Editor’s note: This story was originally published in August 2014.
Centuries after Marie Antoinette lost her head to French revolutionaries, millions still believe she once proclaimed, “Let them eat cake.” This, it is wrongly believed, was the queen’s response to the poor who complained about their lack of bread. The myth persists for the same reasons that the issue of income inequality resonates with so many today. People despise the excesses of the rich, particularly when those who feast seem to disregard those who scrounge for stray crumbs. And people resent the injustices that still oppress the poor, though the types and degree of oppression may be different. While the U.S. is not on the verge of violent revolution, the fate of Marie Antoinette might provide a timely warning: Perhaps we need to pay attention to the issue of income inequality.
In December 2013 President Obama labeled income inequality as “the defining challenge of our time.” Since then, the defining and elusive challenge of the media has been to conduct a civil discourse. Constructive dialogue is undermined by inflamed emotion and overheated debate, causing some to wonder: How can we address the issues in a way that encourages constructive solutions?
A helpful step is to read deeper into the story behind the sensational headlines and examine the factors that contribute to or inhibit human flourishing.
Whether or not Americans agree that income inequality is the defining challenge of our time, 67 percent are dissatisfied with the way income and wealth are currently distributed, according to Gallup. And a majority of Americans, reports the Pew Research Center, see the growing gap between rich and poor as bad for society. While Americans acknowledge that inequality has grown, they diverge at the question of its cause, and its solution. Republicans are more likely to emphasize personal responsibility as a cause, and they often point to economic markets to supply a solution. Democrats are more likely to emphasize circumstances beyond personal control as a primary factor; they tend to favor government intervention in order to narrow the gap between rich and poor.
But as Christians who believe that brokenness affects every person, institution, and aspect of creation, we acknowledge that neither markets nor government can create perfect justice and human flourishing. Those on both ends of the political spectrum simplify the complex issues that contribute to income inequality, often pointing to economic factors alone. This limits our discourse to questions of whether to raise the minimum wage, or how to ensure that workers earn the overtime pay they merit. In reality, social, cultural, behavioral, spiritual, and economic factors are all part of the problem — and the solution.
How the Rich Get Richer
The two main characters in the income-inequality story, the poor and the rich, develop along two plot lines that may not be as interconnected as some imply. The common perception is that the economy is one big pie; as the rich eat more, the poor end up with a smaller and smaller slice. However, an increasing gap between rich and poor does not necessarily mean that wealth was transferred from the poor to the rich. New wealth can be created in a free market economy; blaming the rich for the immobility of the poor doesn’t sufficiently explain income inequality.
So if the rich are not getting richer by “stealing” from the poor, how do they continue their upward trend of accumulation? One reason is what economists call “assortative mating,” which refers to the trend of better-educated people marrying other better-educated people, while those with less schooling are more likely to choose a less well-educated partner. Because income levels are highly correlated with schooling levels, assortative mating increases income inequality. Highly educated couples pass these advantages to their children, multiplying the effect over time.
Another explanation for the rise of the mega-rich is the “Superstar Effect,” articulated by economist Sherwin Rosen more than 30 years ago. Rosen argued that because of technology, a small number of performers in a given field would reach a larger market and accumulate a greater share of the revenue from that market. The top earners in sports, business, technology, and entertainment illustrate this effect: LeBron James, Alex Rodriguez, Mark Zuckerberg, Jeff Bezos, Warren Buffett, Larry Ellison, Oprah Winfrey, Lady Gaga.
Dr. Anne Bradley of the Institute for Faith, Work & Economics also points to cronyism as a contributing factor. “Cronyism occurs when corporations pursue the government for benefits, protections, or subsidies benefiting their business at the expense of competing firms and consumers. … Politicians have responded favorably to these lobbying efforts and have created a culture in which the most well-connected win. This is inherently unfair. An unjust system prevails where ordinary businesses and entrepreneurs fail because they lack the resources to buy off politicians. The unfortunate result is that they can’t succeed, and the well-connected get richer and stifle opportunities for the poor.”
How the Poor Get Poorer
It’s been 50 years since President Lyndon Johnson declared war on poverty. Today, just as many are mired in scarcity as there were then. Michael Gerson of The Center for Public Justice writes, “America spends about $1 trillion on transfer programs at all levels of government. And there are still more than 40 million people below the poverty line.”
One reason is that our economic and social policy is woefully out of date, mired in the culture and technology of the past. In his December 2013 speech, President Obama said, “Over more than three decades, even before the Great Recession hit, massive shifts in technology and global competition had eliminated a lot of good, middle-class jobs and weakened the economic foundations that families depend on. … The cold, hard fact is that, even in the midst of recovery, too many Americans are working more than ever just to get by, let alone to get ahead. And too many still aren’t working at all.” Why is it that poverty remains so stubbornly powerful in one of the world’s richest countries?
In his book “When Helping Hurts,” Brian Fikkert urges Christians to look at the broken systems that contribute to poverty, and the historical racism that has perpetuated itself over time. “Caucasian evangelicals in the United States, for whom the systems have worked well, are particularly blind to the systemic causes of poverty and are quick to blame the poor for their plight,” he says. “Evangelicals tend to believe that systemic arguments for poverty amount to shifting the blame for personal sin and excusing moral failure.” However, there are factors the poor can’t control and that markets cannot fix. The idea that we have a flawless market system in which everyone has an equal opportunity, and where outcomes are accurate rewards for hard work, denies the reality of the Fall. Christ’s redemption is necessary for markets as well as people.
As Obama indicated, the same trends of technology and globalization that create “Superstar” earners also redistributed lower-skill jobs and placed a higher value on education. Technology creates the need for higher-skilled workers who can fix Teslas, solar panels, iPads, hearing aids, and MRI machines. Gary Becker of the Acton Institute shows that earnings are increasingly tied to education. “From about 1930 to 1970, the typical college graduate in the U.S. earned about 40 percent more than the typical high school graduate, while the typical high school graduate earned some 40 percent more than the typical high school dropout. These premiums have since doubled to between 70 percent and 80 percent. …” This is why income inequality is tied to educational inequality.
It’s been 50 years since President Lyndon Johnson declared war on poverty. Today, just as many are mired in scarcity as there were then.
And educational inequality in the U.S. is real, says Fikkert, founder of The Chalmers Center for Economic Development at Covenant College. He points to his hometown of Chattanooga, Tenn., as an example. Fikkert can afford to put his kids in a private Christian school. His friends at New City Fellowship who are African-American and live on the other side of town have no choice but to enroll their children in an underfunded public school. “As a result, my kids will probably go to a good college and the African-American kids will probably not go to college. That sets them up for a life where they will perpetuate the cycle of poverty. … The kids who are born into these neighborhoods — through no choice of their own — are going to attend schools that won’t allow them to move out of their community.”
The income and education gaps are accompanied by a corresponding “marriage gap” that also follows socioeconomic lines. The Pew Research Center reports that in 2008 about half of all adults in this country were married, while in 1960 the figure was seven in 10. In 2008, there was a 16 percent gap in marriage rates between college graduates (64 percent) and those with a high school diploma or less (48 percent). In 1960, this gap was just four percentage points (76 vs. 72 percent). The difference matters in the income-inequality debate because intact families provide children a better chance of upward mobility, says W. Bradford Wilcox in Slate magazine, citing a study by Harvard University economist Raj Chetty. “Of all the factors most predictive of economic mobility in America, one factor clearly stands out in their study: family structure. By their reckoning, when it comes to mobility, ‘the strongest and most robust predictor is the fraction of children with single parents.’ They find that children raised in communities with high percentages of single mothers are significantly less likely to experience … mobility.”
The same study cites economic and racial segregation as another important factor in economic mobility. Wilcox writes, “Children growing up in communities that are racially segregated, or cluster lots of poor kids together, do not have a great shot at the American Dream.” With dismal educational opportunities, unstable families, and segregation, lots of poor kids — through circumstances beyond their control — live in a poverty pit where most of them will stay, stuck. Perhaps that is the reason fewer Americans believe the American Dream is attainable. Pew Research shows that only 60 percent of Americans believe it’s possible to get ahead by working hard, down from 74 percent in 2000. Meanwhile, the number of people who say that hard work and determination don’t guarantee success has risen to 38 percent from 23 percent in 2000. For many of the poor, hope is spiraling downward, just like their income.
No Easy Solution
Income inequality rises from generational patterns that can’t be solved by a single legislative bill, or even by an economic policy agenda. In Fikkert’s opinion, low-income people face feelings of helplessness, anxiety, suffocation, and desperation that the wealthy don’t know. Development expert Robert Chalmers argues that the materially poor are trapped by multiple, interconnected factors — “insufficient assets, vulnerability, powerlessness, isolation, and physical weakness that ensnare them like bugs caught in a spider’s web.”
To help extricate them from that web, we must address more than material needs; just having enough to eat is not a sufficient goal. But “equal income” for everyone is an equally poor objective. In her study “Why Does Income Inequality Exist?” Bradley points to the Apostle Paul’s teaching on spiritual gifts in I Corinthians 12 to suggest that inequality is part of the created order. Because we are designed uniquely in God’s image, with a variety of gifts, we are inherently unequal. She writes, “Different people are born with different gifts and choose to pursue them differently. Those gifts carry unequal earthly rewards, one of which is in the form of income. …” The question that must be addressed biblically and through public policy, Bradley says, is the relative prosperity of the poorest among us, and their ability to improve their circumstances by pursing their gifts. We need an opportunity society, she continues, “which embraces our uniqueness, unleashes our creativity and potential and serves the common good.”
Equality, then, is not the goal, says Fikkert; human flourishing is, and that entails more than a full pantry and a TV. Fikkert writes, “The goal is to restore people to a full expression of humanness, to being what God created us all to be, people who glorify God by living in right relationship with God, with self, with others, and with the rest of creation.” That kind of restoration is not just for the poor, but for all of us who acknowledge our spiritual bankruptcy. Christ, in his generosity, rescued us from spiritual poverty — a pit of despondency we could never climb out of ourselves. Thank God that He didn’t tell us to “pull ourselves up by our bootstraps”! Instead, He condescended to come to earth and become poor on our behalf. As a result, we can humbly look at the poor, knowing that their need of redemption is no greater than ours, though it may be more visible.
Equality, then, is not the goal, says Fikkert; human flourishing is, and that entails more than a full pantry and a TV.
From this perspective, we can move beyond mere arguments about income inequality to addressing the complex underlying issues that perpetuate it. We can use our economic and political power to advocate for the needs of those who don’t have a voice. We can denounce cronyism and elect politicians who fight it. We can build an educational system that serves the needs of the rich and poor alike. We can support single mothers and demonstrate the value of intact families. We can work to ensure all communities are safe and beautiful, not just the ones where we live. We can seek racial reconciliation. We can create an environment where businesses thrive. Just as Jesus did for us, we can invest ourselves in the lives of the poor.
Instead of indifferently telling the poor to “eat cake,” we can pull up a chair for them at the banquet table, where the materially rich and poor alike are welcomed into the house of the King. We can invite them to hope in the day when those who are found in Christ will “enjoy a feast of rich food for all people, a banquet of aged wine — the best of meats and the finest of wines” as described in Isaiah 25:6. Earthly inequalities long-forgotten, on that day we will be overwhelmed by the most tantalizing feast we’ve ever consumed — and our souls will be satisfied.
Susan Fikse is a wife, mom, and freelance writer who lives in San Diego. She has officially joined the 21st century — she’s on Twitter @SusanFikse.