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TEDx Talks
Published: 2013-03-11
Source: https://www.youtube.com/watch?v=GYHT4zJsCdo
fun going to talk about the price of inequality a I grew up in a Gary Indiana %HESITATION which is %HESITATION a steel town in the west %HESITATION on the southern shore of the lake Michigan and the history of Gary really reflects but the history of industrialization United States was founded in nineteen oh six a it was named after judge Gary who is the chairman of the
board of U. S. steel is the largest integrated steel mill %HESITATION in the world that he grew %HESITATION during the mid nineteenth twentieth century and then went into decline as I was growing up I saw so vividly %HESITATION problems of inequality poverty discrimination I saw workers fighting to get a decent wage and decent income to live on after a I left Gary %HESITATION things got worse
I went back a couple years ago to do %HESITATION a film %HESITATION and what I saw no real reflected %HESITATION how much worse things were have gotten since what %HESITATION the period where I I was growing up no I want to talk a little bit about %HESITATION the way things have involved in United States in the last especially thirty years are these concerns about inequality by
poverty discrimination were among the reasons that %HESITATION things that motivated me to do a study economics up but the consequences %HESITATION this inequality up now affect not just our economy is not just a moral issue I it affects our politics impacts our society would have written my book the price of inequality is that we are paying in all these dimensions invention of politics aside economy a
very high price for this inequality so me describe a first a little bit about the way things have changed %HESITATION how would equality has been growing at first I mean emphasize that there's no single way of measuring inequality no single %HESITATION future what was so striking about United States is that every aspect it's gotten worse are the fraction of the income that goes to the very
top %HESITATION the top one percent yet around twenty twenty five percent of the total national income the top one tenth of one percent didn't even move are more disproportionate share of the national income pod and things have gotten much worse as I said this year the goes to the top one percent has doubled since nineteen eighty the share the ghost of Tom one tenth of one
percent has crippled we can also talk about the hollowing out to the middle the fact that those in the middle are not doing very well and we can also talk about the increase of poverty the larger numbers of people poverty in this erasure of those %HESITATION at the bottom of the income distribution so all of these are our ways in which things have been up in
many ways getting worse in the United States and in the last %HESITATION especially thirty years but since the onset of the Great Recession two thousand eight things have gotten much much worse to give you a little picture %HESITATION of what's happening some data that just came out je very recently shows that in the last two years more than a hundred percent of all the game in
the United States has gone to the top one percent that means what the one percent is doing very well with the rest of us are actually doing worse most Americans major asset is their home and the results %HESITATION it out of the crash in the housing prices is that the median well with in the United States well that half the people are about half of blow
has fallen to the level that it was in the early nineteen nineties what does that mean that means that all of the gain in the wealth United States over the last two decades has a century gone to the top of our income distribution what there are number of all myths shipper that have been and %HESITATION probe that had a process there are about this inequality some
people upset brings things that are inequality is just then even discuss it is the politics of envy that should only talk about it in quiet rooms in hushed voices and one of the presidential candidates that you said that are I disagree I think it's fundamental to an understanding of what is going on in our politics and our economy and our society today so one of the
important %HESITATION myths is that everybody benefits %HESITATION it is an old idea called trickle down economics I wish were true because we thrown so much money at the top if it were true we would all be doing very well but in fact while the top has been doing very well those in the middle of the media has not median income today in the United States is
lower than it was it a decade and a half ago median income of a full time male worker the colored part of our population up the median income of a full time male worker is lower than it was in nineteen sixty eight forty five years ago don't you understand why do what if one understand why there's a kind of frustration in United States it really reflects
a reality of this kind of stagnation another myth let him very very %HESITATION pervasive is the notion that those and those at the top deserve at the higher income they contributed more we made it on their own a lot of people who who become very wealthy got like to convince themselves that they did it on their own but nobody makes it on their own everybody's helped
along the way and one way or another we all depend on on a functioning society there are people in import countries that I've seen over and over again who worked ex ordinarily hard inspite of working so hard them level of income that they have he's very moderate are many of my very poor you look at the people at the top it's not the people whom really
transformed our society really transformed our knowledge it's not the people who who invented DNA you discover D. N. A. who invented the waves or the transistor it's disproportionately a group of people would have I would virtuous rank seekers people who've been very good of seizing a larger share of the pie rather than making the pie bigger people like monopolist pink people in the financial sector who
who really perfected skill was all predatory lending abusive credit card practices %HESITATION so a whole variety of ways in which %HESITATION people can grab a bigger share of the pie we use the thinking of people in oil rich countries as when sick seeking and unbeknownst down wittingly we have become to a large extent a country which those who are rewarded the most our rent seekers a
third important math concerns opportunity we would like to believe America is a land of opportunity that's the notion American dream and it's very much in part of our psyche we stories of morale Horatio Alger people who didn't make it %HESITATION by dint of their own hard work from the bottom to the middle of the bottom to the top %HESITATION really a part of the American %HESITATION
%HESITATION in %HESITATION psyche but if you look at the numbers they don't support this view they don't have the numbers yes some people do make it from the bottom to the middle of the bottom to the top but what matters is what is the chance president Obama in his inaugural just talk about the fact that somebody born to a poor family should have an equal chance
of making it the top it's not true today but what's even more striking is not only is the United States the country their backs industrial country with the most in the quality of any of the other countries but it's also the country with among the worst equality of opportunity that means the chances of somebody going from the bottom to the middle of the bottom the top
are lower in the United States that even though with your it means that the life prospects of a young person United States is more dependent on the income and education of his parents that and other advanced countries for which those data in this course goes very much against our own %HESITATION self image the fact that there are such different outcomes really in different countries self destroys
another math that myth is that up this is inevitable this is just market forces just learn to live with it but the same market forces are operating are are operating on both sides the land it besides the Pacific that was our global forces and why is it with the same global forces looks fame laws have demanded supply the same economic forces America has wound up as
the country with the most inequality and among the worst in terms of equality of opportunity of any the advanced countries yeah I'm serious it's the way we shape those market forces Tara laws regulations force them just to give you one example something that reflects %HESITATION one of the a most heart rending stories that I I encountered one around the country talking about up my book and
that is %HESITATION ticket but something in arcane thing like bankruptcy law United States %HESITATION bankruptcy means who gets money when the credit when that when the debtor can't pay back all the money he owes United States it's the banks and their derivatives most risky products that brought a I G. down required a hundred fifty billion dollar bailout from United States government those who had the first
claim and when you have something like a first claim of that kind you are in effect encouraging speculation you're encouraging not only those individuals to get more money they get claims before workers and most other civilized countries it is the workers who had the first plane but not only is that true at the other end students cannot discard your debt even in bankruptcy when I was
say going around the country I've heard over and over again stories of young students graduating from college with decks average debt nightsticks now is over twenty five thousand dollars but saying they can get a good job they know that to get a good job they need a graduate education but their friends to have rich parents can afford to send them to graduate school their friends who
have moved rich parents can take an unpaid internship they couldn't do that and that meant up that their life prospects were diminished particularly in a period in which jobs are so short and that brings me to the final myth that I want to talk about and that is the notion that yes equality may be bad broad to do anything about it we would have to pay
a very big price we have the trait there there's a trade off we have to give up we have to give up growth we have to give up on economic efficiency main message in my book is that's wrong it's very well that the moon level of inequality and the way inequalities created ninety six has resulted and our economy performing more poorly than it would if we
had less inequality if we began to attack %HESITATION these forms of rent seeking if we work to try to create a more equal society once you know that there has to be something without saying saying when a a magazine like the economist not normally known as a %HESITATION a liberal magazine left leaning magazine agrees with me on almost every aspect of what I've just said it
should be a source of concern final question is is there hope inequality has been to the level that it had is now in the right state of two previous periods the Gilded Age night the roaring twenties in both of those instances Americans looked over the brink they decided they didn't like the direction in which we were going in both of those instances we pull back from
the brink the Gilded Age was followed by the progressive era the roaring twenties was followed by important social legislation thirties the question today is as we understand the enormous cost our society's paying by this high level but equality will we once again go back from the brink thank you ntfc
