Economic Inequality Matters

No matter which party controls Congress or the Presidency or how well the economy is doing by other measures economic inequality is a problem. Of course, if you're doing very well then inequality doesn't matter to you. Even for a lot of ordinary Americans struggling to make ends meet the issue might not resonate. While inequality is inevitable and desirable in a free and prosperous society. Our economy is too unequal. The amount of wealth and income in the hands of a few people makes it increasingly difficult for everybody else to live decent or have any security.

Consider the gaps between the well off and everybody else. The group Open Markets notes: 

America is more unequal than it has been in a century. The richest 0.1 percent of American families own as much wealth as the lower 90 percent of all American families combined. Between 1979 and 2007, the richest one percent took in 53.9 percent of all income growth. And wealth inequality grew even more dramatic in the wake of the great recession. The richest 7percent expanded their average neat worth by more than 25 percent between 2009 and 2011, and whites claimed an even larger proportion of American wealth relative to Blacks and Hispanics.  

The Economic Policy Institute breaks this down as follows:

$1,316,985

Average annual income of the top 1%What you need to make to be in the top 1%:$421,926

$50,107

Average income of everyone else (the bottom 99%)

26.3x

The top 1% make 26.3 times more than the bottom 99%

The top 1% take home 21% of all the income in the United States.

Some might say all this reflects differences in skill, talent, initiative, and risk. Why punish rich people for being successful?  We need investors, job creators, and entrepreneurs, they create prosperity that benefits everyone. This argument is partly true. But if we're not paying people fair and adequately based on their productivity. Something is wrong. The fact is wages have not kept pace with inflation while top management, wealthy investors, and owners have paid themselves more and more. Why are ordinary people so upset about high prices at the grocery store or gas pump? They're working harder for less money. Credit card debt in American households is in the trillions of dollars because few of us can take care of all our needs with a weekly or biweekly paycheck. We have also smashed unions which fight to ensure good pay for workers. 

Lastly, discrimination based on race and sex contribute to the problem.

At the same time the middle class has declined and it's almost impossible for the working poor to survive especially when it comes to affordable housing. A survey by Pew Research found that The share of American adults who live in middle-income households has decreased from 61% in 1971 to 51% in 2019. This downsizing has proceeded slowly but surely since 1971, with each decade thereafter typically ending with a smaller share of adults living in middle-income households than at the beginning of the decade.  

Meanwhile work no longer pays for shelter at least not the poorest among us to. The Center on Budget and Policy Priorities pointed out in 2022 that 9.4 million households spent more than half their income on rent or lived in substandard housing to avoid doing so.

The negative effects of economic inequality on people are significant.

Stress, anxiety, poor diet, and hunger drive down rates of life expectancy. Even people with health insurance delay or forgo care if they can't afford the Co Pays or the 20 % share after insurance pays 80%. This leads to poor health outcomes too. Low income people are mired in poverty no matter how hard they work or strive to better themselves. And for many seniors retirement means less comfort and financial security. 

If we value individual freedom as much as we claim then it can't be separated from material well-being. People who can't aquire any property like a home or build a savings for some wealth aren't truly free. Individuals constantly struggling to make ends meet or just survive aren't concerned with free speech, thought, or expression. Privacy is meaningless if you live in inadequate housing or you are homeless. Think about all the choices individuals are deprived of due to economic inequality education, recreation, personal relationships, goods, and services in the marketplace. They cannot achieve or focus on their own goals.

It's also important to recognize the danger gross economic inequality poses to democratic self government because rich people use their money to influence politicians at the expense of ordinary voters with far less power. Liberalism most oppose such an imbalance. 

Economic inequality must be addressed with the same focus and urgency as supposed threats to democracy if we are going to ensure a free and prosperous society for all.