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Eco-Justice Notes
The E-mail Commentary from Eco-Justice Ministries

The Crisis of Economic Inequality
distributed 1/25/19 - ©2019

Five weeks into the absurd partial US government shutdown, the stories we're hearing about unpaid federal workers pushed into economic crisis are becoming more urgent, frustrating and heartbreaking. Ripple effects spread that crisis into the families of contract workers, and of businesses that normally serve those who have been shut down.

Through these weeks, we're finally acknowledging a large slice of the US population. These are good people, responsible workers, who live paycheck to paycheck. Today, with a second check not arriving, the levels of anxiety and desperation rise sharply.

The shutdown brings a longstanding reality into the daily newsfeeds. In this rich nation, half of all families live on the edge. They don't have adequate savings to cover being furloughed, or having to work without pay for over a month, or dealing with some other unexpected expense. Pervasive patterns of income inequality lock families out of prosperity, and diminish the quality of life for all of us.

Today, I'll explore the social justice implications of US income inequality from a global perspective. Next week, I plan to look into the somewhat surprising ecological repercussions of that inequality.

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The US has the highest levels of economic inequality among developed countries -- and it is getting worse. Joseph Stiglitz -- writing the lead article in a November, 2018 Scientific American report on "The Science of Inequality" -- highlighted one of the most dramatic details from the most recent 40 years.

Whereas the income share of the top 0.1 percent has more than quadrupled and that of the top 1 percent has almost doubled, that of the bottom 90 percent has declined. ... In fact, for those with high school education or less, incomes have fallen over recent decades.

Stiglitz identifies many interlocking factors that cause such inequality: the shift from manufacturing to a service-based economy; attacks on unions (now representing only about 11% of US workers); weak corporate governance that allows obscene levels of compensation for executives (CEOs earning 361 times as much as average workers); and tax policies that favor the rich. He writes of a feedback loop, where economic inequality leads to political inequality, allowing those with wealth to increase their advantages.

While those with wealth tend to find advantage in their wildly disproportionate share, global research suggests that the US economy as a whole is damaged by this state of affairs: "economies with greater equality perform better, with higher growth, better average standards of living and greater stability." The trend toward greater inequality degrades our national health and prosperity.

Robert Sapolsky, writing about "The Health-Wealth Gap" in the same SciAm report, shows that inequality -- not just poverty -- has terrible social and health implications. (Sapolsky's article is not available on-line without charge. Find it at your local library!)

While poverty is bad for your health, poverty amid plenty -- inequality -- can be worse by just about any measure: infant mortality, overall life expectancy, obesity, murder rates, and more. Health is particularly corroded by your nose constantly being rubbed in what you do not have.

Inequality also affects the rich, in what one economist calls the "secession of the wealthy," as they try to insulate themselves from the stresses of such a divided society. "They spend more of their own resources on gated communities, private schools, bottled water and expensive organic food. And they give lots of money to politicians who will help them maintain their status."

Such a highly unequal and sharply divided society leads to a breakdown of trust, and diminished social cohesion. When many people have given up hope, there's also a rising number of "deaths by despair" related to alcoholism, drug overdoses and suicides.

Economic inequality creates countless personal tragedies, and it reveals the presence of societal injustice. An ethical perspective that gives any attention at all to a "preferential option for the poor" should be unwilling to accept such a situation. Indeed, in Laudato Si', Pope Francis has a significant section condemning global inequality.

The research on inequality is disturbing, but it also offers very clear evidence that doing the right thing brings many benefits -- individually, socially and globally. Communities with greater income equality rank far better on measures of human and social health.

A 2009 book, "The Spirit Level" compares the Index of Health and Social Problems with measures of inequality for the world's developed countries. A graph shows that the nations with low income inequality (Japan, Finland, Norway, Sweden are at the bottom) have some of the lowest measurements of problems. A rising trend line on the a graph shows the UK and Portugal toward the upper end, with both higher inequality and deeper problems. The US sits way above the trend line for both factors.

A parallel study has been done looking at US states, with generally comparable results. States with low income inequality (such as Alaska, Utah, Wisconsin and Vermont) also tend to have low scores on the Index of Health and Social Problems. The states with the highest problem scores (Alabama, Mississippi and Louisiana) are also very high on income inequality.

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Through the years in these Eco-Justice Notes, I have often urged faith communities to take a leading role in defining how our communities define "The Good Life." (There's a Notes from 2016 with that title.) I've insisted that people won't give up what they believe to be the good life, even for a great moral cause like stopping climate change. So, we need to define a different good life -- a rich, rewarding and just life -- that also resolves the great moral problems.

Consistently, I've said that simplistic economic measurements -- like average income (which hides inequality) or the Gross Domestic Product -- are inadequate and distorting ways to characterize the good life. The research on income inequality confirms that a high GDP does not guarantee a fair or desirable social setting.

Theologically, when we value relationships and justice, the good life will be seen as a measure of community health, and not just individual opportunity. The rich biblical theme of shalom is a social principle for "God's peace with justice for all creation."

The research on income inequality is frightening when we see the accelerating trends toward even larger gaps in the US. But the same research offers hope that steps to reduce inequality can lead to healthier and happier communities, and a less divided society.

As Dr. Stiglitz detailed, there are a lot of factors causing inequality. There's no one, simple fix to quickly turn us in a better direction. But there are some political initiatives in the US House and Senate to make major changes in tax laws. Sen. Elizabeth Warren is proposing a "wealth tax" that would impose a 1 percent surtax on billion-dollar-plus fortunes. Rep. Alexandria Ocasio-Cortez floated a 70 percent tax on annual income over $10 million. The political debate on these ideas may give some indication of whether the US is serious about dealing with the inequalities of income, wealth and political power.

From my perspective, reputable theological ethics must call us to work for greater equality of income, health and opportunity. That's true as we continue to deal with the tragic impacts of the government shutdown. That's true, too, as we look at the long-term health of national and global societies.

Shalom!

Peter Sawtell
Executive Director
Eco-Justice Ministries

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