How We Should Talk About Inequality
May 06, 2014 | Bloomberg View | Link to article
We're several years now into the debate over rising economic inequality, a debate that has so far focused on its causes, its consequences and what we can do to reverse it. But for all that time and attention, we've mostly avoided what could be the more important question: What if policy makers can't, or won't, change course? Instead of focusing only on fighting inequality, shouldn't we also talk about how to make it hurt less?
There's something to be learned here from that other great contemporary policy challenge: climate change. That debate started with a focus on preventing it from getting worse -- in the climate argot, mitigation. The most recent report from the Intergovernmental Panel on Climate Change makes clear that reducing the impact of global warming's effects -- adaptation -- is an equal part of the task.
It took time for climate activists to accept that idea, for reasons we may see repeated in the inequality debate. Focusing on adaptation feels depressingly close to an admission that your primary goal -- preventing the change you wish to avoid -- can't be achieved. And time, energy and money spent on adaptation are resources that can't be spent on mitigation, and there's only so much to go around.
Those are both compelling arguments. Here's something more compelling: While we've all been talking about climate change, island nations such as Kiribati are being rendered uninhabitable. In other words, the suffering caused by policy failure tends to hit the most vulnerable first, so helping them deal with those problems can't wait. Adaptation doesn't need to come at the expense of mitigation.
When it comes to inequality, that shift doesn't seem to have taken place yet. Take, for example, David Leonhardt's piece in last week's New York Times Magazine, arguing that inequality isn't inevitable. He notes that a wealth tax, advocated by "Capital in the Twenty-First Century" author Thomas Piketty, is unlikely to become law, but better access to education could have a similar effect.
He's right, and those initiatives are worth pursuing. But inequality has worsened not because we can't figure out how to fix it; like climate change, it's fundamentally a failure to align the tax system with the outcomes we say we want. Rather, the status quo persists in both cases because its defenders are better equipped than their opponents.
Maybe the recent attention on inequality will change that balance and produce the kind of policy shift that has yet to occur in reducing greenhouse-gas emissions. But as with climate change, it feels foolhardy to pin our hopes on outright success. In the meantime, it's worth thinking about how to make things less miserable if we fail.
What does adaptation look like when we're talking about inequality? One way to define it is this: anything that doesn't affect the distribution of pre- or post-tax income, but which otherwise makes life better for people toward the lower end of the economy.
In that sense, the Affordable Care Act served to adapt to rising inequality -- not only by making government-subsidized health coverage available to more people, but also by making it harder for insurers to jerk consumers around, as President Barack Obama put it. The same logic applies to the new Consumer Financial Protection Bureau. If the political system can't agree on measures to provide a more equitable distribution of wealth, at least it can make people less vulnerable to financial predation by unscrupulous companies.
How else could the government make life easier without raising incomes? One way is creating new, worker-funded social insurance programs for parental or sick leave. In a perfect world, the costs of those programs would be borne partly by employers or taxpayers. But even if workers are left to shoulder the entire burden, as is the case with programs in California and New Jersey, the most vulnerable are still left better off than before.
That same logic could drive initiatives in any number of policy areas, including greater protections for residents of mobile-home parks, better legal aid programs, easing drug laws that disproportionately ensnare the poor, and preventing employers from changing the schedules of shift workers on short notice.
None of those initiatives carries the same cachet as fighting inequality. And, to be sure, sensible tax reform would do more good for more people than any of those changes. But this isn't an either-or situation. And for all the political and pundit firepower now directed at divergent incomes, it's not clear how much is going to change. Maybe it's time to talk about what happens if those efforts fail.
To contact the writer of this article: Christopher Flavelle at email@example.com.
To contact the editor responsible for this article: Stacey Shick at firstname.lastname@example.org.