Economic Inequality Takes Center Stage, Again

If social workers are serious about our concern for the millions of people who are struggling in today’s economy—and I assume that we are—then you owe it to yourselves and the vulnerable people you care about to read President Barack Obama’s latest speech on the economy.   Aptly staged yesterday at THEARC in Ward 8 in southeast Washington, DC—one of the most economically depressed communities in the District of Columbia—the President delivered one of his most compelling speeches about the devastating impact economic inequality is having on our nation.  The speech was short on rhetoric and long on research-based facts.  It was an appeal to reasonable people regardless of political or ideological persuasion.   It is a must-read for social workers.

I will confess that I do not always read the President’s speeches verbatim.  Like many political figures, usually much of what you find in his speeches is not substantive but designed for political theater and effect.  This speech was different and I am glad I took Ezra Klein’s advice and read the speech for myself.

I have been railing about economic inequality since I began teaching social welfare policy courses a decade ago.  It seemed obvious to me at the time that stagnant wages for the middle class since the mid-1970s would eventually have a pronounced effect on a 70 percent consumer-driven economy.  It doesn’t take a Harvard-trained economist to figure out that declining aggregate demand would eventually lead to slower growth.  Supply-side economists—particularly Austrian-born Fredrich Hayek and Milton Friedman of the Chicago School—had been promoting a theory of “trickle-down” economics right out of Ayn Rand’s Atlas Shrugged that suggested tax cuts for the “job creators” would result in greater prosperity for all.  After Presidents Reagan and Bush sold the idea to Congress and pushed through tax cuts skewed heavily towards the wealthy, we are still waiting for income to trickle down.

President Obama’s speech was timely in that it followed closely on the heels of Pope Francis’ Evangelli Gaudium which took to task those very same ideas and debunked the notion that unregulated capitalism would result in a reasonable distribution of wealth.  One can debate about what is just and fair, but we are beginning to see that there is a point when escalating economic inequality has broad negative implications for the entire country if not the world.

The President was right not to offer any specific policy fixes but highlighted several areas that need attention such as early childhood education, increased wages—including bumping up the minimum wage, and helping the long-term unemployed.  He left the door open for reasonable Republicans (oxymoron?) to step forward with ideas that would provide better outcomes for middle class workers and their children.  Not that it’s likely as we are still waiting for Republicans to present their ideas for healthcare reform if in the unlikely event they are able to repeal the Affordable Care Act.  President Obama stated:

And that’s why, even as I will keep on offering my own ideas for expanding opportunity, I’ll also keep challenging and welcoming those who oppose my ideas to offer their own.  If Republicans have concrete plans that will actually reduce inequality, build the middle class, provide more ladders of opportunity to the poor, let’s hear them.  I want to know what they are.  If you don’t think we should raise the minimum wage, let’s hear your idea to increase people’s earnings.  If you don’t think every child should have access to preschool, tell us what you’d do differently to give them a better shot.

Rather than put their heads in the sand as many conservative economists and think tanks have done by rejecting the idea that there are any negative ramifications from rising inequalities, progressives—led by John Podesta and the Center for American Progress (CAP)—have decided to engage the debate in a responsible way by seeking and generating sound research-based evidence of the impact of economic inequality on economic growth.  CAP’s new forum, The Washington Center for Economic Growth, brings together some very bright people to gather evidence for what appears obvious—that extreme economic inequality is associated with lower economic growth.

Is this an issue for social workers?  Should we participate in this debate?  Can we influence the debate?  What should our roles be in addressing economic inequality?  More to come.

Written by Charles E. Lewis Jr., Ph.D
President, Congressional Research Institute for Social Work and Policy

The post Economic Inequality Takes Center Stage, Again appeared first on Congressional Research Institute for Social Work and Policy.