April 21, 2016

BARELY LEGAL | Income Inequality and Proposed Solutions

Print More

While income inequality has come to the forefront of American politics, most Americans are unaware of the impacts that it has on our country. The effects of income inequality impact everything from our economy’s performance to access to healthcare to the fairness of our judicial system. A variety of solutions have been proposed to help combat the impacts of income inequality, however it is important that we confront not just the unfair outcomes, but the root of the problem as well.  Rather than just pouring increasing amounts of money into ineffective welfare programs, we should focus on incorporating measures for fairer access to education.

The rise of income inequality has reached devastating proportions in the United States. The OECD reports that the U.S. has “the second-highest level of inequality, after Chile.” Moreover, the problem worsens when we account for not only disparities in income, but also disparities in wealth.  As the Center for Poverty and Inequality notes, almost half of income advantages are transferred from parent to child, making the problem cyclical and intergenerational. The present message coming from politicians suggest that social mobility has been declining, and even the most optimistic studies conclude that social mobility has stagnated at a level that makes countries such as Denmark twice as socially mobile as the U.S.

It is important to note that an excessive income inequality is not simply a representation of unfairly distributed resources. It also signals larger problems for the economy and society as a whole. Vast income inequality, combined with low levels of social mobility discourages, as well as often actively prevents, future generations from taking proactive steps to improve their situation — such as getting educated, starting businesses, and staying away from crime. Moreover, The Washington Center for Equitable Growth reports that if the U.S. could reduce its income inequality to Canada’s level, our economy would grow almost 30 percent faster. Additionally, increasing a country’s Gini coefficient (the statistical device used to measure inequality) has also been associated with a lower tax base, meaning that reducing income inequality would naturally increase tax revenues by expanding the middle class. Furthermore, the impact that income inequality has on the outcomes of criminal proceedings cannot be overlooked. Decisions to prosecute cases are often determined by the prosecution’s expected chances of success at trial, which may certainly be affected by a given defendant’s ability to afford an attorney. Whether the defendant must wait in jail before criminal proceedings is also largely a function of the defendant’s ability to afford bail. When income inequality so pervasive as to undermine the health of the economy, disrupt equal justice, and discourage individual people from working to make their lives better, change is needed.

Many proposals have been made to attempt to address income inequality; however, no solution that ignores the role education plays in shaping our economy will be complete. Education has always been a route to social mobility, but with the rise of income inequality, it is slowly becoming the only option for many underprivileged Americans. Both the public and private sector often require a college degree for entry-level positions. Moreover, even when entry-level jobs do not require a college degree, they often only offer a chance for promotion to college graduates. The more corporations adopt these kinds of practices, the more the notion of starting from the bottom and climbing the corporate ladder disappears.  The rise of big box stores, outsourcing, and technology have also eliminated many opportunities that the average American might otherwise have to pursue a trade or open a small business. These economic realities have lead to a rapid rise in the demand for education which has simply outpaced the supply and inflated tuition.

Pursuing a college degree has become incredibly competitive and expensive. Due to lack of available seats, once qualified students are now rejected in droves. For example, as the San Francisco Chronicle reported, about 78 percent of California’s public universities are unable to admit otherwise qualified students, and in 2014 alone these universities rejected 22,000 students. This problem has trickled down to community colleges as well. Their once proud accept-anyone-interested approach has become an application process which has denied hundreds of thousands of otherwise qualified students access to higher education. It simply cannot be said that we are taking the correct actions to combat income inequality when people who are ready, eager, and able to improve themselves are denied the opportunity to do so. Even for students who are accepted, the rising costs of an education are also problematic and must be addressed. When education is one of the only viable paths to a middle class life, we cannot force students to be encumbered by unreasonable debt to get there.

Income inequality is cyclical. It is both cause and effect. By failing to provide opportunities for social mobility, and saddling with debt those who attempt to make better lives for themselves,  we fail to combat the cause of income inequality and guarantee the next generation its effects. Politicians who have proposed solutions ranging from expanding welfare programs to changes in infrastructure to shifting tax policies cannot succeed without addressing the dire need to fund education. In modern America, educating our people is simply a prerequisite to alleviating and reducing income inequality.

Alexander Weiner is a J.D. candidate at Cornell Law School. Responses can be sent to associate-editor@cornellsun.com. Barely Legal appears alternate Fridays this semester.