Working-class wages are already so low and the cost of living is so high that everyone may feel justified to opt in. (This might not be an argument against the WIRI but rather an argument for salary increases across the board!)
Distrust of others to do the “right” thing based on their wealth situation.
On that note, capitalism-induced selfishness, anxiety, and fear.
The WIRI could exacerbate the gender pay gap.
It would not affect or support people who are unemployed, unable to work, and experiencing the highest financial insecurity.
Alternatives (or Additions) to the WIRI
Increased EITC and expanded to undocumented residents
Living wages as minimum wages
Universal Basic Income (UBI)
Much of this section is adapted from Resource Generation’s definition of a young person with access to wealth.
Net wealth as opposed to net worth. Your worth is not connected to how much wealth you have or don’t have.