October 16, 2024                                                         Home   Subscribe  Open in Browser

The 2024 Nobel prize in economics was awarded this week to three economists who have traced how colonialism and its aftermath have shaped today’s global inequities. 

The work of these three scholars, notes the Royal Swedish Academy of Sciences, helps us understand why “societies with a poor rule of law and institutions that exploit the population do not generate growth or change for the better.”

This marks the second straight year that the prestigious Nobel award has gone  to economists studying inequality. And let’s not forget that the 2019 Nobel winner in economics, Esther Duflo, earlier this year called on our world’s richest nations to raise taxes on our globe’s super rich and move the proceeds raised directly to those the climate crisis is hurting the most.

How can the work of economists like these better inform policy making? How can we turn their ideas into action? These have become questions for all of us committed to tackling inequality.

Chris Mills Rodrigo
for the Institute for Policy Studies’ Inequality.org team

A Living Wage for All Workers, No Matter Where They Happen To Work

This week’s frontline face: Red Schomburg, a former Boston bartender and a current leader with the One Fair Wage campaign.

What she's doing to help create a more equal world: Schomburg has experienced firsthand how the current federal subminimum wage for tipped workers — a mere $2.13 an hour — leaves bartenders, waiters, and servers exposed to abuse and factors out of their control.

Both candidates for president have talked about the problems tipped workers face, but their solution — removing taxes on tips — leaves a lot to be desired. Most tipped workers, Schomburg notes, “don’t earn enough to have to pay federal payroll taxes.” The much better solution: A decent minimum wage for all workers.

What makes this fight so important: “It’s great that politicians are talking about tipped workers,” Schomburg notes online at Inequality.org. “We’re a powerful voting block and we’re invested in voting for meaningful change. Tipped workers see beyond the lies and the pandering and know that one fair wage is the change we need to put more dollars in our pockets.”  

How Fair Taxation Can Significantly Strengthen Our Democracy

Slashing taxes on the wealthiest Americans increases inequality and hurts our democracy. Just how? The less the rich and the corporations they run pay in taxes, the more dollars they have to spend influencing elections through campaign contributions and policy decisions through massive lobbying efforts.

This concentration of power allows a small elite to sideline the broader public interest. How can we end that sidelining? Drawing from his recent Senate testimony, Georgetown University’s Indivar Dutta-Gupta shares recent research on how progressive taxes can be a powerful tool for strengthening our democracy and reducing social polarization and conflict. 

This chart vividly illustrates the declining power of workers in an increasingly unequal America. During the decades after World War II, worker productivity and wages rose at approximately the same rate. But since the 1970s, workers have no longer reaped the same rewards from productivity gains. From 1979 to 2024, productivity grew at a rate 2.7 times as fast as worker pay, after adjusting for inflation, according to the Economic Policy Institute. For more on income, gender, and race inequality, click to our Inequality.org Facts section below.

Two Words That So Haunt Hurricane Victims: ‘Claim Denied’

In hurricane-plagued Florida, State Farm last year denied 46.4 percent of homeowner claims, refusals that directly impacted over 76,000 households. To add injury to that insult, Florida governor Ron DeSantis had just before last year signed into law legislation that makes policyholder lawsuits against insurers incredibly difficult.

For recently retired State Farm CEO Michael Tipsord, insurance industry lobbying victories along that Florida line have helped him pocket some stunning personal rewards. Tipsord pulled down $24.4 million two years ago, almost $4 million more than his industry’s second-highest-paid CEO. Inequality.org co-editor Sam Pizzigati has more.

A CEO Who’s Seeking a Really Sweet Fadeaway into the Sunset

This week’s dour deep pocket: David Burritt, the CEO of U.S. Steel since 2017.

What has Burritt sour: the growing pushback against the deal he’s cut with Nippon Steel that would make the Japanese firm the owner of U.S. Steel and leave Burritt with a golden parachute worth a potential $72 million.

Among the critics of the deal: U.S. senators Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio. Burritt’s deal with Nippon, the pair are charging, amounts to “a repulsive conflict of interest” that will enable U.S. Steel execs to “enrich themselves” at the expense of U.S. Steel workers.

Burritt’s counter to the deal’s critics? He’s threatening, a Financial Times analysis points out, “to close three Pittsburgh-area plants that employ more than 3,000 people if the deal is not approved.”

The last word: “This proposed deal isn’t about pursuing the promise of America — it’s about pursuing a quick buck,” Steelworkers president Dave McCall recently noted. “It’s clear that executives at Nippon and U.S. Steel view the union members who actually create U.S. Steel’s wealth as expendable pawns.”

This newsletter and the whole Inequality.org project are powered by donations. We’re not raking in cash from the billionaire class, though. We’re counting on people to see why this reporting, research, and advocacy matters, and then to become paid subscribers, by making a recurring monthly donation of any amount. Make a monthly gift as a paid subscriber. Start your paid subscription today.