Income Inequality Deserves our Attention: Shrinking the Gap Benefits Society 2/26/12 published in the Concord Monitor
Probably the most significant accomplishment of the Occupy Wall Street movement has been elevation of the issue of economic inequality in America. Economic inequality has not been on mainstream politicians’ agenda. It has been the equivalent of background furniture.
In the middle of a presidential primary season, no candidate on the Republican side has gotten close to touching this issue. It has been like kryptonite to Superman. On the Democratic side, President Obama talks about jobs, but you don’t hear too much about the 1 percent and the 99 percent.
The truth is that the image of the 1 percent and the 99 percent captures an unfortunate sociological reality. Over the past 30 years, America has gotten way more unequal. The rich have gotten fabulously richer, and the poor have gotten desperately poorer – but with a wrinkle. Many formerly middle-income people have fallen into the ranks of the poor, a category that has considerably expanded. Compared to the 1960s and 1970s, we have moved backward toward a more unequal society.
Considering these obvious changes, it is surprising that equality as a value has not received more discussion in the media and blogosphere. We mostly pay lip service to the value. To the extent we even discuss equality, talk is more about equal rights than economic equality. In New Hampshire, liberty gets far more play than equality as a defining value.
I would argue that we need to take equality far more seriously than we have.
The reason is simple: People in more equal societies live longer, healthier and happier lives. Equality benefits more than the poor – it benefits everyone. This is neither recognized nor appreciated.
Many would dispute this perspective, but there is a mountain of empirical evidence to back it up. In their book, The Spirit Level: Why Greater Equality Makes Societies Stronger, authors Richard Wilkinson and Kate Pickett make the case for the virtues of more equality. They show that in rich societies poor health and multiple social problems including violence, life expectancy and infant mortality, children’s educational performance, imprisonment rates and mental health all correlate to inequality. The less equal the society, the worse the outcomes.
Wilkinson’s and Pickett’s views are based on years of research studying over 20 rich countries including the United States, Canada, the United Kingdom, European countries, Japan, and the Scandinavian countries. They also look comparatively at all the states in the Unites States. The book does not focus on particular public policies as routes to achieve greater equality. They accept that there can be different routes to that goal.
Interestingly, Wilkinson and Pickett single out both New Hampshire and Vermont for some positive comment. Both are among the most equal states in the United States. This is true even though Vermont has the highest tax burden of any state and New Hampshire has the second lowest, next to Alaska.
Since 1997, the average annual income of the 400 richest Americans has more than tripled, to $345 million. At the same time, their share of the tax burden has declined by 40 percent. Billionaires pay a smaller percentage of taxes than workers who earn $25,000 a year. On the other end of the equation, we have increased human misery reflected in foreclosures, homelessness, and long-term unemployment. Poverty drenches millions in toxic stress, depression, and insecurity.
This extreme economic inequality carries political consequences. With the change in campaign finance law wrought especially by the Citizens United decision, we face the prospect that billionaires will bankroll their candidate of choice and buy elections. The United States could devolve into oligarch rule, like Russia, with billionaires’ money skewing election results especially through negative ad buys. The odds, based on past experience, that the 1 percent will look after the interests of the 99 percent could hardly be described as good.
With this context, I am at a loss to understand the relative emphasis on the value of liberty over the value of equality. I accept the merit of both values, but liberty as now defined is the value of the billionaire buying elections. It is the value of the payday lender loaning at 500 percent annual interest. It is the mortgage bubble scam. It is the billionaire sheltering his money in the Cayman Islands.
I can hear the arguments on the other side. “Inequality is not an injustice – it is a necessary component of a prosperous society.” I don’t buy it. It is an injustice, harmful to the overwhelming majority.
Lessening our extreme economic inequality should frame our political agenda. Politicians should be addressing the needs of all the people – not just the 1 percent. We seem to be stuck in old ways of looking at things. Before Occupy Wall Street, there did not seem to be political will to create greater equality. Now it is less clear. Maybe there is some resolve.
Greater equality will lead to a safer and friendlier society. Activists in Britain are looking at pay ratios between top executive and median worker compensation. They have floated a maximum wage set as a multiple of worker pay. This is a different way to look broadly at the unfairness of CEO pay relative to the average worker. American workers’ pay has stagnated for a long time, while top executive pay has been a runaway train. According to the AFL-CIO, our CEO-to-worker pay ratio is 343:1. Japan is 11:1. The U.K. is 22:1. We are in a class by ourselves.
We need to get beyond automatic dismissal of any new idea as “socialism” or “tax and spend.” The government, especially the federal government, does not deserve the demonization it has received in recent years. It is the government that has shored up capitalism during its boom-and-bust cycle. Over the past 80 years, it is the federal government, whatever its faults, that has vastly contributed to the quality of our collective lives. Think Social Security, unemployment insurance, Medicare, Medicaid, the Department of Veterans Affairs, civil rights, Head Start, and Legal Services, to name a few. These programs have made the Unites States a more civilized, humane society. We would be so much worse off without them.
There is no blueprint for making the changes I am suggesting. Nor am I opposed to cutting spending where it is wasteful. Still, the deeper issue of inequality persists. I think equality and fairness are values every bit as important as liberty. There is nothing more American than acting on these values.