Income inequality becoming a national conversation

WASHINGTON – Taking the oath of office for his second term before a crowd of hundreds of thousands of flag-waving supporters, President Obama urged the nation to recommit itself to prosperity and freedom for all its citizens and to protect the social safety net that provides for the poor, the elderly and the needy.

Declaring, “our journey is not complete,” President Obama delivered a purposeful, 18-minute speech that went head on at the issue of rising income inequality and a withering middle class, a theme that was resonant throughout his campaign against Republican Mitt Romney.

“Our country cannot succeed when a shrinking few do very well and a growing many barely make it,” Obama said amid a thunderous round of applause by the crowd of some 800,000.

“We believe that America’s prosperity must rest upon the broad shoulders of a rising middle class,” he added.

The National Mall was a sea of humanity, filled with those who slept out all night or traveled in the predawn darkness to find a place close enough to see the president raise his right hand and place it on the Bible.

Throughout the morning, the sloping hillside that leads to the Capitol filled with waves of people who traveled from every corner of the country and every neighborhood in Washington, DC. They were rich and poor, black and white, gay and straight, young and old. And the tiny American flags they waved created a vast, fluttering patchwork of red, white and blue as the president delivered an urgent appeal for the country to get down to the hard work of repairing the economy, building down the war in Afghanistan, and working harder for the civil rights of all.

In this appeal he also called on the government to create a more level playing field so that everyone, no matter their economic background, will have equal opportunity to succeed.

Sitting proudly in one of the front rows, Barbara Blackmon, 57, said she made the journey from Jackson, Mississippi with other family members. She said she came because she wanted “to be present as the nation’s first African-American president was reelected, to observe the significance of having a president who looks like me taking the oath.”

She was dressed in a warm, black cloth coat with an elegant fur hat and a black-and-white scarf. When I asked her about the issue of income inequality, she said, “There are two Americas and the gap between them is greater and greater. This president knows that. That’s why I voted for him.”

When asked what President Obama could try do about such a complex, layered economic issue, Blackmon had a surprisingly definitive answer.

“There’s a lot he can do about it. It’s called tax reform,” she said.

“He can address it by doing what he said he would do, which is concentrating on the middle class, reducing taxes on them and making sure that the government is taxing the top one percent so they pay their fair share. When Bill Clinton was president the tax burden for that top tier was 39 percent and that is what Obama is proposing. It’s not radical, it’s necessary,” she said.

“He needs to change the estate tax and other tax policies that have for too long benefitted the rich. And, specifically, he needs to increase the earned income tax credit so the working poor can benefit and become part of the middle class,” she said.

I couldn’t take notes fast enough and when she paused for a minute, I said, “Wow. So you have thought about this, I guess.”

“I am a tax attorney,” she said, a wide grin breaking across her face like a sunrise, and her family laughing at her trademark intensity on the issue.

“It’s really about making it possible for people to move up. We are losing that, and if we lose that we will lose the thing that really holds us together,” she said.

Economists call it ‘mobility.’

It is a statistical fact that rising income inequality brings a lowering of economic mobility.

Americans believe in a meritocracy in which anyone, if they work hard enough, can succeed and climb the ladder to a higher economic rung. That is the American dream. But for two decades, it has been precisely that, a dream, and in some ways, top economists say, it has been a delusion.

Mobility is harder to measure than economic inequality, economists say. A thorough analysis requires a ‘longitudinal’ study over several generations. A few recent economic studies from the London School of Economics, an extensive assessment published by The Pew Research Center and a research paper by the Federal Reserve of Boston have tracked long-term trends in income inequality. And these reports shared the conclusion that a rise in income inequality correlates with a drop in mobility.

In fact, the London School of Economics followed eight leading industrialized countries and found that the United States ranks the lowest in terms of mobility. The UK followed close behind the US, Canada and Germany ranked in the middle, and Scandanavia as a whole fared far better.

Ken Jarin of Philadelphia was standing near Blackmon at the inauguration. He received one of the coveted tickets to the front row sections for his campaign contributions and his work on the finance committee of the president’s campaign. He said he, too, is a lawyer.

When asked about income inequality, he said, “It’s a problem for our country and one we need to address.”

But he disagreed with Barbara Blackmon’s ideas for a strategy to confront it, saying that he was not sure that regulating taxes would provide anything more than “a small amount” of help. And, he said, he was worried that the Republican-controlled House of Representatives would “make it very hard to move the ball.”

Conversations like this on what can be done about an issue as sprawling as income inequality were rippling through the inaugural crowd, a kind of national conversation on one sunny afternoon in a field of humanity stretched out before the Capitol building.

Since we launched this GlobaPost Special Report, "The Great Divide," we have received numerous comments and emails on the issue, a sign that the conversation stretches out to our own community of readers. Some have questioned the journalistic approach, and a few people, including my third grade teacher, Mrs. DeChristopher, got in touch to complain that the economists quoted in the series and the reporting in the field carried an implicit belief that everyone’s income should be made equal.

Mrs. DeChristopher said that equal opportunity is what matters, and that comes through education. There are few economists who would disagree, and this reporter was perhaps not the best student, but still smart enough not to question Mrs. DeChristopher on a solid point about education.

And to clarify, the idea that economic ‘equality’ is an ideal state is not the point made by the leading economists GlobalPost interviewed for the Special Report. Indeed, many experts, including Chris Hayes, author of "Twilight of the Elites," believe that the real point is the collapse of mobility, not just rising inequality:

“Americans have more faith in their own mobility than almost any other nation, and less mobility than almost every other OECD nation,” he said. “How long will that dream last in the face of the experience to its contrary?”

Economists are increasingly speaking out about rising inequality, warning that it carries a serious price at home and abroad. Our hope is that by way of our Special Report, readers might see that America has growing economic disparity and a shrinking chance for mobility.

Darren Gable, 18, from the Maryland suburbs and a student at New York University, was on the outer fringes of the crowd, struggling to catch a glimpse of the president. I asked about the problem of income inequality, how serious an issue it was for his generation, and what the president could do to change it.

“I don’t think a problem that big is something that one person can change, even the president. But the reason I like President Obama is at least he has us thinking about it. These are changes that will take a long time, but recognizing that it is a problem is at least the start to figuring it out.”
 

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