Sunday, September 15, 2019

United States must unify to address growing income inequality

Noah Gitta ’15
Contributing Writer

Despite America’s reputation as the land of opportunity and a place where anyone who works hard has the ability to achieve both economic and social upward mobility, that image we know and love seems to be slowly vanishing. Almost gone is a country that once prided itself as the place where an individual’s socioeconomic status at birth did not determine their future. The same ideals motivated my parents to leave Uganda to the United States. In early December of last year, President Obama delivered a speech on how the United States of America’s growing income inequality threatens the foundation of equal opportunity from which all Americans benefit. He went on to explain how this is not only a problem for the poor but it affects all of us. Unfortunately, whenever solutions for the widening income disparity between the rich and the poor are brought up, there are some people on the right who see fixing this problem as waging “class warfare.”

The renowned conservative Margaret Thatcher once said to one of her parliamentarian opponents, “He would rather have the poor poorer, provided that the rich were less rich. That is the liberal policy.” Today, the idea of “class warfare” being pushed by the GOP echoes the same message. By equating support for the poor to an unfair burden, the wealthy will have to bear their financial success in order to assist the poor. It’s well known that in a capitalist system, there will always be winners and losers and as a result there will be a natural difference in individuals’ incomes. Our country’s economic success has a lot to do with the growth of the middle class that began as low-income households were eventually able to earn enough money to attain upward mobility.

What a “class warfare” perspective ignores is the fact that since the 1970’s, the top 1-percent of income earners in the US has enjoyed most of the income growth, while the bottom 99-percent income has experienced dismal gains. The data from the Congressional Budget Office in a 2011 report confirms that from 1979 to 2011 the bottom fifth of earners’ incomes grew by 20-percent. But, during the same time span, the incomes of the top 1-percent grew by 275-percent. These numbers cover only one side of the story.

As the middle to low income households were being left out of America’s prosperity during the past three decades, upward social mobility for this income group also stagnated. New data from a Harvard report, titled “Is the United States Still a Land of Opportunity? Recent Trends in Intergenerational Mobility,” disputes that social mobility has remained stable for most children born during 1971-1993. However, the study found that for the working-middle class (second fifth income distribution) the chances to move up the economic ladder had fallen. For the richest country in the world not to have an evenly upward mobile society is a disappointment considering all the resources at our disposal.

Today, the U.S. economy is recovering, but at a sluggish pace. Income inequality does however stand in the way of any substantial economic growth. The middle class and lower income households stimulate the economy through consumer spending and make up a vast majority of our workforce. The reality that college tuition prices have outpaced the income growth in the middle class makes it harder for people to gain access to higher education. As a result, this damages our international competiveness when it comes to innovation. Moreover, if salaries and wages remain stagnint for the bottom 99%, their inability to pay back personal debt will make this country more vulnerable to the financial crisis that we just experienced.

If this doesn’t bother you, the effects of the income gap on our economy and democracy should. A common criticism from the right is that the poor always want help from the government without even participating in basic civic duties, such as voting. Since most of the economic growth has been concentrated at the top of the income distribution, millions of citizens start to believe that the system is geared to favor the rich. The idea that voices will not be heard over the wallets of our country’s wealthy keeps low income and middle-class individuals from believing in the democratic process and ultimately leaving our country’s policies and leaders to be chosen by a small rich minority. In order to fix this inequality, “class warfare” must not be used against policy reforms that are designed to help bridge the income gap between the top 1-percent and the bottom 99-percent. For this country to return to full strength, income inequality has to be recognized as an issue that affects not just one class but the country as a whole.

Leave a reply