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Blog: NETWORK’s Issue Agenda on Target

Jan 12, 2012 | By Stephanie Niedringhaus

Today, I listened to a presentation at the Center for American Progress by Dr. Alan Krueger, Chairman of the President’s Council of Economic Advisors. As he spoke about the rise and consequences of inequality, I again recognized the timeliness of NETWORK’s campaign on the wealth gap (Mind the Gap!) – and the critical importance today of our work for economic justice.

Alan Krueger’s talk focused on how rising inequality and the diminishment of the middle class are very much at the heart of our nation’s economic woes. Overall trends in recent decades have been headed in the wrong direction. The percentage of middle class people has shrunk from a little over 50% in 1970 to 44% in 2000, to just 42% in 2010. We also now have more people at the lowest and highest extremes.

Growing inequality has come at a time when economic mobility has decreased. More and more, we find in our country that parents’ incomes are excellent predictors of their children’s future incomes – i.e., poor children are highly likely to become poor adults. This “land of opportunity” is providing less opportunity than we like to imagine.

Much of today’s rising income inequality can be traced to the dispersion in hourly wages. Dr. Krueger mentioned several causes – starting with technological changes that require more educated workers, the proliferation of very high salaries in the finance/real estate sector, less skilled U.S. workers competing with workers around the world, declining union membership, and tax policies that favor the rich.

Consequences of inequality include lower morale and productivity among those who feel they are underpaid. As their productivity decreases, economic problems grow.

NETWORK focuses on public policy, and Dr. Krueger mentioned several policy areas that could directly impact rising inequality. They include:

  • Support of the Affordable Care Act (2010 healthcare reform legislation, w