The Inequality Debate

By Harold DeRienzo

Poverty and inequality are back on the national radar screen.  That is a good thing, but what is even better is that this nascent debate is gaining resonance with the general public and seems to have gotten beyond pejorative characterizations of the poor as  “welfare queens,” trading in their food stamps for vodka, as so expediently expressed by Ronald Reagan over three decades ago.  So the time may be ripe for engaging in a substantive debate.

In this blog, my friend and colleague, Brian Sahd criticizes divisive, class warfare politics and the politicians, and others, who promote it.  He cites statistics showing that inequality has actually declined over these past two and one-half decades and concludes that with a focus on personal responsibility, self-sufficiency, and hard work, poverty can be overcome if we just reject division, re-connect with our commonality and find the right balance between freedom and public interest.  Unfortunately, the statistics he cites by Lee Ohanian and Kip Hagopian lump together all categories of people who are or were poor, treating the average worker in the same analysis with seniors who are expanding in numbers, living longer, collecting social security benefits indexed to inflation, and receiving benefits from Medicare, an ever growing segment of the federal budget, even with projected diminished per capita spending.  Besides, concluding that income equality has diminished based upon people being unable to live without increased amounts of public assistance, is like stating that a diabetic has become healthier due to increasing dosages of insulin.  But I believe that conservative arguments are best represented, of late, by an article by New York Times columnist, David Brooks.

In a recent (January 16, 2014) op-ed piece called The Inequality Problem, Mr. Brooks presents what most graciously could be characterized as a palliative for the rich.  His conclusion is that the current debate over inequality is counter-productive.  But the piece is rife with questionable assumptions.

Early on, he states that people are stuck at the bottom of the income ladder because of, among other things, “high dropout rates.”  This suggests that graduation would result in improved economic conditions, a highly suspect assumption in today’s economy.  Another reason for being stuck is the “breakdown in family structures.”  But this begs the question of whether this represents cause or effect.  Have we seen a breakdown in family structure due to some unexplained cultural preferences, or has the dysfunctional economy caused this breakdown.

He criticizes those with a “primitive zero sum mentality.”  This is likely a reference to those who, like the philosopher Rousseau, believed (based upon a mistaken sense that all wealth was based in land) that one man’s gain was another man’s loss.  However, who can fault such an analysis based upon the current exercise of political power.  Over the past forty years gains in productivity have almost exclusively been captured by the owning class, with very little going to labor.  Any talk of regulatory schemes or more progressive taxation is matched with cries of “killing incentives for the job creators.”  If it is not “zero sum” reality, it certainly appears that way in effect, perhaps excusing those with such a “mentality.”

Another assumption he makes is based upon the statement that studies “find no evidence that such raises (in the minimum wage) had any effect on the poverty rates.”  The underlying assumption here is that former increases in the minimum wage were sufficient to raise these workers out of poverty.  He then goes on to say that we are making too much of a big deal over this since only “11 percent of the workers affected by such an increase come from poor households.  Nearly two-thirds of such workers are the second and third earners living in households…”  The assumption here is that it is okay for a household to require two and three incomes in order to maintain itself.  It also suggests that it is acceptable that work leading to independent living should no longer be a social goal supported by public policy.

“The primary problem for the poor is not that they are getting paid too little for the hours they work.  It is that they are not working full time or at all.”  This statement suggests that if minimum wage workers worked full time, they would be capable of sustaining themselves on that hourly wage.

Again, Mr. Brooks suggests that single motherhood and dropout rates are a cause and not an effect of an economy, an economy that is not inclusive and functioning for the benefit of all.  He also mentions the impact of de-industrialization as a problem leading to low social mobility.  He concludes that low income “is the outcome of these interrelated problems, but it is not the problem.”  Poverty is always a problem, and yes, it is an outcome of economic arrangements.  But now we are back to the author’s true bias.  He concludes that in order to understand poverty we must explore the “complex and morally fraught social and cultural roots of the problem.”

So now we know the problem is not the economy, but the cultural and social proclivities, behaviors and habits of the poor.    He shares Dr. Sahd’s ‘upsetness’ with class warfare rhetoric, but ignores how government at so many levels is captured by the corporate sector.  His answer is to focus on “bad schools, no jobs for young men, broken families, neighborhoods without mediating institutions.”  In short, Mr. Brooks is an apologist for current economic, and the resulting political, arrangements our dominant economy promotes.  He only asks that we ignore this and do more of what we have been doing for the past 50 years without challenging the assumptions underlying our current economic arrangements.  Instead, we should blame those without political power and dependent upon an economy that does not work for them and who are increasingly dependent upon a government that manifests growing resentment towards the public support necessary to make up for this economic dysfunction.

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