Complicated Problems


COMPLICATED PROBLEMS….Douglas Holtz-Eakin, John McCain’s primary economic advisor, says that income inequality has gone up everywhere, not just in the U.S., and opines that “The source of that is education.” Matt Yglesias has a bunch to say about that, including this:

While there does seem to be an education-related component to the growth in inequality (specifically, the number of college graduates has not kept up with the growing labor market demand for college educated workers) there are also other factors, including the declining real value of the minimum wage and declining rates of unionization. In both cases, and all others I’m aware of, McCain takes the pro-inequality side.

I just want to quickly endorse the broader point Matt is making here. The growth of income inequality is a complex problem with multiple causes. In fact, virtually every social problem interesting enough to remain unsolved has multiple causes, and that makes them hard to address. The answer to this is not to pretend otherwise (“education” by itself certainly doesn’t explain the astronomical income growth of the top 0.1% compared to the top 1%, for example), nor is it to give up because there are lots and lots of causes and it’s hard to fix them all.

There are multiple kinds of income inequality, and assuming you care about this in the first place (and you should, both for reasons of basic fairness and because an egalitarian economy works better than a vastly unequal one) you have to address them all. You need things like minimum wage laws and the EITC to help the poor keep up. Unionization can help the working class and educational and training policies can help the middle class. Tax policies, at a minimum, should be designed to be at least modestly progressive at the high end. (Our current tax system, which features regressive state, local, and payroll taxes, and which taxes capital gains and dividends at low rates, has produced overall tax rates that are only slightly progressive. Most billionaires don’t pay an awful lot more than grocery checkers.) Things like universal healthcare can ameliorate some of the ill effects of whatever income inequality is left even after you’ve addressed the other stuff.

One way or another, though, any solution has to focus like a laser on increasing median wages to keep up with GDP growth. In the same way that TV revenue has produced an immense ocean of money for top athletes, keeping median wages flat has produced an immense ocean of extra money that sloshes around for the benefit of the tippy top executive class. Treat the middle class more fairly, and income inequality will decrease naturally. That should be Job 1 for Barack Obama’s economic team.

OUR NEW CORRUPTION PROJECT

The more we thought about how MoJo's journalism can have the most impact heading into the 2020 election, the more we realized that so many of today's stories come down to corruption: democracy and the rule of law being undermined by the wealthy and powerful for their own gain.

So we're launching a new Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption. We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We'll publish what we find as a major series in the summer of 2020, including a special issue of our magazine, a dedicated online portal, and video and podcast series so it doesn't get lost in the daily deluge of breaking news.

It's unlike anything we've done before and we've got seed funding to get started, but we're asking readers to help crowdfund this new beat with an additional $500,000 so we can go even bigger. You can read why we're taking this approach and what we want to accomplish in "Corruption Isn't Just Another Scandal. It's the Rot Beneath All of Them," and if you like how it sounds, please help fund it with a tax-deductible donation today.

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate