Americans want the government to fight inequality and raise the minimum wage

Posted by AzblueMeanie:

This should make Bob Lord happy — Greg Sargent writes, Democrats should prioritize combatting inequality. It’s popular.

Do Americans favor government intervention in the economy, and do they recoil at class based appeals?

A new poll sheds some interesting light on these questions, which are at the center of the debate over the degree to which Democrats should emphasize the need to combat inequality as a defining issue of the party and of our time.

Short version: While generic “government” still polls badly, the notion that government should act to combat inequality is popular, even among independents and moderates — and particularly among core Democratic voter groups.

The new Washington Post/ABC News poll finds that a sizable majority of Americans, 57 percent, believes that “the federal government should pursue policies that try to reduce the gap between wealthy and less well-off Americans.” Only 37 percent oppose.

Only Republicans and conservatives believe government should not act to reduce inequality, but even among them the numbers are surprising. Independents favor government action by 58-37. and moderates favor it by 62-34. Among Republicans the numbers are 40-54, and among conservatives they are 45-48.

Crucially, core Dem subgroups that make up the “Coalition of the Ascendantoverwhelmingly favor combatting inequality. Liberals: 79-17. People under 40: 66-31. Non-whites: 67-23. Women: 59-35. College educated whites: 51-46. This suggests Dem lawmakers and candidates will probably have to make fighting inequality a top priority.

The poll suggests a populist emphasis could help with downscale whites — who are less important to the Dem coalition but should not be given up upon by Dems — since they favor combatting inequality by 55-41.

There’s a nuance in the polling worth noting, one centered on question wording. Republicans hold a 48-40 advantage over Obama on who has the right balance on “government spending,” and the two parties are tied on who is right about the proper “size and role of the federal government.”

But what this really suggests is that “government” and “spending” poll badly, and when you introduce combatting inequality into the mix, suddenly opinion changes. Indeed, though it’s often said Americans reject “class warfare,” individual government policies to fight inequality — higher taxes on the rich, strengthening the safety net, funding for education, infrastructure spending to create jobs, hiking the minimum wage — are broadly popular. Also, as Paul Krugman and Alec MacGillis argue, treating inequality as a central challenge is the right thing to do.

The new Post/ABC News poll also finds that Americans overwhelmingly favor raising the minimum wage, by 66-31. Among independents: 65-34. Among moderates: 71-27 Even Republicans support it by 50-45, and conservatives by 53-34.

Observers keep pointing out that Dems are emphasizing the minimum wage hike to win over non-college whites, and as it turns out, they favor it by an overwhelming 66-32.

As Laura Clawson at Daily Kos notes, the banksters of Wall Street at the corporate Dem front group "Third Way may say that economic populism is a no-good, bad, terrible idea, but the Wall Street influence group isn't in tune with mainstream Democratic voters, or even with independents. Poll: Americans want the government to fight inequality.

Ezra Klein has been making the equally valid point that Full employment, not inequality, should be the top economic priority, but I believe this is two sides of the same coin:

My Friday column arguing that inequality shouldn’t be elevated to “the defining challenge of our time” — or even the defining economic challenge of our time — has elicited a lot of really interesting responses. See Brad DeLong, Jared Bernstein, Paul Krugman, Larry Mishel, Ashok Rao, Matt Yglesias and Dean Baker, to start. I’ll add a few points.

1) It’s perhaps useful to begin with what I was not saying. I’m not saying inequality isn’t a serious problem. I’m not saying declining social mobility isn’t a serious problem. I’m not saying that the difficulty of finding firm evidence that inequality impedes growth means that inequality doesn’t impede growth. The column is about whether inequality should be seen as the central economic problem of our age. Amidst mass joblessness and weak growth, I’m skeptical.

2) Obviously this whole conversation is moot if inequality is a primary reason for mass joblessness and weak growth. I don’t find the evidence on that score hugely compelling. We've had nearly full employment during periods of high inequality (say, 2005) and we've had high unemployment during periods of relative equality (say, 1982). The same is true internationally: Some relatively equal countries suffer from extremely high unemployment (Portugal, for instance) while some relatively unequal countries are seeing fast growth and low unemployment (Singapore, say). But Dean Baker at the Center for Economic and Policy Research find this argument more persuasive, and you should read his case.

3) I’m quite convinced, however, that joblessness makes inequality much worse. As former White House economist Jared Bernstein writes, “Over the period when labor markets were tight 2/3′s of the time, incomes grew together. Over the period when labor markets were tight 1/3 of the time, they grew apart." Here's the graph:

Incomes-and-inequality-800x449

“Full employment”, I think, probably is the correct rallying cry for this age, and Baker and Bernstein’s free e-book on the topic is something you should read right now. While there are ways to reduce inequality without doing much about employment (say, by taxing the rich and using the proceeds on defense spending), it's hard to imagine full employment not doing much to reduce inequality.

4) Basically everything I just wrote about full employment applies to median wage stagnation, too. I'm not convinced that the top one percent's acceleration is the same problem as the stagnation of median income. For one thing, median wage stagnation began in the '70s, while the top one percent only began pulling away in the mid-'80s. So it's easy to imagine policies that could "solve" inequality while doing little for median wages. By contrast, I'm much more convinced that median wage stagnation is connected to slack labor markets, and it's really hard to imagine full employment not boosting median wages.

5) A hypothesis of the column is that worrying about inequality and social mobility is politically easier than worrying about mass joblessness. Inequality at levels we’re seeing today is morally offensive. Declining social mobility is the kind of thing that hedge fund managers feel good worrying about. If that’s right, it creates a political bias toward too much concern over inequality, much as there’s a political bias toward too much concern over the deficit.

6) In this way, my argument is the direct opposite of Third Way’s argument: They think the problem with worrying about inequality is that “nothing would be more disastrous for Democrats.” They’d prefer more focus on the deficit. But inequality is great politics — as you can tell by the number of politicians taking up the banner — and making the deficit your central worry right now is absolutely nuts. (For more on this, read Neera Tanden at New Republic.)

7) Anecdotally, I find that people in politics simply find joblessness, at this point, frustrating and sad. They want to move on from it because they don’t see worrying about it further to be either politically advantageous or obviously productive. Most voters are employed, and there aren’t the votes to do something new about joblessness anyway.

8) Since new measures to combat joblessness or inequality are similarly implausible, it’s fair to ask why this conversation matters at all. One answer I proposed is that it focuses intellectual resources on one problem rather than the other. Krugman replies, “We know how to fight unemployment — not perfectly, but good old basic macroeconomics has worked very well since 2008…The causes of soaring inequality, on the other hand, are more mysterious; so are the channels through which we might reverse this trend.” That’s a good point. In particular, there should be a lot more research on the possible connection between inequality and financial crises.

9) A second point Krugman makes (and that’s also been made by political scientists Jacob Hacker and Paul Pierson) is that inequality is a driving force in our politics, and as such, is a key impediment to better economic policymaking more broadly. On this, I'm more skeptical. The last five years have seen the passage of, among other things, a universal health-care bill that funds itself in large measure by taxing the rich — higher marginal tax rates on the rich, massive expansions and extensions of progressive elements of the tax code, the reelection of the political candidate promising higher taxes on the rich, and so on. Today's tax code might well be the most progressive since 1979. Inequality was lower in the 1980s, but policymaking was much more regressive.

10) That said, worrying about political inequality leads you to different policy emphases than worrying about income inequality. In particular, massive campaign-finance reform should probably be the top priority if you're worried about wealthy individuals and corporations buying off our politics. That's not the direction this conversation seems to be going in here in Washington, though.

11) Within the general rubric of "inequality," income inequality gets a whole lot more attention than wealth inequality. But wealth inequality is much more concentrated and, in various ways, much more dangerous for the social structure. In particular, it's wealth inequality that really ossifies social mobility.

The children of the top one percent only occasionally manage to match their parent's incomes. But they often receive massive inheritances that grow over time, installing them atop the economic ladder and giving them a political reason to fight like hell against progressive tax policies (the Walton family is a good example here). And this kind of inequality doesn't have any of the salutary benefits of income inequality: Massive inheritances don't make people work harder. They give them a reason to never work very hard at all, and to try to influence public policy so they never have to work hard in the future, either.

Wealth-vs-income-inequality

12) All that said, income inequality and social mobility really are startling trends that people should be very worried about and that the political system should be working aggressively to solve, or at least ameliorate. I don't have many policy disagreements with the folks focusing on inequality. But politics is about prioritization, and what politicians end up doing is in part driven by what problems their political coalitions are most worried about. Next time someone like Jared Bernstein is advising the president of the United States about what her top economic priority should be I'd prefer if the answer was full employment rather than inequality, and I'd prefer if her political advisers agreed.

The reality, Ezra, is that economic policies which create jobs are difficult to enact right now when we have a political party in control that is devoted to the disproved and discredited faith based "trickle-down" economic theory and the Hooverism of austerity economics. The GOP blames the poor and the working poor for their lot in life and does not concede the failure of its economic theories, which is the true source of our economic stagnation and inequality. People respond emotionally to what they perceive as the unfairness of inequality — it motivates them to turn out to vote. First we have to remove the economic ignoramuses from office, and then we can enact economic policies which create jobs. We all want the same thing, it is just a question of political tactics.

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