Teaching and talking about economic and political inequality

In just the past two months, research centers, scholars, and the federal government have released some stunning statistics about gaps between rich and poor, who has been hardest hit by the recession, and wealth distribution in the US. The National Conference on Citizenship (NCoC) has also released data on citizen engagement that reveal striking gaps in public participation along lines of income, race and ethnicity, gender, and education levels. The facts raise concerns that can be incorporated into classroom discussions across the curriculum and in co-curricular and community-based dialogues.  Don’t assume that someone else on your campus is going to raise these issues!

Before we get to the facts, take a short survey developed by Harvard economics professor Michael Norton and Duke’s professor of behavioral economics Dan Ariely. It asks you to quantify your perceptions of wealth distribution in the U.S., not only what you think the distribution of wealth currently is, but also what you think it should be. Take the test here.

As reported in Harvard Magazine’s November-December 2011 issue, Norton and Ariely found:

From left to right: the wealth distribution Norton’s respondents said would be ideal; how they estimated wealth was currently distributed; and the actual distribution of wealth in the United States.

More than 80% of the wealth in the United States belongs to 20 percent of the population, a situation few survey respondents understood or supported. Both Republicans and Democrats wanted a more equitable wealth distribution than what they estimated to be the case. As we approach another presidential election, how will discussions about wealth redistribution get framed?  Let’s begin the conversation from a bipartisan perspective – the current situation needs to change – rather than where we left off during the last presidential election (see for example this 2008 article from the Christian Science Monitor).

Based on Census Bureau data from 1984 to 2009, the Pew Research Center reported this week that the White-to-Black and White-to-Hispanic/Latino disparities were higher in 2009 than they have been at any time since 1984. Specifically, the median wealth of White households is 20 times that of Black households and 18 times that of Hispanic/Latino households.  Also telling, an analysis of age gaps showed that households headed by adults ages 65 and older possessed 42% more median net worth than their counterparts had in 1984. Households headed by adults younger than 35 had 68% less median net worth than their counterparts had in 1984, “by far the highest gap in the 25 years that the government has been collecting such data.”

This week, on Fresh Air, Rolling Stone political correspondent Tim Dickerson explained how U.S. tax policies exacerbate inequality. He says that the average income for the bottom 90% of taxpayers has remained basically flat over the past 15 years, while those in the top 0.01% have seen their incomes more than double, to an average of $36 million. Yet a billionaire in the top 400 pays an effective tax rate of about 17%, about 5 percentage points less than average workers. He provides a fascinating history of bipartisan changes to the tax code over the past twenty years.

So… what to do? As tempting as it is to leave answers to politicians and experts, we know that extreme partisanship in Washington undermines any solution that might come close to what everyday people say is optimal (see the chart above). And there’s no magic formula here – economists disagree on what constitutes optimal wealth distribution, much less how to recalibrate.

We need more public engagement in policy making to generate citizen-driven solutions, and colleges and universities are ideally situated to host dialogue-to-action forums … so long as they are done right.  By “right,” we mean that the people most likely to be affected by a policy or action have a voice in the process (not just by attending a forum but by actually framing the topic, designing the forum, and implementing solutions), and that matters of political power, access, and privilege are specifically addressed in the process. This requires of level of intentionality perhaps not always front and center in community outreach initiatives. We know from NCoC’s September 2011 report on civic life in America that there are disparities in civic and political participation based on race, ethnicity, gender, educational attainment, and incomes levels. (For example, see Connecticut’s Civic Health Report released October 28, 2011.)  Colleges and universities need to mobilize their unique research and teaching resources and expertise to address the growing extremes in social, political, and economic inequality and to renew democratic vitality through public engagement and social inclusion.