States Respond To Wealth Gap
|By Jake Grovum, Stateline.org|
|McClatchy-Tribune Information Services|
The two illustrate how widely inequality is spread around the country, and how the issue presents itself in different ways. The far-reaching problem was a driving force behind a raft of proposals in the states this year, as lawmakers looked to address persistent wealth gaps exacerbated by the Great Recession and the subsequent years of halting economic growth.
Polls show inequality to be a growing public concern. A
Those differences carried over to the states, where responses in blue versus red states seemed at times as vast as research has shown the wealth gap itself to be. This year, lawmakers sought to do something about inequality, from giving tax breaks to individuals and businesses to bolstering safety net programs and clamping down on corporate pay.
"Our economic divide has become so stark, inequality is so off the historical wall, it's almost forced itself on the country's attention," said
Others worry the focus on inequality can lead to proposals – targeting executive pay, for example – that won't directly help those who have less.
"Inequality has distracted attention from the bottom, where it needs to be," said
Inequality cuts across state lines and pervades every corner of the U.S. It also dovetails with a decline in economic mobility: A
The areas with the worst inequality show how the problem presents different challenges in different places.
The second most unequal was
Some patterns emerge from the inequality data:
Among the top 10 most unequal counties, six are in the South, including two in
Eighteen of the most unequal 25 counties are in the South;
Three are in the area around
This year Democrats in two coastal states floated a pair of novel proposals that sought to tie state power of the purse to inequality. Experts and the bill authors said it was the first time such measures had been introduced to address inequality.
The bill would have reduced the corporate tax rate for any company where the CEO makes less than 100 times the earnings of the median worker at the company (with bigger discounts for greater parity). Last year, a
The bill eventually failed its first floor vote, but its authors, Democratic Sens.
"My belief is the public is behind it, and will become more behind it," DeSaulnier said this week. He said he plans to lobby his colleagues to back the bill, but that "it can be intimidating taking on multi-billionaires. We've got a lot of plutocrats in this country now."
Opposition has been fierce: a handful of Democrats joined Republicans in opposing the bill, and the business community has come out in force to label it a "job killer." Opponents range from the
A bill in
"We can, as legislators, as keepers of the purse, help drive those incentives," she said. "You don't want to be anti-business but at the same token we have to change the conversation to the impact as a taxpayer."
The bill was approved in the
Minimum wage hikes _ often framed in terms of income inequality _ were a popular issue in states and cities this year, as Stateline has reported.
The debate around the minimum wage is likely to continue through the rest of the year, as several states have placed minimum wage hikes on their fall ballots.
In some states, Democrats and Republicans alike have gotten behind a wage increase. In
Advocates for the working poor have also looked to boost paid sick and paid family leave, arguing that raising the wages of the lowest-paid workers and giving them more flexible hours_so they can keep their jobs_go hand in hand.
"More and more, people see these in tandem," said
Yet those efforts haven't paid off in the same way. Attempts to start paid family leave programs state by state have hit a wall recently. Cities such as the District of
Safety Net Cuts
Much of the debate this year on inequality has taken place in the context of an economy ever-so-slowly recovering from the Great Recession. Lawmakers in some states have trimmed the safety net in response, saying if government assistance is too generous, workers will have less incentive to re-enter the workforce. Creating good jobs, they say, is the best way to address inequality.
The dynamic played out most prominently with regard to unemployment insurance, both at the state and federal level. Lawmakers considered changes to reduce the number of weeks available and trim benefits, with an eye toward boosting workforce participation.
Likewise, some states have cut back their own regular unemployment programs, reducing the number of weeks available to levels not seen in decades. At least eight states have reduced the number of weeks available below the usual 26 weeks, often on a sliding scale that reduced availability as the jobless rate declines. The
The familiar argument about not letting the safety net become a hammock, as articulated by Republican U.S. Rep.
"Rather than focusing on inequality, it's how do we actually help the poor and help individuals in need?" said
In a subtle but significant change, many states opted recently not to continue waivers from the federal government that let their residents collect food stamps without meeting certain work requirements. The moves were cast as welfare reform, to push people back into the workforce.
Pro-growth, business-friendly tax proposals have carried over into the fiscal realm in states this year as well. At the same time, other states wielded the tax code to boost workers' income.
Efforts to boost business through taxes took the form of cuts to personal and corporate tax rates. Lawmakers in
Advocates for the working poor turned to the tax code to boost the earned income tax credit (EITC), a benefit that offsets payroll and income taxes for low-income workers, mostly parents. Obama's proposal to expand the federal credit hasn't gained traction in
The credit is unique in that it generally enjoys support from Republicans and Democrats. The federal credit directs billions in benefits to taxpayers across the country, and 25 states plus D.C. have their own versions.
2014 was a year of expansion, in part thanks to recovered state budgets.
"That's a really great policy, along with the minimum wage, for making sure that state economies are recovering and that working families get to recover too," said
Equality in Counties
Most Unequal Counties:
Most Equal Counties:
Visit Stateline.org at www.stateline.org
Distributed by MCT Information Services