In 2011, Jacob Hacker wrote a ground-breaking paper in which he coined the phrase predistribution. Under Hacker's definition, predistribution refers to measures governments take to reduce or eliminate inequality in market incomes. This differs from redistribution, which Hacker uses to mean measures states take to reduce or eliminate inequality after market incomes have been distributed, for instance through taxes and government benefit programs.
It's no secret that wealthy people have a lot more clout when it comes to politics and civic life. They are more likely to vote, contact their representatives, belong to advocacy organizations, and—of course—contribute to politicians, parties, and PACs. Compared to ordinary folks, many of the wealthy are "super citizens."
More controversial, though, is whether these disparaties pervert our democracy—or whether it's no big deal to have super citizens wielding what Demos has called "million dollar megaphones."
This past January was the deadliest month in Chicago in more than a decade. Forty-two people lost their lives on the city’s streets, most of them to gun violence. For 2012, the total number of homicides was 509, of which 443 involved firearms. While most of the shootings could be attributed to gang feuds, innocent people were caught in crossfire that often erupted in broad daylight and on public streets.
The release of 2012 minimum-wage data last Wednesday—which shows that the number of minimum wage workers has fallen but is still higher than any period since 1998—has underscored the importance of making good on Obama’s pledge of raising the federal minimum wage from $7.25 to $9 an hour. As many have pointed out, women stand to benefit disproportionately from the increase: Two-thirds of the country’s roughly 1.6 million minimum-wage workers are women.
Cristina Romer, Berkeley economics professor and the former head of President Obama’s Council of Economic Advisers, passed judgment on the merits of raising the minimum wage in Saturday’s New York Times, and in the process made clear why she wasn’t a member of the president’s de facto council of political advisers. She argued, as some mainstream economists do, that the merits of a heightened minimum wage were slight—that it may, for instance, raise prices, offsetting the gain to low-wage workers.
New data from the Census Bureau shows that the tepid recovery is exacerbating income inequality and pushing ordinary Americans into tougher economic circumstances. Here is the Los Angeles Times with more detail:
The median household income, after adjusting for inflation, dropped 1.5% in 2011 from the previous year to $50,054. That is now 8.1% lower than in 2007, when the recession began late that year. […]
Last week, during the Democratic National Convention, in a rare display of party message discipline, viewers heard Bill Clinton, Elizabeth Warren, and a raft of other speakers talk about the best way to “grow” the economy—“from the middle-class out and from the bottom up.” They were careful, though, to avoid certain phrases to describe that bottom—including “lower class” and “lower middle class”—and for good reason. Most people don’t like to identify themselves as low-income, even when they are.
We've heard a lot about jobs in this presidential election cycle. The idea being, I suppose, that once people have a job, regardless of the wages or the hours, they can bootstrap their way to the top. Probably for similar reasons, we don't hear much about poverty. So long as there are jobs around, political rhetoric seems to say, being poor is a choice. While both campaigns will spend many many millions on ads telling you about jobs, I doubt we'll hear much about economic mobility in America or pathways to escaping poverty.
In the latest version of SimCity, a computer game that let's you pretend to be an urban planner, city residents are born into an economic class and there they remain for life. This may have been done for simplicity's sake, but the scenario makes the popular computer game disturbingly similar to the situation of most Americans.
Greg Sargent is rightfully stunned by the entitled petulance of Wall Street bankers who are shocked—shocked—that President Obama would do anything other than praise their indispensable brilliance:
Wall Streeters are so upset about Obama’s harsh populist rhetoric that they privately called on him to make amends with a big speech — like his oration on race — designed to heal the wounds of class warfare in this country. […]
Alfred Stepan and Juan Linz in a review essay (gated) in the most recent issue of Perspectives on Politics.
Certainly there were many important welfare improvements in the United States from the 1930s to the late 1960s, linked to Franklin Roosevelt’s New Deal, the Civil Rights movements, and Lyndon Johnson’s Great Society. In fact, by 1968, equality had improved greatly, with the Gini index of inequality falling to .388, the best Gini ever recorded in the United States. Even so, looked at comparatively, at its best where did the United States rank? Unfortunately, we do not have systematic comparative data for many countries in this period. But we do have some telling data. Two leading scholars of inequality have comparable data for the United States and at least seven other long-standing democracies in advanced economies for the period 1975–77. During this two-year period, four of the seven countries (France, the UK, Sweden, and Finland) had Gini indices that fell between .200 to .250; two of the seven (Germany and the Netherlands) were between .270 to .300; and only one (Canada) was over .300 at. 360. Thus, during the heyday of income equality in the United States, no other country in the set was as unequal as America, and most were substantially more equal. Since the early 1970s, moreover, inequality in the United States has only gotten worse. From an all-time best measure on the Gini index of .388 in 1968, by 2009 the US Census Bureau had put the US, Gini at .469, America’s worst Gini index in many decades.
Over at his blog, Mike Sances investigates the claim that the Occupy Wall Street protests have made concerns about economic inequality an important item on the political agenda. A recent Washington Post poll found that about 60% of respondents believed there was a widening gap between the wealthy and the less well-off and that the government “should pursue policies that try to reduce the gap.” Sances notes that this 60% figure is a historical high. Drawing on data from the General Social Survey since the late 1970s, he writes:
Note that the “reduce income differences” category has always had a plurality, though never a majority. Could differences in the way the question is worded account for the apparent 20% jump between the GSS in 2010 and the Washington Post result in 2011?
As has been shown time and time again, African American families have been the biggest losers in the current economy. Black unemployment, for example, has been in the 16 percent range for more than two years, with dim prospects for improvement. The poor economic position of African Americans is most evidence with regards to overall wealth – as this new chart from the Economic Policy Institute shows, black wealth has seen a precipitous decline since 2007, to a 20-year low.