Nobel Memorial prizewinner Joseph Stiglitz wrote, “The simple story of America is this: the rich are getting richer, the richest of the rich are getting still richer, the poor are becoming poorer and more numerous and the middle class is being hollowed out.”
In The Idea of America I called income inequality a national disgrace, and posed and answered this question: “Why should we care about that today? We should care as a matter of human decency and because a growing inequality — an extremely unequal distribution of wealth — destabilizes a society, and weakens the institutions that support economic growth…People at both ends of the wealth scale lose a sense of connection with one another, a sense that we are united as a nation in a common cause.”
It has been suggested that I (and others who raise issues of inequality) are fostering class warfare, and that we are socialists fighting against the capitalist system.
I, however, believe we are trying to rescue America from an increasingly dangerous division, from a culture so polarized that political functioning becomes impossible and the propensity toward violence becomes hardened. Inequality cascades through our social, educational, health and economic systems with particularly cruel outcomes for children.
Despite books and articles by prize-winning economists, and studies by organizations such as the CIA , some politicians and conservative journals argue that inequality is not a problem. Rather, they say, it is a catchphrase invented by liberals to increase government intervention into the lives of every-day Americans.
Why, after addressing it in the book and writing an article for this blog last summer, do I raise it again? Because of a report issued this week by the Federal Reserve in which Fed Chair Janet Yellen said inequality remains “one of the most disturbing trends facing the nation.”
The Fed report showed that from 2010 to 2013 the pre-tax income of the wealthiest 10% of Americans roses by 10%, while the bottom 40% lost ground during that period. The average wealth of the top 10% increased to over $3 million, while that of the bottom 20% fell to $65,000.
The lack of financial stability in nearly half of our nation’s people damages our economy and destroys the fabric of our communities. Yet rhetoric from the right of the political spectrum continues to shout out distortions and untruths about policy changes such as increasing the minimum wage.
The right’s claim is that increasing the minimum wage will destroy jobs and damage the economy. The left quickly counters that studies such as the one in Oregon highlighted above indicate that a minimum wage increase would not reduce jobs, and the increase in money earned would quickly cycle back into the economy, thus boosting overall economic growth.
Lost in the claims and counter claims is a very important conversation that we as a nation should be engaging around the subject of economic policy. Upholding a particular ideology or interest group should not take precedence over seeking the common good. We can and must do better, engaging both data and empathy in our search for a more just society.