Reprinted from Campaign For America's Future
An NBC News/Wall Street Journal poll recently asked the following question:
"Which concerns you more: the income gap between the wealthiest Americans and the rest of the country, or middle and working class Americans not being able to get ahead financially?"
If you understand how the economy works, that isn't just the wrong question. It's probably a meaningless one.
Fear and Survival
When asked this question, 68 percent of those surveyed said they were most concerned about the middle and working class not being able to get ahead financially. Only 28 percent were more concerned about the income gap -- a major feature of what has come to be known as "wealth inequality."
As economist Jared Bernstein notes, this isn't surprising. "To the extent that we share national values," he writes, "they tend to lean more towards equal opportunities than equal outcomes."
That's true. What's more, we live in a time of economic uncertainty for many Americans. Wages have stagnated and labor-force participation remains low.
As a result, Americans are understandably fearful. In another poll released this week, 65 percent of those polled said the country has "gone off track" while only 28 percent said it was "going in the right direction." Seventy-three percent said they were either "very" or "somewhat worried" that "the United States will suffer another economic downturn which will negatively affect (their) family." And nearly seven out of 10 respondents indicated that they don't expect the next generation to do as well as those which preceded it.
The NBC News/Wall Street Journal's question was asking whether people are more concerned with the "income gap" -- a relatively abstract concept -- or their current circumstances, which they themselves find frightening. When someone is living in fear, their own survival will always be their first priority.
The Wrong Question
What's more, it's a misleading question. We don't live in a world where policy makers must choose between reducing wealth inequality or helping working-class and middle-class Americans get ahead. In fact, the opposite is true: As a practical matter, it's impossible to address one without the other. As Bernstein says, "we can't increase opportunity without reducing inequality."
Nobel Prize-winning economist Joseph Stiglitz has been discussing this for a long time. "Inequality undermines the strength of our economy and contributes to economic instability," said Stiglitz in 2012. That was the year Stiglitz's book on the subject, "The Price of Inequality," was published.
Stiglitz wrote in 2013 that "Inequality stifles, restrains and holds back our growth," and pointed to its effect: the "hollowing out" of the middle class. That in turns leads to lack of consumer demand, lower tax receipts (which leads to reductions in needed government investments), and a rise in boom-and-bust economic cycles.
Inequality leads to a weaker economy. That means fewer jobs, stagnant wages -- and less opportunity to "get ahead."