Talking about income inequality

Talking about income inequality

Author Timothy Noah to speak in Hackensack

Timothy Noah was worried about income inequality before it was fashionable.

In fact, portions of his 2013 book, “The Great Divergence: America’s Growing Inequality Crisis and What We Can Do about It,” were revised at the last minute to reflect the fact that in 2011 the Occupy Wall Street movement had moved the question to the forefront of the public conversation.

Next week, Mr. Noah will talk about income inequality at Farleigh Dickinson University in Hackensack, under the auspices of North Jersey Public Policy Network.

Mr. Noah said the current trend of growing inequality dates to 1979.

That’s when increases in worker productivity — and in national wealth — stopped being passed on to workers. Since then, increases in national wealth mostly have translated into income gains for the wealthiest Americans.

“Income and inequality has been a story as long as I’ve been a journalist,” Mr. Noah said. He began his journalism career in 1980 at the New Republic; he is now labor and employment editor at Politico.

16-2-V-noah-book“I read about this subject quite a bit over the years,” he said. “I was struck by the fact you were constantly hearing contradictory explanations for what was going on. It was a bit of a mystery. Finally, when the recession hit in 2007, I got more interested in the topic and started poking around and discovered that the trend had been going on for so long that there actually was emerging a kind of rough consensus of what its causes were. In 2010, I was fishing around for a longform project to write for Slate magazine, where I then worked, and I decided to write about income inequality. I decided to expand the mega story into a book.”

Two trends are at work in the growth of income inequality, he said.

“One is the growing divide between people with a college education and people without. Recently we’ve seen the college premium wear off a bit, and now the premium you see is the graduate school premium.

“The other divide is the divide between the top one percent and the 99 percent. Over the last decade, the divide between the one percent and the 99 percent is the most profound trend.”

When he wrote his article for Slate, he lamented that income inequality was not part of the political conversation.

But in the 2012 presidential election season, and now again in 2016, it has been.

“The one percent versus the 99 percent is a phenomenon that lends itself extremely well to electoral politics,” Mr. Noah said. “You can demonize the 1 percent to your heart’s content and not be worried about getting enough votes to win the election.”

It’s the core message of Democratic candidate Senator Bernie Sanders. But Republican candidates also raised it, both in 2012 and in this year’s campaign.

How does income inequality — the rich growing ever richer — hurt the non-rich?

“You see it in the hollowing out of the middle class. We’ve seen much shrinkage in the middle class. The good news is that a great many people have moved up, but that’s been less true over the last decade and a half. We’ve continued to see a decline in the size of the middle class, and that’s obviously worrisome.

“It has helped poison our politics. We are living in a period where politics are unusually partisan. Studies have actually shown that during periods of greater income inequality you tend to see greater partisanship in Congress. It seems a natural outgrowth. A kind of tribalism starts to emerge. There’s less of a sense of e pluribus unum, more of a sense that there’s us and there’s them.

“Bringing income growth for the typical worker in line with productivity growth would be good for the 99 percent. It would probably be good for the overall economy. When you don’t see a rise in the typical worker’s income proportionate with productivity growth, you start to wonder how long workers will care about doing a good job. It creates alienation from work,” he said.

So what led to the present situation?

“Going back to 1979, one trend was a failure in the education system to produce a sufficient number of highly skilled workers to meet a growing demand for highly skilled workers; that shortage drove up the value of highly skilled workers.

“In recent years, the significance of education has diminished as a driving factor. Education was a significant factor in the ‘80s and ‘90s, but in the oughts and teens education really hasn’t played much of a role.

“Another trend was the deregulation of Wall Street, which allowed people in finance to earn much more money than previously and to socialize a great deal of the risk they were bringing on to the financial system, a level of risk that hadn’t been tolerated before.

“Finally, I would say the decline of labor unions was another big contributor.”

Can the rise in inequality be reversed?

“There is no one policy solution,” Mr. Noah said. “This is a complex problem that evolved over a long period of time. It’s going to require a lot of different actions.

“There’s still much talk about continuing to reregulate Wall Street, taking the first step that was Dodd-Frank a few steps further. There’s an interesting amount of bipartisan support for breaking up the big banks, which would help ease income inequality, somewhat. Certainly making college more affordable would help with the education piece.

“Rebuilding labor unions also would help. We’re starting to see some talk among Democrats about changes in labor law that would make it a bit easier for labor unions to organize workplaces. Going back to 1947, labor law in America has been much more restrictive of the rights to organize than in other advanced industrialized democracies.

“I don’t think we should expect to see quick action on any of these things. The discussion has begun, and I think that’s a positive sign. Discussion of the problem will eventually lead to a movement toward consensus on some of the possible solutions. There is interest in recalibrating the economy in a way that rewards work more efficiently. I think politicians on both sides of the political aisle will be working for ways to do that.

“I’m not optimistic it can be reversed over the next 10 years. Over 30 years, I am optimistic,” he said.

In his Hackensack lecture, Mr. Noah will speak about the role of political money in the growth of income inequality. He will focus on money spent on lobbying as opposed to campaign contributions.

“The lobbying money has probably had a larger impact,” he said.

“If you go back to 1960, plenty of people were giving money to politicians but you didn’t see a lot of corporations maintaining a presence in Washington to lobby Congress. The big change occurred in the ‘70s and ‘80s. To get a place at the table you need to have a guy in Washington who can get to the table, and that’s the big change that we’ve seen. Business interests are much more deeply involved in the making of all kinds of government policies, under both Democrats and Republicans, than was the case in the ‘60s.”

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