New Study Finds That More Equal Communities Are Better For Everyone

The Next Systems Project recently released a study that analyzed growing inequality in the US economy and provided ideas to reverse the trend. This article reviews the basic points made by the researchers. The study analyzed the trends in growing inequality, highlighted causes, and identified solutions. The researchers found that, “Imbalances of power and agency embedded in our political and economic system are the main drivers and accelerators of inequality.” In other words inequality is high in America right now because so many people are politically disenfranchised and have little power over their livelihoods.

The study recommends four policy routes to address growing inequality. Lift the living standards of those at the bottom of the social hierarchy, provide the general population with access to developmental needs and democratic representation, deconcentrating wealth, and rewiring the economy to meet the needs of the people.

 

The Problems (In Short)

These policy prescriptions are in response to significant trends in the growth of inequality. The statistics boosting the policy prescriptions include wide disparities in income gains between the top one percent and the bottom 50 percent of wage earners in the last half-century, an increased wealth disparity between white families and families of color in the recovery from the 2008 financial crisis, and higher rates of negative net worth or people who, “owe more than they own”. These factors are just some of the indicators that illustrate the growth of inequality in this country.

The first section of the study looked at the data of what inequality in America looks like. The second section of the study reviewed research on how inequality affects people. It found that it has effects one would expect such as worse health outcomes for the less well-off, political disenfranchisement, and increased structural economic instability. One of the more surprising findings of the study came from The Spirit Level: Why Greater Equality Makes Societies Stronger. In their book Richard Wilkinson and Kate Pickett documented that, “The more unequal a community, the greater the incidence of heart disease, asthma, mental illness, cancer, and other morbid illnesses.” People in communities with higher inequality have worse health outcomes independent of their social and financial status.

Political cartoon about generational wealth

The Policy Prescriptions

By reducing inequality, according to the Next Systems Project, society could become healthier, more connected, better educated, and actually Democratic. This sounds like Utopian thinking but, in the context of this study, there is research validating these optimistic conclusions.

To achieve these egalitarian goals in policy the researchers began with the question, How do we achieve a less unequal society? They then fleshed out their suggested policy prescriptions.

The first two categories of policy would make a higher standard of living and economic prosperity more accessible to those who have been historically disenfranchised.  

Policies that, “Lift the floor”, reduce poverty and establish a minimal standard of material security for everybody. Relevant policies include a living wage, universal health care, labor protections, universal education, jobs retraining programs, a universal basic income, and stronger welfare protections. They are policies which improve the lives of all of the people in the society, regardless of wealth.

Policies that, “Level the playing field”, address the fact that the rich have structural advantages to the poor in our society because they have access to education and preferential tax policies. The policies recommended for this goal include investing in education, reducing the influence of big-money donors in our political system, removing pro-rich loopholes from the tax code, and confronting tax-havens.

The third category of policies were intended to, “Deconcentrate wealth”. They confront the concentration of wealth in the hands of individual Oligarchs and in Corporate profits. These goals would be attained, according to the researchers, by raising the tax burden on the mega-rich, eliminating tax loopholes and offshore tax-havens that help Corporations and people with high incomes evade their responsibilities, regulating the growing ratios of CEO compensation to the average pay of their employees, and addressing Corporate incentives to pay their CEOs massive salaries and bonuses.

The final category is the most proactive and aspirational, “Rewiring the Next System”, or building new economic systems that work for all Americans. The changes they proposed focused on transforming the Corporate model to include broader worker- and consumer-ownership, institutional accountability and social responsibility, and a return to banking models that put the community before profits. This section reads like Progressive fanfiction as it suggests breaking up too-big-to-fail banks and encouraging participatory work environments. This is also the section that calls for banning Corporate influence on our Democracy.

 

These general routes for achieving a more equal society, alongside the reasoning for why this would benefit all of us, is inspiring for many reasons. The study was published with examples of groups who are successfully performing the actions it recommended. It is proof that there are social scientists who take the issue of inequality as seriously as the Leftist agitators in the streets. And it uses the rhetoric I am so used to from Leftist circles in context with scientific research. I chose to share this study with my readers because the information in it puts a reasonable, research-heavy lens on the road to a better future for my human family. Follow this link for a more in-depth look at Reversing Inequality: Unleashing the Transformative Potential of an Equitable Economy.        

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