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Inequality crisis bad for all of us — faith in government not gone, yet

Those of us in the business of trying to influence “the conversation” around public policy are ever alert to focus groups and opinion polling, and perhaps too heedful of the way the current winds are blowing.

Those of us in the business of trying to influence “the conversation” around public policy are ever alert to focus groups and opinion polling, and perhaps too heedful of the way the current winds are blowing.

Here’s an example. 

Last summer I heard in a panel discussion that the word “fairness” was not testing so well, that the public did not warm to the idea as much as one might expect, and that high gas prices trumped every other concern.

This surprised me only a little, because we all know that Americans — and even us relatively more egalitarian Minnesotans — characteristically put a higher value on freedom than on equality of outcomes.

But I just have a hunch that the international economic nosedive — rising unemployment, declining incomes and shrunken retirement savings, and who’s worried about gas prices anymore? — is generating a comeback for fairness.

The makings of a crisis
It needs to make a comeback because we have the makings of an inequality crisis in our state and nation.

One of the best and most recent analyses of the situation was in a recent edition of Harvard Magazine, in an article by magazine co-editor Elizabeth Gudrais, entitled “Unequal America: The Growing Gap.” Her survey of the growing body of research around the study of the effects of economic and social inequality produced this startling observation:

“There is also evidence that living in a society with wide disparities — in health, in wealth, in education — is worse for all the society’s members, even the well off. Life expectancy statistics hint at this. People at the top of the U.S. income spectrum ‘live a very long time,’ says Cabot professor of public policy and epidemiology Lisa Berkman, ‘but people at the top in some other countries live a lot longer.’ “

Gudrais summarizes overwhelming evidence that almost all the other industrialized democracies in Western Europe and Japan, where economic security and equality (and taxes) are greater, also have higher bottom-line quality-of-life indicators.

A regression to 1920s level
Consensus abounds that our economy has regressed to the 1920s level of inequality, with those in the top 1 percent of incomes taking home 20 percent of the total income, twice the percentage they corralled in the 1960s and 1970s, which was something of a historical plateau for equality in the United States. A reversal began in the early 1980s and has intensified over the last 30 years; the U.S. now lags behind other wealthy and democratic nations on many indicators, including health, longevity and higher education attainment.

Policies at the federal and state level that have cut taxes for the wealthy, cut the quality of economic security safeguards, reduced the power of labor unions, and immigration and trade policies that have cheapened the price for labor are often cited as chief contributors to rising inequality.

“Research indicates that high inequality reverberates through societies on multiple levels, correlating with, if not causing, more crime, less happiness, poorer mental and physical health, less racial harmony, and less civic and political participation,” Gudrais continues.

“Tax policy and social-welfare programs, then, take on importance far beyond determining how much income people hold on to,” Gudrais writes. “The level of inequality we allow represents our answer to ‘a very important question,’ says Nancy Krieger, professor of society, human development and health, at HSPH (Harvard School of Public Health: ‘What kind of society do we want to live in?’).”

Defenders of inequality and laissez-faire tax policy like to point out that  that low-income people can probably get enough to eat, are often overweight and pay relatively less for televisions and electronic gadgets than they did in the 1950s. But even a slightly higher standard-of-living at the bottom and the middle appears to be less important than the growth in what social scientists call “relative deprivation.”

Possible solutions for Minnesota
So what can we do in Minnesota about this, with a dramatically shrunken pool of public money and a projected budget shortage of more than $5 billion over the next two years?

Let’s take a run at elevating both government accountability and putting a premium on things that broaden prosperity.

The free market, despite its spectacular failures of late, is still valued, and there are few signs of support for a massive direct government redistribution with an aim toward a utopian equality. Faith in government’s ability to do the right thing remains unacceptably low.

A poll in Minnesota and four other Midwestern states last summer, commissioned by the Midwest Democracy Network and funded by the Joyce Foundation, found that trust in state government had declined slightly and that only about a third of the public trusted it to do the right thing all the time or most of the time.

Midwesterners haven’t given up on government
But the poll also showed that Midwesterners have not given up on government, that they support political and campaign finance reforms and more accountability measures to make government more effective. Almost 70 percent in the poll rejected the notion that “trying to fix government will not make a difference.”

And now that the Legislature has convened, it makes eminent sense not to worsen the inequality gap and to bring an acute awareness of it to our budget conversations. Let’s bring a “fairness filter” to everything we do.

Dane Smith is the president of Growth & Justice. A nonpartisan advocate for fair taxation and smart public investment, Growth & Justice believes a sustainable economy provides the foundation for a just society.

Want to add your voice?

If you’re interested in joining the discussion by writing a Community Voices article, email Susan Albright at salbright [at] minnpost [dot] com.