Hannah Arendt Center for Politics and Humanities
5Jul/130

The Moral Roots of Income Inequality

ArendtWeekendReading

Inequality is not simply a matter of numbers and economics. Thomas Edsall explores at the moral and cultural roots of income inequality last week in the New York Times. His essay takes as its basis a recent speech by Alan B. Krueger, President Obama’s Chairman of the Council of Economic Advisers, entitled “Fairness as an Economic Force.” Here is one excerpt from Krueger’s speech:

In considering reasons for the growing wage gap between the top and everyone else, economists have tended to shy away from considerations of fairness and instead focus on market forces, mainly technological change and globalization. But given the compelling evidence that considerations of fairness matter for wage setting, I would argue that we need to devote more attention to the erosion of the norms, institutions and practices that maintain fairness in the job market. We also need to focus on the policies that can lead to more widely shared – and stronger – economic growth. It is natural to expect that market forces such as globalization would weaken norms and institutions that support fairness in wage setting. Yet I would argue that the erosion of the institutions and practices that support fairness has gone beyond market forces.

While globalization, outsourcing, and the rise of robots certainly are part of the reduction of wages and the hollowing out of the middle class, they do not tell the whole story.

peanuts

At a time when real wages are stagnant, CEO pay is skyrocketing, income at the highest levels of society is increasing disproportionately, and corporate profits as a share of Gross Domestic Product have reached record levels.

Importantly, Edsall notes that conservatives and liberals both have focused a light on this disintegration of the moral fabric of our society, though they often do so in very different ways. He begins his essay with a discussion of Charles Murray and David Brooks, each of whom argue that the economic and political problems we face have their roots in “disintegrating moral norms.”

While Krueger’s analysis is very different from Charles Murray’s or from David Brooks', all three share an interest in what they see as disintegrating moral norms. And there is something else that binds them: the trends that Murray, Brooks and Krueger deplore continue with unrelenting force. From Murray’s perspective, social decay and irresponsible behavior have spread into the broad working and lower middle class.

Liberals and conservatives often reject alliances on moral questions, and their analyses of the moral decay are meaningfully different. And yet, Edsall does well to bring them together and to remind us that radical inequality and political paralysis may have cultural and moral valences that transcend political affiliation.  His essay on “Our Broken Social Contract” is your weekend read.

You might also look at Alan Krueger’s speech, “Fairness as an Economic Force.” originally given at Oberlin College. I have written about Murray’s book Coming Apart, here and here.

-RB

19Feb/130

The Great Divide

In this week's Chronicle of Higher Education, Richard D. Kahlenberg lifts (or rips) the band-aid off a wound that has been festering for decades. For much of the 20th century, class animated campus Marxists. Since the 1970s, race and gender have largely supplanted class as the source of youthful protest. But the pendulum is swinging back. Studies find that "being an underrepresented minority increased one's chances of admissions at selective colleges by almost 28 percentage points, but that being low-income provided no boost whatsoever." Will racial and gender politics give way to a renewed interest in class? Will there be a divide on the left between class and identity politics? In either case, the debate is beginning.

Here is Kahlenberg:

Long hidden from view, economic status is emerging from the shadows, as once-taboo discussions are taking shape. The growing economic divide in America, and on American campuses, has given rise to new student organizations, and new dialogues, focused on raising awareness of class issues—and proposing solutions. With the U.S. Supreme Court likely to curtail the consideration of race in college admissions this year, the role of economic disadvantage as a basis for preferences could further raise the salience of class.

This interest represents a return to an earlier era. Throughout the first half of the 20th century, class concerns animated Marxists on campus and New Deal politicians in the public sphere. Both groups papered over important dimensions of race and gender to focus on the nation's economic divide. Programs like Federal Housing Administration-guaranteed loans and the GI Bill provided crucial opportunities for upward mobility to some working-class families and students.

Colleges, meanwhile, began using the SAT to identify talented working-class candidates for admission. But FHA loans, the GI Bill, and the SAT still left many African-Americans, Latinos, and women out in the cold.

In the 1960s and 70s, that narrow class focus was rightly challenged by civil-rights activists, feminists, and advocates of gay rights, who shined new light on racism, sexism and homophobia. Black studies, women's studies, and later gay studies took root on college campuses, along with affirmative-action programs in student admissions and faculty employment to correct for the lack of attention paid to marginalized groups by politicians and academics alike.

Somewhere along the way, however, the pendulum swung to the point that issues of class were submerged. Admissions officers, for example, paid close attention to racial and ethnic diversity, but little to economic diversity. William Bowen, a former president of Princeton University, and his colleagues reported in 2005 that being an underrepresented minority increased one's chances of admissions at selective colleges by almost 28 percentage points, but that being low-income provided no boost whatsoever. Campuses became more racially and ethnically diverse—and all-male colleges began admitting women—but students from the most advantaged socioeconomic quartile of the population came to outnumber students from the least advantaged quartile at selective colleges by 25 to 1, according to a 2004 study by the Century Foundation.

 Read the whole article here.

Kahlenberg’s inquiry into the return of class to debates on campus cannot be seen outside the context of rising inequality in the U.S. Just this week Anne Lowrey reports in the New York Times that incomes are rising briskly for the top 1% but are actually stagnant or falling for everyone else:

Incomes rose more than 11 percent for the top 1 percent of earners during the economic recovery, but not at all for everybody else, according to new data.

It may be true that prices are declining and the middle class, despite its wage stagnation, is still living well. But we cannot ignore the increasing divide between the rich and the middle class. Not to mention the poor.

This was the topic of an op-ed essay in Monday’s New York Times by Nobel Laureate, Joseph Stiglitz, who writes, “The gap between aspiration and reality could hardly be wider.” Stiglitz, like Kahlenberg, sets the question of class inequality against increasing racial equality:

While racial segregation decreased, economic segregation increased. After 1980, the poor grew poorer, the middle stagnated, and the top did better and better. Disparities widened between those living in poor localities and those living in rich suburbs — or rich enough to send their kids to private schools. A result was a widening gap in educational performance — the achievement gap between rich and poor kids born in 2001 was 30 to 40 percent larger than it was for those born 25 years earlier, the Stanford sociologist Sean F. Reardon found.

Many on the left will respond that race and class are linked: minorities, who are poor, they say, suffer worst of all. That may be true. But race, gender, and identity have dominated the conversation about equality and oppression in this country for 50 years. That is changing. This will be hard for some to accept, and yet it makes sense. Poverty, more than race or gender, is increasingly the true mark of disadvantage in 21st century America.

-RB