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Time for Solutions to Inequality

Once again we learn it’s easier to identify problems than it is to solve them, and that seems especially true with respect to income and wealth inequality.

Blogging Our Great Divide
December 02, 2015

by Larry Checco

“There are no solutions [to inequality] without policy changes,” including tax reform, said Darren Walker, president of the Ford Foundation at a recent Aspen Institute summit on inequality and opportunity.

But therein lies the rub. Policy changes require a Congress that can come to consensus on how to resolve major social issues, and until we get that Congress it looks like the chasm of inequality will continue to widen and deepen.

The Aspen Institute summit brought together representatives from major nonprofits, corporations, foundations and government who developed a long list on how and why income and wealth disparities have become such a commanding issue.

Speakers pointed to tax policies that redistribute wealth up, not down; globalization that moved once good-paying American jobs overseas; the radical change in employer-employee relationships, with more people working part time and subcontracting to employers without receiving benefits; disruptive business models like Uber and Airbnb that are transforming major industries.

Then there is the devastating impact technology—in the form of robots, advanced algorithms and artificial intelligence—is exerting on the workforce.

Fact is capital doesn’t require labor the way it used to, which has reduced the power of unions and thereby the wages of workers, resulting in ever greater income inequality.

“Thirty percent of Americans earn less than $10 per hour,” said David Rolf, International VP of the Service Employees International Union, adding that the average American family needs to work three jobs to earn what it did in 1977.

The aggregate impact of all of this is the hollowing out of the middle class and the expansion of a class of people who will require more government assistance—at a time when government is pulling back on social services.

Speakers talked about rewriting work rules and the social contract between employers and employees, reengaging young people, as well as the need for for-profits, nonprofits and local governments to work together rather than compete with one another.

Cecelia Munoz, President Obama’s Domestic Policy Council director said the focus should to be on creating opportunity through an integrated approach to childhood and adult education, housing, health care and transportation.

But these are precisely the sectors of our society that we are disinvesting in, to the betterment of no one. According to one speaker, we spend three times more on incarcerating people in this country than we do on high schools.

To get the policy changes required to jump start our middle class we need strong, visionary leaders who are more interested in the future of our nation than they are in the future of their own political careers.

We need leaders who understand that politics is the art of compromise, not ideology, and who don’t absolve themselves from governing by signing pledges that they will never, under any circumstances, raise taxes.

We need leaders who are inclusive, not divisive, and who truly understand that we need to re-infuse our country with a sense of purpose and community that has been forsaken for decades, replaced by a dog-eat-dog attitude of I got mine, you get yours.

Arthur Brooks, president of the American Enterprise Institute, a right-leaning Washington think tank made an interesting observation when he said to summit attendees that somewhere during the War on Poverty we turned “poor people from assets to be developed into liabilities to be managed.”

That’s a sad commentary on our society. But if we don’t resolve this inequality thing and provide more opportunity to more people, it’s an observation that will grow in truth—and numbers—with time.

In his closing remarks to the summit, Vice President Joe Biden said, “A stable middle class results in a stable social order.”

Quite frankly, we appear to be losing that stability and sense of security we once had for our and our children’s futures.

There’s much at stake here, and during this current election cycle it’s worth remembering that we get the government we deserve.

Larry Checco is the president of Checco Communications and a columnist for Accountability Central, where he writes on economics, politics, and income inequality. He holds a degree in Economics from Syracuse University and an MA in Journalism and Public Affairs from American University.

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