Define Income Inequality

By Goldberg, Jonah | AEI Paper & Studies, March 2014 | Go to article overview

Define Income Inequality


Goldberg, Jonah, AEI Paper & Studies


Democrats are revving up for a huge national "conversation" on income inequality. This is in no small part because the Obama administration and congressional Democrats would rather talk about anything other than Obamacare.

But it would be unfair to say this is all a cynical effort to gain partisan advantage. For instance, New York City Mayor Bill de Blasio is certainly sincere in his desire to take "dead aim at the Tale of Two Cities" in the Big Apple. He and his team want to fix the distribution of income in New York by distributing it differently.

This in itself points to the different perspectives on the left and right when it comes to income inequality, perspectives worth keeping in mind if you're going to try to follow the conversation to come.

As a broad generalization, liberals see income as a public good that is distributed, like crayons in a kindergarten class. If so-and-so didn't get his or her fair share of income, it's because someone or something--government, the system--didn't distribute income properly. To the extent conservatives see income inequality as a problem, it is as an indication of more concrete problems. If the poor and middle class are falling behind the wealthy, it might be a sign of declining or stagnating wages or lackluster job creation. In other words, liberals tend to see income inequality as the disease, and conservatives tend to see it as a symptom.

Also, income inequality can be a benign symptom. For instance, if everyone is getting richer, who cares if the rich are getting richer faster? New York City's inequality, for instance, is partly a function of the fact that it is so attractive to poor immigrants who start at the bottom of the ladder but with the ambition to climb it rapidly.

Non-Economic Issues

This raises the most delicate aspect of income inequality, the extent to which it can be driven by non-economic issues. New York City's new public advocate, Letitia James, delivered her inaugural address while holding hands with Dasani Coates, a 12-year-old girl who until recently lived in a grimy homeless shelter with her parents. She was profiled in a nearly 30,000-word New York Times series that aimed to highlight the Dickensian nature of the city and succeeded in anointing Dasani as the living symbol of income inequality in New York.

James held Dasani's hand aloft for emphasis when she proclaimed, "If working people aren't getting their fair share . …

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