Tuesday, October 1, 2019

Book Write-Up: Income Inequality (Opposing Viewpoints, 2016)

Noel Merino, ed. Income Inequality: Opposing Viewpoints. Greenhaven, 2016.

This book is about income inequality in the United States. Income inequality contains two facets. First, it means that a tiny percentage of wealthy people possess a vast percentage of the wealth. Second, there is an enormous income gap between the top earners and the middle-income earners.

In the tradition of the Opposing Viewpoint series, this book contains a variety of views on this controversial issue.

Some thoughts and observations:

A. There is debate in this book about whether the measurements of income inequality are reliable. There is a vast income gap between rich and poor, some argue, but that refers only to pre-tax income; after taxes, things are a little more equal. One problem with this argument is that those who believe income inequality is a problem also talk about after-tax income, showing that inequality is great even there. Also, vast income leads to more political influence, which means that wealthy people can shape the tax code to their advantage.

B. Robert Reich, of course, argues that labor unions can help ameliorate income inequality by enabling workers to bargain for a greater share of the economic pie. Ronald Bailey, by contrast, contends that states with the greatest economic freedom—-lower taxes, less government spending, fewer regulations, and right-to-work laws—-have lower rates of income inequality than states with less economic freedom. That may be because the states with less economic freedom, the liberal coastal states, attract companies and wealthy people (i.e., Amazon, tech companies).

C. One argument against income inequality being a problem is that even middle and lower classes have luxuries, such as cell-phones. That, in my opinion, does not mean that the American economic system lacks problems: people having to work multiple jobs just to get by, health care inflation, etc. There are other arguments made against income inequality being a problem: that income mobility is rather high in the U.S., and that income has risen even for lower and middle-income people. Here, I wonder what statistics to believe: theirs, or the statistics about income being stagnant for lower and middle-income people.

D. There was a section about income inequality as it relates to gender and race. Interestingly, almost every contribution about gender income inequality acknowledged that one reason women make less than men is that women have to take time off from work to take care of their children. This is a common right-wing argument. The contributors did not stop there and say “that’s just the way it is,” however, but advocated greater flexibility in work hours and paid family leave. The part on race did not have much of a debate, for both articles argued that income inequality along racial lines is a significant problem.

E. Sheldon Richman has an article, entitled in this book as “Only Political Inequality, Not Market Inequality, Should be Eliminated.” Initially, that struck me as naive, for it is market inequality that arguably contributes to political inequality, as the wealthy have more political influence. It reminds me of when I was watching a Citizens United lawyer on Bill Moyers’s PBS program a while back, and he was arguing that the government should not suppress speech but rather should try to break up the big companies so they are not big anymore. The problem is that, if these rich people are able to give large political donations with impunity, they will easily block attempts to break up their companies. Perhaps, though, we are not without hope. Lower and middle-income people who desire campaign finance reform still have a vote.

F. Some of the contributions struck me as rather idealistic. Robert Reich wants the poor and lower middle-income to be exempt from the payroll tax, while the rich shoulder even more of the tax burden. Meanwhile, there were the calls for paid family leave. Little effort was made to grapple with how these measures might impact businesses, how tax increases might discourage investment, how companies pass on higher taxes to their consumers, or how creating a new entitlement would cost the government vast amounts of money, which would have to be raised somehow.

G. Charles Murray has a thoughtful article, entitled in this book as “Cultural Inequality Is a Problem that Needs to be Addressed.” Charles Murray co-wrote the controversial Bell Curve and is a fellow at the conservative American Enterprise Institute. Murray essentially argues that wealth inequality coincides with cultural separation: the upper-income live in their enclaves with other upper-income people, while the lower and middle-income live in their own areas. That differs from what de Tocqueville observed about the early United States: that the rich mingled with the lower-income. Others in this book made a similar observation to that of Murray: if the rich can provide for their own private schools and health care, they will not be as compassionate towards those whose kids are in public schools or who are crushed by high health care costs, and their votes will reflect that. Murray takes his insight in a bipartisan direction, saying that both the Tea Party and Occupy Wall Street movements reflect the alienation of lower and middle-income people from wealthy elites. Murray also seems to manifest a nostalgia for the 1950’s culture and hopes that can make a comeback: that society will encourage men in their 30s and 40s to work and women to have children after they are married, not apart from marriage. Perhaps society can use a little more of that, but I do not think it should go in the direction of judging people who cannot pull themselves up by their own bootstraps and enter the American middle-class.

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