Thursday, 1 September 2011

Tackling inequality: Where do we start?

By Noshua Watson

Timothy Noah at Slate magazine wrote a fantastic series on the history and sources of income inequality in the US.  Based on inequality research and extensive conversations with economists, he allocated blame to various causes of the increase in income inequality in the US since the 1970s:
  • Racial and gender discrimination 0%
  • Single parenthood 0%
  • Information technology and computers (increased productivity of skilled workers) 0%
  • Immigration (downward pressure on wages) 5%
  • Tax policy (lower marginal tax rates for the rich) 5%
  • Trade (decreased wages for unskilled workers) 10%
  • The decline of labour (decreased labour union membership) 20%
  • Wall Street and the ultra-wealthy (Winner Take All markets and superstar pay) 30%
  • Poor primary and secondary education (increasing returns to tertiary education) 30%
What do you think?  Is this an effective way of prioritising our resources? Some causes are more global than others.  Which ones can we actually influence with development policy?