This document discusses wealth and income inequality in the United States. It outlines how inequality has risen significantly since the 1970s due to policy shifts that weakened labor unions and decreased the minimum wage. This level of inequality negatively impacts society by worsening health and social problems. The document proposes several policy interventions to reduce inequality, such as increasing the minimum wage, strengthening unions, reforming trade and financial regulations, and expanding access to education and welfare programs. If successful, these policies could boost employment and mobility while decreasing poverty and inequality long-term.

1. Wealth & Income Equality:
Injustice for all
University of Buffalo
Brandy Loveland

2. The Problem: Wealth & Income Inequality
Economic Inequality is the highest that is has been since 1928.
 Income inequality refers to the extent to which income is distributed in an uneven
manner among a population and is defined as the gap between the rich and the remainder
of society. (inequality.org).
Politizane (2012, November 20). Wealth Inequality in America. Retrieved from https://www.youtube.com/watch?v=QPKKQnijnsM

3. The Problem: Wealth & Income Inequality
Women and men are making
less today than in 1999,
after inflation. The median
family income has also
significantly decreased
since then. (Sanders,2015)
*See where you
stand at inequality.is
Sanders, B. (2015). Bernie Sanders on Economic Inequality. Retrieved from http://feelthebern.org/bernie-sanders-on-economic-inequality/

4. How did this happen?
1979
Prior to 1979, worker compensation and productivity rose at the same
rate. After 1979, compensation began to increasingly lag as
productivity rose.
Mishel, L., Bivens, J., Gould, E. & Shierholz, H. (2012). The State of Working America: An Economic Policy Institute Book. Ithica: Cornell University Press
Bureau of Labor Statistics (2015). Current population ongoing rotation group microdata [machine readable microdata file]. Washington, D.C. : U.S. Census Bureau

5. How did this happen?
Labor movement
1930’s-1950’s
Civil Rights Movement
1950’s-1960’s
Women’s Movement
1960’s-1970’s
Environmental Movement
1960’s-1970’s
Consumer Movement
1960-1970’s
Led Corporations from 1930-1970’s to:
 Increase wage and benefits for union and non union
workers
 Prohibit companies from paying women and minorities
less than white men
 Constrain U.S. businesses that endanger the
environment and consumers
 Prohibited market discrimination
 Ensured consumer product safety
 Guaranteed workers health and safety
 Made union creation easier
 This ultimately narrowed the wage gap (Schmitt, 2009)

6. How did this happen?
But in the late 1970’s policy decisions on the following issues shifted economic power away
from the low and the middle class.

7. How did this happen?
 Two oil
crises of
the 1970’s
 Political shift
towards employer
interests
 Corporate
Backlash
 Economic
crisis of
the 1970’s
Policy Initiatives
Objective: “Increase Efficiency”
 Inflation-adjusted value of
minimum wage
 Deregulation of airline,
trucking, railway,
financial and
telecommunications
industries
 Liberalization of foreign
trade through trade
agreements (globalization)
 Privatization of federal,
local, and state government
functions (ie. Welfare
policies)
 The U.S. war in Iraq
and Afghanistan
 Policies that enabled
the deterioration of
unionization in the
private sector
(Schmitt, 2009)

8. How did this happen?
As a result, in the United States, wealth and income inequality ,has been
growing markedly, by every major statistical measure, for some 30 years. In
Fact, the U.S. has the highest inequality of all developed countries, only
above Turkey, Mexico, and Chile.
OECD (2015), Income inequality (indicator). doi: 10.1787/459aa7f1-en (Accessed on 15 October 2015)

9. Why does this matter?
Research has proven that income inequality is correlated with health
and social problems…
Wilkinson, R & Pickett, K. (2011). Greater quality: The hidden key to better health and higher scores.
American Educator, Spring, 5-9

10. Why does this matter?
Recently, President Obama stated income inequality as the “defining challenge of our
time” and social patterns that contribute to a decline in mobility is now everywhere.

11. Why does this matter?
Even though research suggests that economic inequality may pose a threat to societal
well being…
*71% of Americans feel that the poor can escape poverty, due to their faith in the “American
Dream (Davidai & Gilovich, 2015). Also many politicians, especially Republican politicians, back
this idea.
"There is income inequality in
America.There always has been
and hopefully, and I do say that,
there always will be. "Why? Because
people rise to different levels of
success based on what they
contribute to society and to the
marketplace, and that's as it should
be.“- Senator Rick Santorum (Ellyat,
2013)

12. Why does this matter?
Many also believe in “Trickle Down
Economics” or “Supply Side Economics,” a
theory made popular in the 1980’s during
President Regan’s term in office, that has
been used for over three decades. This theory
states that if enough money is given to the
rich, some with will trickle down to the poor.
This form of economics, however, not only
has contributed to inequality, but economic
inefficiency, and reduced growth and stability
(Howell, 2013).

13. Why does this matter?
In the Congressional Budget Office Long-Term 2013 report, if wealth and income inequality
continues, top 10% percentile will see a $63,000 increase in wealth, while the 90% will see a
$18,000 decrease by 2035 (Schwabish &Topoleski, 2013).
Schwabish & Topoleski. (2013). Modeling Individual Earnings in CBO’s Long-Term Microsimulation Model. (June). Washington, D.C.

14. Why does this matter?
This increase in inequality will bring several moreAmericans below poverty level and lead to
increasing social concerns across the county, and causing adverse bio-psycho-social effects.

15. Attempts to Battle Inequality
On June 4, 1963, President Kennedy signed Executive Order 11110
that would return power to the U.S. government to issue currency
without going through the Federal Reserve, which is a private
entity. This would have allowed the country to pay off it’s
national debt, which would have:
 Lowered Cost of Living
 Increased wage growth
 Helped to prevent generational
inequality
 Prevented fiscal crisis (Peters &
Woodley ,1963)
He was assassinated five months later and the
4.3 billion in government bills were destroyed
when Lyndon Johnson came into office. The
order is still valid, but no other President has
used the order since.

16. Attempts to Battle Inequality
Several movements and advocacy groups, like Wealth for the Common Good, have
also been created since to fight inequality in the United States, but none
have been as effective or as visible as the following:
Kshama Sawant, Socialist Member of the
Seattle City Council, started the Now 15
Coalition, which has won a $15.oo minimum
wage in Seattle and sparked the current
National Fight for $15 movement (Abramsky,
2014). It also appears to be shaping the 2016
election and influencing major retailers like
Gap, who raised their minimum wage last year.
Occupy started in 2011 as a
movement protesting capitalism,
and became a movement to fight
societal structures, especially
wealth and income inequality
(Pickerill & Krinsky, 2012). It has
since disbanded, but shaped the
2012 presidential election and
made visible the United State’s
inequality to the world. It also demystified the
notion that the poor choose to be poor and brought
to light societal barriers.

17. Attempts to Battle Inequality
Also, in his 2015 State of the Union Address, President Obama, due to
the seriousness of economic equality, called for Congress to “make
community college free for most students, enhance tax credits for
education and child care, and impose new taxes and fees on high-
income earners and large financial institutions (Spear & Davis,
January 20, 2015).”
“Will we accept an economy where
only a few of us do
spectacularly well? Or will we
commit ourselves to an economy
that generates rising incomes
and chances for everyone who
makes the effort?”- President
Barack Obama (State of the
Union, 2015)

18. Policy Interventions
This Policy Intervention would work to do the following:
 Build Social and Human Capital
 Increase Economic Security
 Build Income
By Tackling the Following:
 Change Global Trade Agreements
and Change Labor Standards
 Change Wage Standards and
Increase Income
 Create A Proactive Welfare State
 Restructure Financial Regulation
 Education Reform
 Job Creation

19. Policy Interventions
Trade Policies and Labor Standards:
Policies, such as the North American Free Trade Agreement
(NAFTA), allowed companies to outsource factory production
to other countries, causing the loss of several jobs
(Armenter, 2015). New policies should be made, and old
amended, to address unequal levels of development,
enforcement of labor rights (especially the right to
unionize), and environmental standards (Scott, 2003) Also,
incentives should be given to employers who invest in free
skills that promote worker upward mobility (OECD, 2014).
Change Wage Standards and Increase Income:
Currently the national minimum wage is $7.25/hour
(DOL,2015). This is not a livable wage. Furthermore,
gender inequality still exists in the work sector, with
women making $0.78 to every dollar at man makes. The
national minimum wage should be at least $15.00/hour and
be adjusted regionally, by a formula based on average cost
of living in that area. Also all genders should receive
equal pay.

20. Policy Interventions
Create a Proactive Welfare State:
Shift saving incentives from tax policies to refundable tax credits
to provide equal benefits and enhance Earned Income Tax Credits
(HAAS Institute,2014). Trade policies, ie. Unemployment Insurance,
needs to be more accessible (OECD, 2014). Reactive and flawed
welfare services for the poor, ie. Welfare to Work, have
contributed to the amount of people in the safety net (Kreifall &
Dunlea, 2011). These policies need to be proactive. Government
needs to shift from the privatization on local and state government
functions. Policies need to provide wide and equal access to
high-quality public services, and jail reform.
Financial Regulation:
The deregulation of banks allowed banks ultimately led to them taking
risks that brought about the 2008 Emergency Economic Stabilization
Act, where the American taypayers bailed out the banks. Executive
Order 11110 needs to be enacted and banks need to be regulated to
prevent the possibility of future bailouts.

21. Policy Interventions
Education Reform
According to Arne Duncan, Secretary of Education, better
education is essential as it will provide disadvantage
students the tools to increase future incomes and increase
social mobility (OECD, 2014). Comprehensive reform should be
created to promote the teaching field, restructure schools,
provide college accessibility and invest in early childhood.
Training programs should also be offered as an alternative to
college (Heckman, 2000). It should also be structured
eliminate the school to prison pipeline.
Job Creation
Investing in Infrastructure could be used as a job creation
tool and could create 18,000 jobs for every $1 billion in
new investment spending, through the construction and
manufacturing sector (Heints, Pollin, & Garrett-Pettier,
2009).

22. Possible Opposing Arguments
 Some may consider that it will cost too much
 Providing these options will be seen an “handout” at the tax
payer’s expense
 This would be considered a very leftist, socialist approach.
 Will lose corporations as they will move to other countries
for cheaper labor
 Politicians will not agree to this plan
 Corporate Backlash will occur again
 Many argue that some people, especially those that work in
service fields or who receive public assistance, do not
deserve $15.00 minimum wage

23. Implications and Communication
The solution would be implemented in the next three to five years through
Congress and the President of the United States., who would need to
approve of the aforementioned policy creation and reform. The process to
reach the solution will take longer. Below are the key steps for this.
Key Steps:
 Partnering with coalitions to
collaborate and organize a movement for
addressing the issue
 Meeting with local leaders, businesses,
unions, and organizations for support
 Educating the community on the severity
of the issue
 Including community response and input
in plan creation
 Creation and delegations of committees
for tasks (i.e. writing letters to the
editor, media communications)
 Lobbying politicians for support
 Policy Drafting
Timeframes:
 Partnering and collaboration
should be implemented in the
first six months.
 Community education and
meetings should be an ongoing
process
 Plan creation should occur
within the first six months, as
well as committee creation
 Committee task should begin one
month after creation
 Policy Drafting should be
discussed in the first ten
months

24. Outcome
If this plan is successful, here are a few outcomes the United States would see:
 A decrease in people in the safety net
 An increase in employment
 A larger population that is able to save and invest
 Less criminal recidivism
 Increased benefits and rights for union and non union employees
 Better working conditions and pay
 Improved neighborhood conditions
 Less infant mortality due to better maternity/paternity leave policies
 More economic mobility
 Less child poverty and homelessness
 A dramatic decrease in wealth and economic equality
 An increase in trust in government

25. References
Abramsky, S. ( April 28, 2014). Fearless in Seattle.The Nation. Retrieved from http://www.thenation.com/article/what-if-minimum-wage-were-15-hour/
Armenter, R. (2015). A bit of a miracle no more:The decline of the labor share [Business Review]. Philadelphia Federal Reserve. Philadelphia
Bureau of Labor Statistics (2015). Current population ongoing rotation group microdata [machine readable microdata file].Washington, D.C. : U.S.Census Bureau
Davidai S. & Gilovich,T. (2015). Building a mobileAmerica-One income quintile at a time. Perspectives on Psychological Science, 10 (1), 60-71. DOI:10.1177/1745691614562005
Ellyatt, H. (8 Jan, 2013). Income Inequality: Is It Good For Everyone?. CNBC News. Retrieved from http://www.cnbc.com/id/100361302
Haas Institute. (2014). Responding to rising inequality: Policy interventions to ensure opportunity for all [Policy Brief]. Haas Institute for Fair and Inclusive Society. Berkley
Heckman, J. (2000). Policies to foster human capital. Research in Economics, 54, 3-56. Doi: 10.1006/reec.1999.0225
Heints, J. , Pollin, R., , & Garrett-Pettier, H. (2009). How Infrastructure Investments Support the U.S. Economy: Employment, Productivity, and Growth. Political Economy Research
Institiute. Massachusetts
Howell, D. (2013)The greatAmerican laissez-faire experiment: Post-1980 inequality and growth in international perspective. Center for American Progress.Washington, D.C.
Inequality.us (2015). Economic inequality definition. Retrieved from http://inequality.is/real
Kriefall,A. & Dunlea, M. (2011). Making new roads fromWelfare toWork: Ramping up unsubsidized employment and community jobs programs in NewYork State. Hunger Action Network
of NewYork State. Albany
Linden, M. (2012).The federal tax code and income inequality: How federal tax policy changes have affected and will affect income inequality. Center for American Progress. Washington,
D.C.
Mishel, L., Bivens, J., Gould, E. & Shierholz, H. (2012). The State ofWorking America: An Economic Policy Institute Book. Ithaca:Cornell University Press
OECD (2015), Income inequality (indicator). doi: 10.1787/459aa7f1-en (Accessed on 15 October 2015)

26. References
OECD. (2014). United States:Tackling high inequalities creating opportunities for all. Paris: OCED Publishing
Peters, G. &Woolley, J. (2015). John F. Kennedy: "Executive Order 11110 -Amendment of Executive Order No. 10289 as Amended, Relating to the Performance of Certain Functions
Affecting the Department of theTreasury," June 4, 1963. The American Presidency Project. Retrieved from http://www.presidency.ucsb.edu/ws/?pid=59049
Pickerill, J. & Krinsky, J. (2012).Why does occupy matter? Social Movement Studies, (11) 3-4, 279-287
Politizane (2012, November 20).Wealth Inequality in America. Retrieved from https://www.youtube.com/watch?v=QPKKQnijnsM
Sanders, B. (2015). Bernie Sanders on Economic Inequality. Retrieved from http://feelthebern.org/bernie-sanders-on-economic-inequality/
Schwabish &Topoleski. (2013). Modeling Individual Earnings in CBO’s Long-Term Microsimulation Model. (June). Washington, D.C.
Schmitt, J. (2009). Inequality as policy:The United States since 1979. Center for Economic and Policy Research.Washington, D.C.
Scott, R. (2003).The high price of ‘free’ trade: NAFTA’s failure has cost the United States jobs across the nation. Economic Policy Institute [Briefing Paper}Washington
Spear & Davis, January 20, 2015 . In the State of the Union, Obama Sets an AmbitiousAgenda. NewYorkTimes. Retrieved from http://www.nytimes.com/2015/01/21/us/state-of-the-union-
obama-ambitious-agenda-to-help-middle-class.html?_r=0
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address.html?action=click&contentCollection=U.S.&module=RelatedCoverage&region=Marginalia&pgtype=article
United States Department of Labor. (2015).Wages: Minimum wage. Retrieved from http://www.dol.gov/dol/topic/wages/minimumwage.htm
Wilkinson, R & Pickett, K. (2011). Greater quality:The hidden key to better health and higher scores. American Educator, Spring, 5-9