Monday, February 18, 2013

Income Inequality

This rings true to me, and not just because Joe Stiglitz and I were college-mates. In the article he lays out the ways in which our nearly-unprecedented (except for right before the Great Depression) income equality is holding back economic recovery and wiping away what's left, for most people, of The American Dream: hard work allowing anyone to "make it."

Politicians typically talk about rising inequality and the sluggish recovery as separate phenomena, when they are in fact intertwined. Inequality stifles, restrains and holds back our growth. When even the free-market-oriented magazine The Economist argues — as it did in a special feature in October — that the magnitude and nature of the country’s inequality represent a serious threat to America, we should know that something has gone horribly wrong... .
... There are four major reasons inequality is squelching our recovery. The most immediate is that our middle class is too weak to support the consumer spending that has historically driven our economic growth. While the top 1 percent of income earners took home 93 percent of the growth in incomes in 2010, the households in the middle — who are most likely to spend their incomes rather than save them and who are, in a sense, the true job creators — have lower household incomes, adjusted for inflation, than they did in 1996...
Bringing it up, of course, begs responses of Marxism, socialism, communism, hatred of America. But, as ought to be obvious, it's exactly the opposite. To want to address it is to want to see America survive, and, yes, as a capitalist nation.

[Image source]

1 comment:

Anonymous said...

Dr S: When I read "Income inequality" I think of the persistent salary-gender gap. Example; if you are a "mid-level-provider" like me, you earn more if you are a man based on a recent salary survey that looked at national salaries for PA's and NP's. It was not a rigorous study, just a survey, but I was disheartened that all these decades later, this problem still exists despite the Equal Pay Act.
Before we can fix all the other "gaps", we need to close the most profound gap..the gender gap.

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