The Forces of Income Inequality and Economic Anxiety in the 2016 Presidential Race
A Rutgers economist says income inequality is getting greater attention because the issue is affecting more groups in the U.S. than ever before
One of the issues shaping the election has been economic anxiety brought about by a changing economy and a shift in policy changes over decades that have chipped away at the social safety net. Rutgers Today spoke with William M. Rodgers III, a professor of public policy at the Edward J. Bloustein School of Planning and Public Policy and chief economist at the Heldrich Center for Workforce Development, about the roots of income inequality and possible solutions to start to close the gap. Williams is the author of a report published by The Century Foundation on the link between food security and an increase in the minimum wage and a recent Economic Policy Institute report on racial and gender earnings inequality.
What brought the issue of income inequality to the forefront?
Rodgers: The increased use of technology in the workplace and the erosion of public policies that support workers have led to stagnating wages for the typical American. The forces of globalization and the decline in the power of unions are impacting more and more people. It is no longer African-Americans who are bearing the brunt of these changes. It is no longer young people bearing the brunt of these changes. It’s people who are 40-something and 50-something. It is people in the suburbs. Bernie Sanders and Donald Trump tapped into Americans who are feeling a lot of the same economic anxiety. It’s young people with large student debt. It’s less educated men in the Midwest who once upon a time could work in the factory, be part of the union, earn a decent salary and put their kids through college.
How did we get to this point?
Rodgers: Prior to the Great Recession, there was the beginning of the dismantling of social insurance. These are public programs that help to cushion the blow of a recession, of job loss or a catastrophic health incident.
Unemployment insurance, Social Security, Medicare, Medicaid and workers compensation are examples of social insurance. These are the social safety nets that, when times get bad, help people through periods of temporary hardship. We are now putting more risk of what happens when you lose your job back on a family and their community.
What are the consequences of income inequality?
Rodgers: Today’s American experience is best described as “two realities.” We have a set of American families that have enough resources to provide education for their children, food for their family, live in a safe neighborhood and have access to quality health care, while a growing portion of Americans can’t afford these basic ingredients of what is needed to achieve the American Dream.
The question is what are the new middle-class jobs that someone without a college degree could hold and have economic security while they are working and also in retirement. I think we are still trying to answer that question.
How can the problem be fixed? Considering the current political climate, what do you think can or will realistically be done to address the issue?
Rodgers: We need to invest in people and their communities. Some things that need to be done are strengthening social safety nets, such as social security and unemployment insurance, investing in our infrastructure and making sure that workplaces are safe and fair, which includes raising the minimum wage to $15 an hour.
In order to make these investments, our policymakers must shift the terms of policy debates from “we can’t afford it” to building “budgets of need,” and then figure out how to fund the policy’s initiatives. Policymakers must also do a better job of articulating how inequality not only hurts those at lower rungs of the income ladder but also Americans at higher rungs.
Politically, many cite the need for campaign finance reform to remove big money’s influence. That may be true, but we also need to address the fact that gerrymandering has reduced the number of competitive Congressional districts. As a result, many politicians have little motivation to compromise. If they do, regardless of party, they run the risk of losing their seats.
Who benefits if we close the gap between rich and poor?
Rodgers: Simply put, everyone benefits.
To learn about more research at Rutgers that explores issues at the forefront of the presidential race, visit our Rutgers Election 2016 page.
Media inquiries contact Andrea Alexander at aalexander@ucm.rutgers.edu or 848-932-0556