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. While income inequality is inevitable and necessary in a free and prosperous society, current levels are extreme. 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.

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. 

What's going on ? Many experts and observers will point to differences in education, skills, and jobs in the marketplace. A systems analyst at a technology firm is going to do better than shipping clerk in warehouse or a retail service worker.  

The economy has changed in extraordinary ways in the last forty years. Manufacturing and mining especially oil, gas, and coal produced millions of high wage jobs. The shift to a service and finally information technology economy produces fewer

and paid less. Furthermore the use of computers, the internet, and now artificial intelligence mean less human labor is needed while work is often temporary and without benefits. 

But none of this is natural or normal. Wealthy owners and investors with support from politicians in both parties shifted factory jobs overseas to countries with lower paid non-union labor and then reimported goods back to the United States. At the same companies built on technology like Amazon still rely on people to process online orders in huge fulfillment centers that don't pay fair or adequate wages. 

In fact wages have not kept pace with inflation over the last fifty years despite increasing worker productivity and ever growing corporate profits. Meanwhile the average CEO makes more than a hundred times what the average hourly worker is paid. We have also greatly reduced taxes on the wealthy, corporations, and made it more difficult to organize labor unions.

Extreme inequality makes it impossible to improve or maintain your living standards no matter how hard you work or try to save. For many people retirement, a health crisis, being single, widowed, or divorced makes them less economically secure.

Secondly, our government and elected officials have become more responsive to the rich and big business at the expensive of working people. This is undemocratic because a minority instead of the majority rules. Think about how the public well-being is harmed. Taxes, regulations, and social spending that benefit everybody are cut to ensure monied interests have more. And it doesn't matter if this isn't what most voters want.

Inequality and the resulting insecurity sharpens conflicts around race, immigration, and LGBTQ Rights. If People aren't fighting over these things then they are isolated, cut off, from neighbors or collective pursuits. People don't join clubs anymore or go to parks. The simple fact is economic anxiety and lack of security breed alienation. 

Individual freedom depends on a certain level of material well-being so Liberals should support political reforms that reduce extreme inequality and ensure a free and prosperous society for all.