The Big Fix to Income Inequality

Income inequality is the defining and dividing issue of our time, as President Obama has reminded us in a series of speeches over the past few months. The huge gap between the richest 1 percent and the rest of us has been the subject of much debate and even “occupy” demonstrations targeting Wall Street greed and government inaction. But little is done, even though we have a prescription to reverse inequality and restore the middle class to our economy.

ImageThe remedy is presented by former Clinton Secretary of Labor and economics guru Robert Reich, who recently took us on a Mini Cooper spin through income inequality and what it means to our society. Reich is the impassioned lecturer-in-chief in “Inequality for All,” a smart and insightful documentary detailing the historic nature of the inequality problem, and how it has come to a head.

“Inequality for All” won a special award for documentary films at last year’s Sundance Film Festival but was ignored by the Academy of Motion Pictures.  The Oscar-nominated documentaries were more dramatic and visual than “Inequality for All,” I grant you, but perhaps none of them as important. Without a major commercial ad campaign, Reich nonetheless is able to push it relentlessly through his social media network – and I’m happily caught up in that loop.

The film is available via Netflix, Amazon and on-demand services. You will have to put up with the recurring lecture format to get to Reich’s keen insights and observations at the heart of the film, but you will be rewarded for your attention with a better understanding of a very serious problem in our nation. Fortunately, Reich uses humor and clever graphics to help tell the story:

The image of the suspension bridge frames the largest income gaps — between 1929, ahead of the Great Depression, and then again in 2007, just before the housing bubble burst and our extended Great Recession. We have reached a period not unlike that of FDR’s New Deal in the 1930s, when we should be changing the rules of the game so that the destructive nature of income inequality doesn’t eat our middle class and collapse the social order.

But the political system is responding slowly, choked by influence peddlers with a vested interest in the status quo. The robber barons of today have a lot more resources at their disposal for influencing both public opinion and political alliances. The Supreme Court ruling in the Citizens United case, allowing unlimited spending on political campaigns, has further stalled political action.

In fact, since the beginning of the recovery from the 2007-09 recession, the top 1 percent has resumed its accelerated income gains while the bottom 99 percent has returned to stagnation and loss, according to the Economic Policy Institute, which has been tracking the trends in unshared prosperity since the 1970s. A state-by-state EPI study released Feb. 19, found that in 33 states the top 1 percent captured between half and all income growth from 2009-2011. This is continuing an alarming trend:

“The lopsided growth in U.S. incomes observed between 1979 and 2007 resulted in a rise in every state in the top 1 percent’s share of income,” EPI reported. “This rise in income inequality represents a sharp reversal of the patterns of income growth that prevailed in the half century following the beginning of the Great Depression; the share of income held by the top 1 percent declined in every state but one between 1928 and 1979.”

You can find out how your state ranks in income disparity with the EPI’s interactive feature linked to its report here: http://www.epi.org/publication/unequal-states/

Still, nearly seven in 10 Americans say the government should act to make sure the rich pay their fair share and more Americans share in economic prosperity, according to a CNN survey a few weeks back. And that view has held remarkably steady: in 1983, 68 percent of Americans favored government action to narrow the divide. Today, that number is 66 percent.

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So, what’s to be done? Part of the solution is to get the big money out of politics. Other laws and reforms are necessary. Here’s Reich’s prescription, which you can find at www.inequalityforall.com:

  • Raise the minimum wage. Many states have raised the minimum on their own, but it’s long past time for the United States to raise the federal minimum wage. We must ensure that fulltime jobs have wages and benefits that allow people to afford the basics.
  • Strengthen workers’ voices. Unless employees enjoy the fundamental right to form and join unions to bargain collectively with their employer, they will continue to be undervalued and disrespected in the workplace.
  • Invest in education, ensuring that everyone has an opportunity to a quality education, from early childhood to college.
  • Reform Wall Street. We must ensure the financial sector is working honestly and accountably to prevent it from taking over our economy.
  • Fix the tax system so that everyone is contributing a fair share. We must reverse the Ronald Reagan tax shift that benefited rich individuals and corporations and dumped on the rest of us.
  • Get big money out of politics. New laws are needed to overturn Citizens United so that corporations can’t spend unlimited amounts of money on campaigns and in return affect public policy and spending priorities.

As Reich notes in his documentary, solving the income inequality problem will require citizen action, making our voices heard over the thunder of the big-money influence peddlers. I like to think we can go back to basics, a la Dr. Seuss and the beloved Lorax:

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