Inequality focus is not bad economics for candidates

There are two arguments for why political candidates should not center inequality in the economic narrative they present to voters: an inequality focus is bad economics, or it’s not a short-term electoral winner. Both lack merit.

From a strictly analytical perspective, the staggering rise in inequality in recent decades is the single most important economic trend in the United States, and it has been essentially zero sum. This means that the rise in top incomes is related directly to decelerating growth for everybody else.

The traditional argument against focusing on inequality is that it runs into a steep equity-versus-efficiency trade-off, and that faster growth is preferable to a more equitable distribution of growth. But inequality’s rise has directly caused the stunted growth of the 2000s, and it will do so going forward if not addressed.

Further, many of the measures on the agenda to fight inequality are actually growth-promoting in their own right — like investment in kids (particularly poorer kids), public investments in infrastructure and greenhouse gas abatements, and expansionary macroeconomic policy.

OUR VIEW: Democrats should ditch the sky-is-falling pitch

The Democratic presidential primary debate on Jan. 14, 2020, in Des Moines, Iowa. (Photo: Scott Olson/Getty Images)

In regards to short-term electoral outcomes, maybe it’s true that “inequality” sounds too abstract to many voters, and maybe new and smart communications strategies are needed to help these voters connect the dots from inequality to their own kitchen table concerns. But in the long run, these voters do need a clear and evidence-based story for what has happened to make their economic lives so tough. And what happened was a radical redistribution of power and leverage in markets (particularly the labor market) that allowed more privileged economic actors to claim wildly disproportionate shares of U.S. income growth.

Calls to reduce inequality in the U.S. economy are too often chalked up to envy or said to spur divisiveness. But it is the rise of inequality itself that has been poisonously divisive. We can’t have a better economy or less polarized politics until we face up to this.

Josh Bivens is research director of the Economic Policy Institute.

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