Should income inequality be the central issue for the American left?

This has become a hot topic, prompted by, among other things, the launch in November of the Washington Center for Equitable Growth, President Obama’s inequality and mobility speech in early December, and Ezra Klein’s recent comments. My current thinking is here.

11 thoughts on “Should income inequality be the central issue for the American left?

  1. Oh , good. No worries then.

    Let’s just study the issue for another decade or so , no need to be hasty , is there ?

    A very reserved , sensible take on the matter.

    Also very mainstream neoliberal , and music to the ears ( eyes? ) of our overlords.

    Well done.

  2. Harold Meyerson in his epic essay The 40-Year Slump, Nov 12, 2013 nears the end with: “Amassing the power to secure those remedies will require an extraordinary, sustained, and heroic political mobilization.”


    He, like every other American progressive never says a word about the most appealing, ultimately easy to implement potential reform of the American labor market: legally mandated, centralized bargaining (all similar jobs in relevant locales under one contract) which would automatically reverse American labor’s economic and political decline.

    This labor market alternative way is in use for decades around the world — beginning on continental Europe, post-WWII (instituted by management). American labor will kill for centralized bargaining if they ever heard about it (every American laborer I explain the setup to says it sounds like a good idea — not because they are scared of me :-]).

    Unlike most eras when the tradeoff to political do-gooding scared off over intelligent type presidents who are super smart about re-arranging the deck chairs –getting the best that can be had from the current consensus — but unable to change the consensus (MLK changed the culture — while JFK did his best to avoid civil rights) — Obama has a unique opportunity to change the culture with only his deck rearranging skills.

    There is a reason the “zombie” party keeps neck and neck if not ahead of the progressive party in election after election. Voters will tell you that the Democrats don’t really do anything to substantially change their lives (health care a rare exception — that most didn’t need). The core of economic life — and most of human life — is about pay and benefits and these forever drop even as the economy grows. Try to restore labor’s preeminence and the Democrats will restore their predominance even if they don’t succeed!

    Supermarket workers (I know, I talk to them) and airline workers would kill for centralized bargaining. But the Harold Meyersons of the world wont even broach the subject, no matter how tentatively … . ??? Even when there is no other labor market setup under the sun which could possibly create a fair and balanced labor market.

  3. Of all the suggestions you make, the most urgent, just, and politically feasible are those which have to do with leveling the playing field for children. That of course means better health care, free preschool, nearly free education through the university level, more housing subsidies, and nutrition support perhaps through school lunches and breakfasts.

    Surely, very few would support the notion that children should suffer the consequences of parents’ poor life decisions, yet we avoid facing this issue every day.

    Young people playing on such a field will obviously do a better job with their own children. While waiting for them to grow up, however, we would do well to level the field for the present generation of parents by improving the criminal justice and rehab system, and adopting a job guarantee program.

    To finance all this, and further level the playing field, begin by increasing progressive inheritance and other wealth taxes, as Thomas Piketty recommends in his new book, soon available in English, as “Capital in the 21st Century”.

  4. Professor Kenworthy: Please show the implied marginal tax rates facing the beneficiaries of your proposed entitlements as those entitlements are phased out at increasing income levels. Unless the marginal tax rates are low enough to make it worthwhile for the beneficiaries to move to the income-earning and taxpaying side of the equation, they will never do so. This is what we often see today with all the entitlements subject to phase-outs (e.g., housing vouchers, Medicaid, SSDI, SNAP). In short, please demonstrate that the math and the incentives implied by this part of your proposal make sense.

  5. Why should anyone care about income inequality? If my boss gets a $10,000 raise and I get a $2,000 raise, our inequality expands. If my pay increases by $1,000 and his goes up by only $500, our inequality is reduced. But why should I prefer the latter scenario to the former? Unless someone can explain that then we must say that income inequality per se is not a problem and cease this endless yammering about such an inconsequential topic.

  6. Solving income (so-called) inequality merely entails extracting as much pay and benefits as the market is willing to bear — an ultra-natural process if you will, whether done via high (relative to today’s) minimum wage or massive reunionization. It’s just the market as the Repubs like to say.

    Rebalancing the American labor market via legally mandated, centralized bargaining (never mind if you think the possibility remote *) will simultaneously rebalance the political forum with equal overall financing as ownership’s and mostly all the votes — which will achieve everything else you wishe for.

    Two natural methods — if you will — to remake American society — no tradeoffs required.

    * I have a cuckoo social instinct theory (if you will :-]): human male rambunctiousness is only contained to work in deep cooperation with the hunting pack via the medium of “Lego Block” social thought formation. My experience in any variety of issues is that males will not entertain any divergence from current practice unless there is overt evidence that school is already in circulation — any other suggestion goes in one ear and disappears; doesn’t even come out the other. I’m into social instinct heavy.

  7. Professor Kenworthy, I enjoy your blog but found myself unconvinced by your effort to minimize the importance of inequality as an issue. You dismiss the Wilkinson thesis that inequality is linked to various social problems, but the evidence for some causal relations here is pretty strong; numerous studies for instance have found links between violent crime and inequality. The other crucial issue here is the link between unequal political power and economic inequality; it’s hard to see how there can not be a self-reinforcing mechanism by which political inequality increases economic inequality which in turn reinforces the power of the economic elites and the corresponding weakness of the working population. This pattern strikes me as a serious threat to the democratic nature of our society. The specific reforms you suggestion (such as alleviated the poverty or inadequate education of children) are of course praiseworthy and deserving of support from progressives. But they seem unlikely to succeed as long as the increasing dynamic of growing economic and political inequality is not arrested. I hope I’m wrong, but I don’t think so.

  8. Hi, thanks, interesting, on Foregin affairs I posted a comment. and here I want to add: I agree with above: Mandatory recognition of unions and national/local collective agreements (and trust between partners) is also important (plus of course equality, welfare..)
    Our book Nordci Lights, at

    For now just: Your RSS link to your blog does not seem to function: This XML file does not appear to have any style information associated with it. The document tree is shown below.

  9. I respect the view income inequality might not be _the_ central issue, but there certainly are a few things about income inequality that should be of concern to the American left, unless it plans to relegate fiscal policy to second-rank order of importance in its vision of what government is.

    But that’s semantics. I have a more serious concern with the point about income inequality not correlating to lower life expectancy. This is a very narrow representation of research in the area of how income inequality affects health. Income inequality does correlate (in cross-sections at least) to ill health and its consequences.

  10. Here’s a perspective to consider. Nineteenth century American wealth was built on a “real world” foundation of manufacturing and trade. Today’s Uber-wealthy exist due to the creation of money. We are at the mercy of an economic oligarchy that creates debt by printing money. They then give that money to megabanks so that the banks can buy bonds that the government prints. The whole reason behind this corrupt process is to enable the government to keep interest rates near zero. Therefore depriving Americans from making a return on their savings and making sure that small businesses can’t get loans that would enable them to expand. Is the Federal Reserve doing what is best for the Middle Class? The lowest wage-earners? The country as a whole?
    I suggest reading The Coming Civil War as well as Money Matters: How International Bankers Gained Control Of America for interesting thoughts on this topic.

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