Inequality in America: Where Do We Stand?

Abstract

Gary Burtless, a senior fellow in the Economic Studies program at Brookings, has been an economist with the Department of Labor and the Department of Health, Education, and Welfare. His most recent publication is Work, Health and Income Among the Elderly, which he edited. CONOMIC INEQUALITY is once again news. Politicians, news paper columnists, and ordinary citizens worry that the middle class is shrinking. They wonder at a reported surge in wealth among the nation's well-to-do. And they are shocked by vivid portrayals in the mass media of impoverished children, teenaged parents, and homeless adults. The Catholic bishops' pastoral letter on the U.S. economy, published last November, also raised public consciousness of inequality. The bishops insisted that the affluent majority has a moral obligation to aid the poor, through public programs as well as through private charity. By emphasizing the need for reform in American economic institutions and policies, the bishops fueled the debate, both within and outside the Catholic church, that pits those who strongly believe in the need for government action in behalf of the poor against those who argue that government action is either unnecessary or counterproductive. This essay considers two central aspects of that debate. First, how can we judge the degree of poverty and economic inequality in the United States? What standard is appropriate in determining whether inequality is high or low? Second, can the nation afford to do any more to reduce existing inequality? Or will our added efforts be ineffective, as most critics of government programs contend?