Obama said income inequality make it harder for a child to escape poverty. “That should offend all of us,” he said. “We are a better country than this.”
The dream of upward economic mobility is breaking down and that the growing income gap is a “defining challenge of out time,” Obama said.
“The basic bargain at the heart of our economy has frayed,” Obama said.
The president made his remarks at a nonprofit community center a short drive from the White House in one of the Washington’s most impoverished neighborhoods.
The president is right to highlight income inequality as a growing problem in America.
In the United States, a child born into the bottom 20 percent of income levels has less than a 5 percent chance of making it to the top income levels and is 10 times more likelier to stay where he is—worse than other industrial countries such as Canada, France and Germany.
The average American workers are working more, producing more but are not reaping the rewards of the increased productivity.
Corporate profits and the stock market are hitting records while the median household income of $51,000 is at its lowest since 1995. That’s good for upper-income people who are more likely to invest in stocks.
At the same time, some 54 percent of working-age Americans will experience near-poverty for portions of their lives, hurt by globalization and the loss of good-paying manufacturing jobs.
The Economic Policy Institute and the Center for Budget and Policy Priorities recently published a joint report which showed that the income inequality gap between those at the top, middle and bottom of the income scale “has grown significantly throughout the past two decades and remains higher than at any other time in the post-war era.”
Economic studies show that income inequality began to grow quickly in the 1980s. The income inequality gap is a result of set a of intentional policy decisions on trade, taxation and other economic policies by lawmakers and policymakers. Therefore a different set of policy decisions could reduce income inequality.
The president is right to identify rising income inequality as defining challenge of our time the question is what are we as a society going to do about it?
(Reprinted from the Philadelphia Tribune)
