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Katherine Dau

In “The Costs of Inequality: When a Fair Shake Isn’t” Alvin Powell outlines the issues with inequality and their causes. He describes in depth how only twenty percent of the population owns almost ninety percent of the nation’s wealth. This is because they possess capital that the bottom two fifths do not. The top group possess both physical and human capital. They have the education to give them the business prowess that they need. These men and women possess advanced degrees from top institutions like Harvard, Princeton, or Stanford. Meanwhile, the bottom two thirds is more likely to be getting by with a high school degree or maybe some community college. The discrepancy in human capital plays a major role in wealth inequality. Furthermore, the top twenty percent owns a great deal of physical capital, whether that be properties, cars, machinery, etc, while the bottom actually owns little to nothing. This is a major factor in wealth because real wages may not rise at the same rate as inflation. The value of capital rises at a much faster and steadier rate than wages do. Thus, those with capital can continue to save, invest, and get wealthier while those without are reduced to relying solely on income. Although not the only factor in inequality, Powell presents convincing evidence that this is a major factor. Macroeconomic policy can help to close this gap which has been widening in recent years. As Powell concludes, for the sake of democracy, we must take action.

Ian Gipson

Coming from a Catholic high-school, our religion classes spent a good amount of time discussing inequality as a factor of social injustice. This article addresses the same idea from a primarily economic view point. By examining not just the income distribution of American citizens but also the opportunity distribution, Powell takes a distinct perspective on the growing issue. He brings up factors like decreased union membership, race, education, health, and a decreasing real wage to help explain why the wealth inequality presents itself as a problem. However the most interesting part of the article is related to the search for a solution for the government. Economically, things like raising the minimum wage or changing tax policy are potential steps towards a solution, but as the comparison to Sweden showed, many people aren't on board to actually follow these plans. Whether it is due to distrust of the government or simply fear of a new policy, there exists a gap between thoughts and actions. As somebody who has traditionally believed in a conservative political philosophy, it is easy for me to understand this line of thought. However I can also recognize that the 'invisible hand' cannot prevent many market failures. In this case, the result of allowing the system to continue down the current path is hinted at by the Powell. It would lead to a system where workers decide they no longer want to work therefore collapsing the system by effectively eliminating the labor force. For my personal political views, the country is seemingly stuck between a rock and a hard place. I know that the government must intervene prior to anything extreme, but I also have reservations about trusting the government to find success in this endeavor.

Danielle Spickard

Alvin Powell’s article, “The Costs of Inequality: When a Fair Shake Isn’t,” discusses the rising level of inequality among the US. Real wages for most workers have remained relatively stagnant since the 1970s. However, real wages for the top 1 percent have increased 156 percent, while real wages for the top .1 percent have increased 362 percent. In 2014, the poorest 20 percent only received 3.6 percent of the national income, while the upper 20 percent received nearly half of the US income. The issue of inequality is definitely a popular topic right now in the political debate, and the issue of inequality has been present for some time. However, while the issue is very popular, there is hardly any mention of the causes of inequality, and most presidential candidates’ plans to fight inequality are shaky. While income is important, Picketty argues that wealth is critically important, as capital grows faster than the economy. Essentially, the more capital a person owns, the quicker the wealth will grow, as compared to wages alone. Many believe that the root of the cause lies in poverty and racism. Minorities face lower health and education levels, and thus do not possess human capital that can greatly increase their income—there is a link between where a child lives and that child’s success rate. Two suggested initiatives to solving the inequality issue were to raise the minimum wage and to change the tax policy. I thought the idea of raising the minimum wage was very interesting, as being from California, there has been a lot of discussion recently regarding California raising its minimum wage to $15 per hour by 2021. Having lived near LA and witnessing the severe homeless population and their struggles to afford many necessities, I’m hoping that a higher minimum wage benefits these people and helps reduce inequality. I’m curious to see the changes that a higher minimum wage has on California’s economy, and if other states follow suit in the future.

Jack Boyce

In the Harvard Gazette’s article “The costs of inequality: When a fair shake isn’t”, it discusses the economic cost of inequality in society. It shows the historical lead up to the era, and how income inequality began to be reinvigorated after the Great Depression. This article seems to blame these tendencies on the power and influence level a person has, as the top 20% of people have over 80% of the national wealth. I understand the concepts this article is trying to prove, but I do not necessarily believe what it is saying. Political and social power may influence certain aspects of the economy, but people come from all different types of background and the resources are available for the people in the lower 40% to rise up in society. Warren Buffett, one of the world’s wealthiest people, created his own path to success from the time he was a child, selling soda and newspaper and investing his money wisely. Mark Cuban, the owner of the Dallas Mavericks, created his own path to success as his parents were not wealthy and he went from being a bartender to starting his own company, selling it, and making wise investments and diversifying his wealth. I understand that there is inequality in society, as it has be ingrained in my mind through my Catholic school education, but government handouts and free passes do not encourage progression in society, but acceptance of the free help and the lack of desire to advance. I agree with Powell that inequality is a problem in society and society needs to take action, but in order to fix it, people need to get an education, work, and earn their money and not receive checks in the mail from the government.

Alex Shields

First of all, I am not sure whether the purpose of this article was to shed light on the inequality that exists in the United States or figuratively pat Harvard faculty on the back for the extensive work they have achieved in this field over the last 50 years (with surprisingly little impact according to the article).

But on the topic, there is obviously little doubt that a large amount of economic inequality can be found in the United States. Rather, the debate is found in how to handle the inequality that exists. The article quite obviously holds a more left-leaning argument in favor of increased taxes on the wealthy and expanded spending on social security. The other side of the argument calls for much less government intervention. Excessive welfare can prevent people from rising up on their own and contain them in a perpetuating cycle of poverty and excessive government oversight leads to inefficiency. Take the topic of education. The federal government aids in education spending but makes funding based off of educational benchmarks that encourage the same type of education in all public schools and therefore the same education for each individual student. On the contrary, if the education was handled only by state and local governments, they would be better able to allocate resources based on an individual school basis and institute viable educational standards to judge school's performances. In order to truly improve the inequality in this country, the government must carefully combine both conservative and liberal policies.

In the end, we must be very careful that any policies pursued do not backfire. In an effort to improve lower class wealth levels and opportunities, we must be incredibly cautious that a heavy handed government strategy doesn't stunt the American Dream in the process by preventing people from getting rich. After all, the essence of the American Dream is that you can become better off than the person next to you through hard work regardless of your individual background. If, however, we take away the ability to get rich, we lose the ultimate driving motivation behind the American Dream in the first place.

Tony Du

I thought the most interesting point that Powell brought up was that an inequality in wealth leads to an inequality in power, especially political power. This is especially true after Citizens United vs. FEC, where the Supreme Court ruled that monetary contributions to political campaigns are protected by the first amendment. I personally find the ruling absurd; Super PACs and the wealthy control politics. Representatives have no choice but to accept the influence of money.

Tony Du

For some reason the first part of my blog post was not submitted.

In his article, Powell discusses the repercussions of the rising income and wage gap. Powell mentions how wages for the majority of U.S. workers have not changed since the 1970s. On the other hand, the rich have only been getting richer, with the top percent experiencing a wage increase of 150-360 percent. However, wage isn't the only statistic measuring the growing inequality. The gap in wealth is also increasing at an alarming rate. Differences in both human and physical capital have created this dichotomous distribution. The wealthy are better educated and hold more resources and assets like real estate, stocks, and obviously money. According to Powell, one of the biggest problems stemming from this inequality is that opportunity has become so tied to money. In the so called land of opportunity, this unequal access to resources and education is both undemocratic and unethical.
I thought the most interesting point that Powell brought up was that an inequality in wealth leads to an inequality in power, especially political power. This is especially true after Citizens United vs. FEC, where the Supreme Court ruled that monetary contributions to political campaigns are protected by the first amendment. I personally find the ruling absurd; Super PACs and the wealthy control politics. Representatives have no choice but to accept the influence of money.


This article, "The costs of inequality: When a fair shake isn’t", scribed by Mr. Alvin Powell is an interesting synopsis of Harvard investigations into American inequality. Powell first stuns his audience with an animated graphic highlighting the astronomical imbalance in wealth distribution in the US, the conclusion of which is, of course, that the bottom 20% of Americans are actually so in debt that they make up a negative percentage of the nation's wealth. Partly, Powell ascribes this to the immobility of the wages for the middle and lower class over the past 50 years: While the rich continue to earn increasingly more each year, the poor earn steady wages. He partly attributes this "poverty, exacerbated by racism" on political choices made in the conservative ages of the 1980s, when tax cuts intended to shrink government favored big businesses. This is further illustrated in the quote "...there exists an almost ironclad link between a child’s ZIP code and her chances of success."
Another interesting fact Powell highlights comes from the research of Professor Michael Norton: Given the choice, most Americans would choose the income distribution of Sweden over the current American inequity. Powell continues citing Norton and Dean James Ryan who suggest that much of this inequity results from educational imbalance in minority groups. A hypothesis that is backed by statistical data from NCES and NEAP.
This article holds value in that it draws attention to the inconsolable inequity in America. Some would of course argue that America is the land of the free, and as such, everyone is free to make their own way. Unfortunately, though, there is such a difficult maze of bureaucracy and as Powell comments, wealth is power. As a college student with little significance other than having the privilege of being raised in a good home, I now find myself dropped into a world where I have to choose between the American freedom to do what I want, and the knowledge that what I want may not get me the wealth to give my child the same life I had. If I don't somehow catapult myself into the top 20-40% I can easily see my future family suffering the inequality of a uniquely American social stratification.

Devin Kearns

The most impactful part of this article was the recognition that the top percent of the population not only have a majority of the money, but the power as well. Tony brought up the Citizens United case in an earlier comment and I wanted to hit on that as well. Unlike Tony, I agree with the ruling of the Citizens United case, to an extent. If the economic opportunity of all citizens was more equal than it is today, then the case would not have received as much flack as it did. It should be your right to contribute to a campaign with as much cash as you wanted. The problem is, the people who have the cash to make huge waves in the political arena had a higher chance of being financially successful than people who did not have the advantages they had. This is the underlying problem with the case. Because the income market is unequal, the ruling seems unfair but if the income market was equal, the ruling would seem more fair.

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