by Scott Winship
e21 – Economic Policies for the 21st Century
January 24, 2014
With long-term unemployment historically high and still-pervasive economic insecurity, it is understandable that many Americans have grown concerned about the nation’s levels of inequality. At the same time, it is the fragility of the economy that lies behind concerns over inequality. In long-run perspective, living standards have improved for the poor and middle class even as income inequality has grown. Furthermore, there is little compelling evidence that the gains at the top have reduced income growth lower down. And contrary to claims that rising income inequality has hurt inequality of opportunity, the evidence of a link between the two is weak. Rather than attacking income inequality, promoting economic growth and reducing joblessness should be at the top of our list of immediate priorities. The real challenge is to identify solutions to the problem of limited upward mobility.