Is Inequality A Choice?

Yes, according to New York Times columnist Nicholas Kristof, who writes, “… while we broadly lament inequality, we treat it as some natural disaster imposed upon us. That’s absurd. The roots of inequality are complex and, to some extent, reflect global forces, but they also reflect our policy choices.” Kristof cites a recent report that 2014 Wall Street bonuses were about twice “the total annual earnings of all Americans working full time at the federal minimum wage” (see 3/23/2015 Communities Count blog).

For suggestions of ways to counter inequality, he turns to a new book, Inequality: What Can Be Done, by British economist Anthony Atkinson. Among Atkinson’s 15 steps to reduce inequality:
■ Government should be more concerned with monopolies and competition policy.
■ Trade unions should be bolstered to represent workers’ interests.
■ Government should provide public-sector jobs at minimum wage to those who want them, in areas such as meals-on-wheels, elderly care, child care and so on.•
■ In addition to a minimum wage, there should be a framework to restrain pay at the highest levels. Atkinson cites companies that have voluntarily decreed that executive pay should be capped at 65 or 75 times the average pay in the firm.
■ Personal income taxes should be made more progressive, with a maximum rate of 65 percent.
■ Every child should get a “child benefit” payment, to help keep kids out of poverty.

Finally, Kristof poses the following question about how Congress responds to inequality (more than one choice could be correct):

Congressional leadership is showing resolve to slash —
A) subsidies for private jets;
B) the carried interest tax loophole for billionaires;
C) food stamps;
D) the estate tax on couples with estates worth more than $10.9 million.

The answers: C and D — policies that “would hurt low-income children while offering a helping hand to billionaires.” Kristof asserts that “the problem isn’t inequality; the problem is us. We’re paralyzed.”

For examples of inequality in King County, see Communities Count data on health insurance, perceived safety, homicide by neighborhood poverty and race/ethnicity, and poverty trends.