Tuesday, October 16, 2012

Reducing Income Inequality To Help "100%"

Posted by Caitlin Endyke

It's been almost exactly one year and one month since the start of the Occupy Wall Street movement and the moment when the term "income inequality" entered the national lexicon.  The time between then and now allowed academics across the country to begin to study how the extreme conditions of income inequality in this country affect us now and in the future. In the past week The New York Times has published two articles related to this idea.  

The first (and, for this history major, most enlightening) article details some historical examples of other societies who have enacted policies that promote socioeconomic inequality.  The author asserts that the United States has instituted it's own example of medieval Venice's "Libro d'Oro", or "book of gold", which officially instituted a way of ensuring that only those born into the ruling class would continue to hold that power.  Beyond the ubiquitous tax code, the article notes other socially-implemented policies in this country that affect a person's ability to move up the socioeconomic ladder.  Things like legacy admissions at top universities, poor public school performance, and moves to de-unionize certain labor sectors have all contributed to the fact that those in the lower, working, and middle class find it harder and harder to move up.  While the United States once demonstrated one of the highest rates of economic mobility, now several studies are reporting that it is harder in the US to move from the social class of your birth than it is in most European countries.  It appears that those who have gained success seek to prevent anyone else from following in their footsteps.  As the article notes, "Elites that have prospered from inclusive systems can be tempted to pull up the ladder they climbed to the top". 

But, as the other article points out, this era of income inequality is unsustainable.   This piece discusses the results of a recent economic study by the IMF that shows that reducing income inequality and promoting economic growth might be "two sides of the same coin".  Conversely, if the US doesn't enact any specific policies to reduce the rate of income inequality, economic growth for the nation as a whole will come to a standstill.  This will obviously mostly effect those of us not in that 1%- as we continue to struggle to find work and pay the bills.  But, while the economic elites will continue to hold the majority of the wealth, they will also languish in a failing economy and so will their business interests. Perhaps we will be more successful if we re-frame the argument. Because, apparently, reducing income equality won't just help the 99%, it will help us all.

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