The Political Consequences of Growing Income Inequality in America
According to a new report released by the Center on Budget and Policy Priorities, based on an analysis of IRS data by economists Thomas Piketty and Emmanuel Saez, the rich are getting richer while the poor... well, you know the rest.
Income inequality is not a new phenomenon in American society. But, as Piketty and Saez find, we have not seen such large shares of income go to the nation's top earners in a very long time.
"Two-thirds of the nation's total income gains from 2002 to 2007 flowed to the top 1 percent of U.S. households, and that top 1 percent held a larger share of income in 2007 than at any time since 1928," write the authors of the CBPP summary of the Piketty and Saez research.
To my astonishment, they add that during this period, "the inflation adjusted income of the top 1 percent of households grew more than ten times faster [my emphasis] than the income of the bottom 90 percent of households."
Income inequality has been growing since the mid-1970s.
During the three decades that followed World War II (1946-1976), however, the trend was toward greater income parity, "with the incomes of the bottom 90 percent actually increasing more rapidly in percentage terms, on average, than the incomes of the top 1 percent."
Due in large part to a radical re-organization of the nation's economy from a manufacturing based to a technological oriented and service based economy, since the mid-1970s, the incomes of the bottom 90 percent have grown only slightly, while the incomes of the top 1 percent have gone up dramatically.
It should come as no surprise, then, that such a growing concentration of income (and wealth) has serious consequences for the health of our political system.
Generally speaking, involvement in politics places demands on people's scarce resources. "Citizens with lots of income can simply afford to do more – of everything – than citizens with little money," write political scientists, Steven Rosenstone and John Hansen, in their book, Mobilization, Participation, and Democracy in America.
With all that extra money, the rich can amplify their voices in our political system by financing political parties, candidates, political action committees, and other causes they care about.
While money is not a prerequisite for political activism, it does make getting involved in politics a lot easier.
According to Rosenstone and Hansen, "A car is not a necessary condition for political action, for example. But having one makes it much easier to get to a school board meeting, a political rally, or a candidate's campaign headquarters. Money can be used to hire someone to do the daily chores – to clean the house, buy the groceries, cook dinner, baby-sit the kids – and free up time for politics. Thus, if people want to participate in politics, money makes it easier for them to do so."
The threat that growing income inequality poses to our political system is that it undermines the core expectation of political equality in a democracy.
Certainly, political equality does not guarantee substantive equality (e.g., food, housing, healthcare, education, work, and so on), but public officials are more likely to pay attention to and prioritize the policy expectations of people who make their needs, wants, and desires known through their activism.
People with money, especially the obscenely rich, are better able to have their voices heard.