America Unequal.

Author:Clark, Charles M.A.

The dramatic rise in income inequality in the 1980s in the United States is now an accepted fact. Starting in the early 1970s and accelerating in the 1980s, the rich have gotten richer and the poor have gotten poorer. At the same time, the political mood shifted toward assisting the wealthy (tax cuts for the rich under Reagan, current calls for capital gains taxes) and away from helping the poor. The recent Welfare Reform Bill (which would be called the Welfare Repeal Bill if truth in advertising laws applied to politics) is just one example of the meanness that has taken over public policy toward the poor. Work fare has become the big buzzword for social policy in America, as well as in Europe, with the essential idea being that the poor are poor because they are lazy. Conservatives often add that this laziness stems from generous social spending that stifles the poor's incentive to work and better their condition.

In their new book, America Unequal, Sheldon Danziger and Peter Gottschalk present a sobering analysis of the trends in poverty and income inequality. A central theme of their book is that one cannot, in good conscience, blame the poor for their increased misery. In the post-World War II era, economic growth and falling income inequality led to dramatic declines in the poverty rate, leading many to feel that the war on poverty could be won. Yet the situation since 1973 has changed significantly. The rate of economic growth declined, leading to stagnating living standards. Furthermore, income inequality began to rise, reversing the trends of the earlier period and by 1980 wiping out all of the gains in equality. The situation progressively deteriorated in the 1980s and the 1990s. As the authors clearly demonstrate, poverty has become immune from economic growth, as most of the gains in income go to the affluent.

Much of America Unequal asks why incomes have become more unequally distributed, focusing especially on earnings inequality. Danziger and Gottschalk depict earnings inequality as the result of blind economic forces, with no smoking guns or broad conspiracies (read public policies) to blame. The authors state that "there is now a great deal of agreement as to why inequality in earnings and family income increased. Most of the increase can be attributed to technological changes, the globalization of markets, and other structural changes in the economy that created more demand for higher-skilled relative to lower-skilled...

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