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Worldview Watch
periodic commentary and analysis on news items from a worldview perspective

 previous issue                                               issue #34  posted 9 /20 / 2013                                           archive of all  issues

 Inequality in America

in the news:  As reported by Democracy Now September 12, 2013 The American Way of Poverty... "A new study shows that income inequality in America is at a record high. According to an analysis of tax filings, the income gap between the richest 1 percent of Americans and the other 99 percent widened to unprecedented levels in 2012. The top 1 percent of U.S. earners collected more than 19 percent of household income, breaking a record previously set in 1927."  Inspired by the same report, the print version of The Economist dated September 14, 2013 featured a graph of % of US income garnered by the top 10% plotted vs. years 1917--2012. It showed that %  for 1950--1980 as being flat at around 31%, then steadily rising over the next three decades to today's record 48.2% level.  A week later former US Secretary of Labor Robert Reich was promoting his  new documentary film Inequality for All in a September 19, 2013  interview in The Los Angeles Times and an editorial "Inequality: Growing Apart" in the print version of The Economist dated September 21, 2013 suggested possible solutions.

commentary and analysis (by Stephen P. Cook, project Worldview, www.projectworldview.org):  How has a consensus American societal (or at least of those who influence policy and economic decision making) worldview as it relates to income distribution changed in the last few decades?  Here's my quick (and undoubtedly too simplistic!) answer in terms of relevant worldview themes that have become more or less influential during this time period. 

While it's been charged that the capitalist economic system excels at creating not only wealth but wealth inequality, The Economist's recent editorial goes beyond this by suggesting "Inequality can be a symptom of inefficiency". While some (including Reich) point the finger at "excessive executive compensation," The Economist editorial connects this to inefficiency by arguing, "The implicit subsidy provided to banks that governments judge too big to fail allows bankers to overpay themselves." Of course one can connect the trend toward increasing inequality that began with the Reagan years, with Libertarian mantras like "Greed is good" and "the virtue of selfishness". And with growing cynicism that says, "I might as well go after more than my fair share, everyone else is!" 

In speaking of the poor, Abramsky uses the term "downward mobility." He feels that increasingly the poor have been successfully portrayed as "undeserving...dysfunctional...blameworthy" by those who are not fans of the safety net / helping hands social welfare statism can provide. Reich suggests that growing inequality has already created social unrest, connecting both the origins of the Tea Party movement and Occupy movement with disgust over the 2008 bailout of Wall Street. The Economist editorial, after noting "The political worry is a descent into angry populism" suggests that America (including Republicans) "should do more to spread opportunity widely" It ends by stating, "A society without hand-ups won’t have much hope." 

Certainly factors not directly connected to individual worldview themes are also behind the rise in inequality, but separating them out can be challenging. Certainly technology has been behind the drying up of lots of good paying American jobs. Is it primarily to blame? Or financial / investment considerations linked to globalization and availability of cheap foreign labor? Or the rise in the importance of the financial sector to the American economy? Or government policies? While the % of Americans enjoying good incomes from manufacturing jobs has plummeted, so has American union membership (from roughly 30% of workers decades ago to only 10% or so today.) One can argue that this might not have happened if worldviews that valued collective action / worker solidarity (aspects of Populism) over corporate capitalism / management perspective prevailed, but there are other factors involved. 

Those on the left (typically not fans of corporate capitalism) might argue that worldviews that put people before profits might not have let American jobs disappear, but then again poor people in developing countries have found employment that otherwise would not have existed. Those on the right will argue that, in the last two decades, the market / capitalist system has created enormous wealth in once very poor countries like China, something that decades of more pure socialism never did. Critics will point out that inequality in China is even worst than in America!