Avoiding “Inequality”

There is widespread discomfort with the word “inequality.” It’s OK in all quarters to use “poverty,” but not “inequality.” Why? Because poverty is something I can choose to alleviate a bit with my discretionary charity–it’s my choice, not my fault that it exists. But, “inequality” implies that something is unfair, maybe even implying that I have more than my fair share, and this means I “should” contribute to alleviating it because it is my obligation, not just my free choice. Inequality means it is my responsibility. People don’t like that.

That’s the essence of it. Most of us like feeling charitable of our own free will, but not feeling obligated to help others.

For example, it has long been clear in the West that the contribution employees of major companies make to United Way (usually the charity of choice for payroll deduction), is almost always entirely discretionary. That means the code of conduct around this is that no employee will ever be confronted by her boss asking why she didn’t commit a larger share of her income. However, not so long ago (e.g., in the 80s), it was common in the East (e.g., Cleveland) that a major employer would specify what percentage of income management felt should be given to United Way (usually 1-3%), and an employee would be challenged if he didn’t meet that target.  I know, because I was the chief of staff to the CEO of a major West Coast bank when he took his rotation to head the U Way campaign for a couple years. He wanted to know why the giving was so much higher in the East than in the West. I went there to find out.

My guess is that this is no longer the case, anywhere in the US. We have evolved to a society where it is almost impossible to find a sense of obligation associated with discretionary giving. It’s so much easier and more fun to give when one can view giving to be entirely charitable–“I do it because I want to–but certainly not because I have any obligation to do so. After all, this is my own hard earned money.”

And this attitude permeates the range of incomes. I think most lower paids also feel this way now. After all, due to what has transpired since 1980, they also have much less to charitably give away.

It is not surprising to find this attitude among Conservatives. For Conservatives, the common view is that those of lesser income, for the most part, simply didn’t apply themselves. That, or maybe those at the top are simply endowed with greater talent and that is just “God given,” not something to be tinkered with. This attitude is bolstered with a conservative economic argument that any kind of redistribution will reduce the incentive of people who are striving to rise–which takes both hard work and the willingness to take risk–the attributes characterizing our forefathers who drove their wagon trains across mountains and plains to earn their fortunes. And then another conservative argument–that if the wealthy are taxed, we won’t have sufficient savings going into investment to drive economic growth.

But it is confusing to find this attitude also common among many liberals Why is it that we also fall prey to this substitution of focus? Here are a few of the reasons that liberals fall into this trap:

• America holds tight to the Horatio Alger theme across all spectrums–the belief that everyone can pull himself up by the bootstraps.
• Those of lower income are vulnerable to a number of appealing elements of the complex Conservative agenda: Reducing taxes is highly appealing when real wages haven’t increased in 30 years, while costs such as housing and college tuition have gone through the roof. It’s easy to vote for tax reduction without realizing that after the politically unchangeable (entitlements and defense), the impact will be reduced funding of the public schools your children depend on for future “mobility” or “opportunity.”
• Lawrence Mishel offers one more important explanation for Centrist Democrats adopting the mobility/opportunity preference over inequality in an April 9, 2015, article for The American Prospect: the top 1% are not only Republican donors, but also Democratic donors. Note Hilary Clinton’s cultivation of Wall Street. I could go on about the big money issue, but that’s not the point of this post.

To summarize, there are all these “appropriate” political terms being used–“poverty,” “mobility,” “opportunity,” “shared prosperity,” and others. There is a rather universal avoidance of the term “inequality.”

Part of the reason is that it’s just easier and more comfortable to view charity as a choice, not an obligation.

Part of the reason is the widespread continued adherence to the American ethic of being able to bootstrap oneself, notwithstanding the increasingly evident greater difficulty in doing so–especially without the right parenting and education. And who can argue those don’t cost money–yes, parenting too–parents working two jobs to get by cannot do the right parenting.

Part of the reason is the seemingly effective Conservative rhetoric, and the attendant loss of confidence in government, which leads to sympathy to just starving government–notwithstanding the impact on schools and support systems.

To make matters worse, it turns out that the US has not only a very high level of inequality compared to other countries, but also has a very high correlation of intergenerational income. Zero on the vertical axis means equality. A high number there (the US) means that our rich parents end up with rich kids. We can debate why this is true, but it is true–and this is NOT positive “mobility.”

The reality is that inequality is real, getting worse, and fixing it is an obligation. For the critics, no, it doesn’t mean making everyone equal. It doesn’t mean destroying incentive or investment. Changes in taxation can be modest, and we should also take from defense and from entitlements.