The question cannot be how we aim to make outcomes equal, but more precisely, what forces prevent socioeconomic mobility and perpetuate poverty?
The question surrounding rising income inequality frequently incites the dichotomous perception of political discourse that we so frequently associate with American politics. Those who self-identify as Liberals can be expected to declare that rising income inequality is deeply problematic and morally corrupt. Conservatives, on the other hand, can be expected to assert that income inequality is inconsequential, but rather, poverty alleviation should be the primary focus of discussion.
Perhaps the greatest obstacle standing between our discourse and a solution is the prevailing inability to frame the question in a way that is satisfactory to all parties. There are a few reasons why we cannot pragmatically assess the challenges we ought to face.
Income inequality is a touchy subject: in some cases the very question can evoke counterproductive sentiment on the basis of personal connections to perceived injustice, and at times, it can provide the impetus for signaling and posturing, just as well as it can pave the way for provocateurs to make absurd unfounded assertions. Things can quickly become divisive and discussion can devolve to character attacks on the perceived degree to which contributors “value the lives of their common man.” These pitfalls are not unique to one side. However, few reasonable people would argue that income inequality or poverty, in at least some respect, is not problematic.
I would argue that the question, ‘should income inequality be addressed?’ is fundamentally misguided. This is not because we should abandon the notion that income inequality can be harmful, because it may well be the case. However, it remains a leading question. If one believes that income inequality should be addressed, the resulting logic can only be; outcomes are unequal and thus we must alter outcomes. The only way that this can be done is through redistributive schemes, the validity of which is ideological, and will differ from person to person.
While such a proposition no doubt represents ideals that appeal to our inherent sense of right and wrong, in practice, they do not function to alleviate the problems we associate with income inequality. There are countless historical examples of Socialist regimes who have attempted to actualize the ideal of equitable outcomes through state-owned enterprise and redistribution of wealth.
Each and every iteration has resulted in a net-negative for all involved, with the sole exception perhaps, of the political leaders who manipulated said system to their own ends. To assert that the United States would be different defies principles of logic – it is a straw-man. The problems with such a system are numerous: disincentivization of innovation, growth of inter-class animosity, and in the context of the United States, defies the principle that we ought to reward those who bring value to the rest of society.
One could argue endlessly regarding the appropriate ‘cap’ on wealth. Yet the billionaires – Bezos, Gates, Zuckerberg, et alia – are not individuals who have benefitted from inter-generational wealth. Rather, they have each instigated discontinuous change in the way that billions of people live their everyday lives. Income inequality is not the problem, but instead, it is a symptom of the underlying forces which cause it to occur.
We collectively live in the best time period in all of recorded human history. We begrudge others for their success, yet forget that the mobility which permitted their rise did not exist two centuries ago. In such a time, so full of opportunity that we may or may not be able to see, it would be fundamentally unfair to pull some backwards for the sake of pulling others forward. This does not mean that we shouldn’t continually strive for improvement, but rather, that we must do so by encouraging and enabling the pursuit of each individual’s success in their own right.
The question cannot be how we aim to make outcomes equal, but more precisely, what forces prevent socioeconomic mobility and perpetuate poverty? How do we empower the individual to seize responsibility for his or her own outcome, while providing the tools needed to pursue the best within them? The answers are not glamorous, nor are they particularly profound, but they are essential. Turning to literature, we quickly identify aspects of the conversation that we scarcely discuss.
Consider the role of family structure. To most of us, such a factor would not intuitively be a significant input for mobility or amelioration of outcomes. Yet we would all be wrong. According to a report from the American Enterprise Institute (AEI), marital status as well as growing up with both parents are key inputs when considering the changing economic tides in the United States.
The report finds that “the growth in median income of families with children would be 44 percent higher if the US enjoyed 1980 levels of married parenthood.” It goes on to add that 37 percent of declines in male employment rates are linked to declines in Americans forming stable and married families. While women were found to suffer no marriage penalty in individual incomes, men achieve a sizable marriage premium of $15,900 per year in individual premiums relative to single men.
Growing up with both parents is another significant factor, which is highly linked with higher education, as well as better jobs and higher incomes. All of these trends and factors are mutually reinforcing, demonstrating the critical necessity of strong family structure. Those who grow up in a two-parent household are tremendously more likely to achieve more highly in education, lending itself to higher likelihood of marriage, both of which, in turn, increases income. Such a study is fascinating, regardless of political affiliation, because it begins to isolate the factors that prohibit, or at least strain mobility, while providing a basis for fundamentally altering one’s own life-trajectory.
Richard Reeves of the Brookings Institute observed that eighty percent of children in the bottom quintile who were born to married parents were able to escape the bottom quintile in adulthood. The proportion of children born to “never-married” parents had only a fifty percent chance of success. With changing cultures and social norms, some may not want to get married, and this is fine.
These reports serve best as a pragmatic jumping-off point. It is simply to say that people should not make major life decisions without awareness of the broader effect that such a choice will have. It is also to say that in light of the facts, however, individual responsibility is thus paramount, and one cannot demand recourse from broader society when a more profitable choice existed and was neglected. This is a balance of priority, and entirely outside of the scope of politics.
On a personal level, I would argue that the most critical factors exacerbating immobility are family structure, financial illiteracy, and social welfare systems that are anything but efficacious. On an ideological level, I recognize the importance of incentivizing hard-work, and for this reason, I would argue for the replacement of large cash transfer payments by means of food stamps, income tax credits, and rental subsidies, as advocated by Robert Doar (Current President of AEI: led the most successful poverty alleviation program in NYC history under Bloomberg, unsurprisingly, through emphasis on familial structure).
Proliferation of large sums of cash are problematic, and they can induce what we all recognize as “the welfare state,” by which work is disincentivized and the individual is prone to stagnation. The safety net advocated by Doar mandates employment of the able-bodied by supplementing their income, establishing a healthy give-and-pull.
I have already noted that I do not have all of the answers, nor does anyone else. We have only just begun to isolate factors which exacerbate immobility and perpetuate poverty. Income inequality has continued to rise because incomes are unequal. Un-profound, yet there is a point to be made. If we were to attempt to equalize outcomes, we would quickly realize that some were soon thereafter better off, once again, than others although everyone received, for the sake of argument, the same amount of money. This is because income inequality is a symptom. It is not the cause, and thus, it cannot be the problem.
We live in an exciting age. Not only per our unprecedented standard of living and the existence of the notion of mobility, but also because we possess the tech and research capabilities necessary to isolate those factors that cause some people to be more successful than others. We can put what we learn to good use, proliferating critical knowledge and allowing the everyday person to apply it such that achieving their desired outcome is possible.
When facts come to light, we always must exercise a healthy skepticism, but we cannot run from them – especially on an ideological basis. This will help enable a system in which we strive to enable success at the individual level: facilitating the ability of each and every individual to provide society with the unique value that they have to offer.
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