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6/6/16

 
 
 

CONTACT: Craig Chamberlain

Editor’s note: Rising income inequality has been brought front and center as an issue in this year’s presidential campaign. But do we really know what’s driving it, and the keys to closing the gap? Are popular explanations supported by research and data? Sociologist Kevin Leicht has focused much of his career on inequality and related issues, and suggests a rethink in “Getting Serious About Inequality,” an article published in the spring issue of The Sociological Quarterly. Leicht (pronounced Lighsht) heads the sociology department at Illinois and also is the co-author of “Post-Industrial Peasants” and “Middle Class Meltdown in America,” both published over the last decade. He spoke with News Bureau social sciences editor Craig Chamberlain.

Inequality might resonate as a political issue for a variety of reasons. But from a societal perspective, why does it matter?

With extreme inequality, social mobility declines – people simply transmit their advantages to the next generation, which has done nothing to earn those advantages other than choosing their parents well. Extreme inequality allows the well-heeled to buy political influence others can’t have. This leads to a political and economic system with privately hoarded gains and publicly subsidized losses. Extreme inequality leads to disinvestments in public goods, since the well-heeled can purchase alternatives and hoard the benefits. And ultimately, extreme inequality harms the international competitiveness of the country – human potential is wasted and money is spent dealing with the consequences of inequality rather than on producing anything.

But some of the worst consequences of inequality happen because of the slow unraveling of the feeling that “we’re all in this together.” We no longer have a coherent narrative for getting ahead. There has been a rise in open expressions of racism and cultural bigotry as people look for reasons that they’re not getting ahead.

Our political culture has championed what my co-author Scott Fitzgerald and I call the “politics of displacement” – we’ll fight about anything but money, from Sharia Law to transgender restrooms. The timing of these arguments almost seems designed to keep actual economic inequality and fairness off the political agenda, though it has been a focus in the political campaign, which is a good thing.

Many different factors have been identified as drivers of rising income inequality, but you label some popular ones as “myths” – among them race and gender discrimination. Since there are still significant gaps in average income between men and women, and between whites, blacks and Latinos, how do you explain this?

There is still a considerable amount of gender and racial inequality in earnings and income in the U.S. And the wealth gap between racial groups is as bad as it has ever been and is not improving. These problems still exist.

But inequality has been growing within groups far faster than it has been growing between them. If anything, the gaps between groups have been shrinking, while the growth in inequality within groups has been growing like weeds since 1980. The gaps between the top 5 percent and lowest 20 percent of the household income distribution have moved from a ratio of 4 to 1 to around 10.5 to 1. This movement has happened within every racial and ethnic group. Most of this new inequality is not addressed in the social science or policy literature in any systematic way.

When looking at gaps between men and women, in some cases the shrinking gender gap has been fueled by the declining earnings of men rather than the increasing earnings of women. This is almost certainly not a formula for peace and harmony.

You also argue that getting more people into college or encouraging more low-income single parents to marry – solutions from the political left and right, respectively – won’t make a difference on their own. How so?

College education has a lot to recommend it, both for individuals and the larger society. Nobody would argue that a more-educated population is a bad thing.

But will more college education reduce inequality? It is difficult to see how. There is more economic inequality among college graduates than there is between the college-educated and those without degrees. The financial value of a college education is inversely proportional to the number of people with a college degree. The educational earnings gap among men is driven by the decline in the earnings of the non-college-educated, not the rise in earnings among the college-educated. And there is much evidence that college-educated workers are replacing non-college-educated workers in jobs that are not especially skilled.

Those on the political left often argue that those with little income just need to get an education and they will get ahead just like those who already have educational credentials. But advantaged groups always find new ways to distinguish themselves, and there is almost no way that increasing the supply of college graduates will make those who are traditionally excluded better off.

The equivalent argument on the political right is that family structure drives inequality and all poor people need to do is marry. But this is based on a fallacy similar to the educational argument of the left. Those who cannot find economically reliable mates tend not to marry. Differences in marriage rates by social class are increasing, regardless of race. The average woman in poverty would have to marry at least two men from her socioeconomic class to leave poverty – so we can either legalize polyandry or figure out how to provide families with the economic stability to enter marital unions and stay there.

Both arguments take the position of married people right now and educated people right now and assume these rewards are available to everyone for the taking. They’re not.

So if addressing these issues won’t reduce income inequality, based on your research, what will?

In the end, inequalities are about jobs, incomes and the ability to accumulate wealth. Ultimately, we need to support institutional changes that create more labor market stability and make sure that all working people are treated decently. This means paying people more money when productivity rises rather than letting CEOs and investors abscond with the revenues. It means unrigging the tax system so that the poor aren’t supported by taxes extracted from the near poor. It means changing our wealth markets so that wealth accumulation is tied to prosperity for the rest of us and everyone has a stake in it.

It’s amazing how stable the world can be when mom and dad have steady jobs with earnings that slowly rise. It’s amazing how unstable the world can be when mom and dad don’t know how they’ll pay the rent next month and can’t put food on the table. There are entirely too many Americans in the latter situation.

 

Editor’s notes:

To reach Kevin Leicht, call 217-333-1950; email kleicht@illinois.edu.

The article “Getting Serious About Inequality” is available online (access may be restricted) or from the News Bureau. Scott Fitzgerald is a professor of sociology at the University of North Carolina at Charlotte.