Princeton prof discusses gap between rich, poor
Written by The Flat Hat|
September 23, 2008
Princeton University professor Larry M. Bartels, the director of the Center for the Study of Democratic Politics at Princeton, visited the College of William and Mary on Monday, Sept. 23, to lecture on the results of his latest research his corresponding book, “Unequal Democracy: The Political Economy of the New Guilded Age.”
“This is path-breaking research,” College government professor Larry Evans said. “This is one of the first serious considerations of the partisan causes of income inequality and the corresponding effects on political representation.”
Bartels began his lecture with references to Aristotle’s definition of democracy as an institution that grants political power to the rich and poor alike. He then suggested that America may not fit Aristotle’s confines.
“During the period from 1947 to 1974, the real income [adjusted to inflation] of households across the board remained relatively steady when measured as a percentage increase,” Bartels told the standing-room only crowd in Tucker Hall. “The gap between the rich and poor was growing, but the extent to which this was occurring was rather controlled.”
At this point, Bartels said, economics began changing.
“After 1974, however, this trend changed dramatically, resulting in slower and less evenly distributed increases in real income,” he said, the result of which was a drastic widening of the gap between the rich and the poor.
“There are certainly many external factors that can be considered as explanations for this recent phenomenon,” Bartels said. “But there are significant partisan differences that have led to this skewed income distribution that need to be examined as well. “
Under Republican administrations, and allowing a one-year lag to provide for time for policies to have effect, unemployment has increased, while gross national product and inflation have decreased. The opposite has occurred under Democratic control of the White House. This, Bartels said, reflects the basic divergence in policy objectives of the two parties.
Where partisan differences really begin to exacerbate income inequality is taxation.
“The tax policy of Republican administrations tends to favor the wealthy segments of society through policies such as tax cuts that mostly favor the rich and businesses, and repeal of the estate tax, which only applies to multi-millionaires,” Bartels said. “Democratic policy follows more egalitarian values, utilizing redistribution of wealth through progressive taxation to decrease inequality.
“In fact, there are significant data that show a pattern between Republican administrations and slow income growth across the board, and among the poor especially. On the other hand, the data suggest that, under Democratic administrations, inequality temporarily decreases, while more robust income growth is seen overall, and is especially concentrated in the middle- and lower-classes.”
Bartels also discussed the minimum wage. Republicans tend to favor a lower minimum wage, while Democrats support its increase, he said. Historically, public opinion has been strongly in favor of increasing the minimum wage, but despite this, the political system is not responding to public opinion and the real value of the minimum wage has actually decreased since the late 1960s.
Partisan bias is evident here as well.
“In the 25 years between 1949 and 2004 in which Democrats controlled the White House, the real value of the minimum wage increased by $4, while during the 31 years in which Republicans were in office, it declined by about $2,” Bartels said. “Since the minimum wage is not indexed to keep up with inflation, its real value erodes unless if active efforts are made to increase it.”
Bartels then posed a question on which he based the remainder of his lecture.
“The big question, then, is this: why do people vote for Republicans?” Bartels asked.
Bartels responded to the suggestion that social issues have trumped economics in the minds of low-income voters, thus prompting a movement towards the Republican party. He dismissed this argument based on the fact that low-income voters still lean toward the Democratic party, and continue to rank economic issues over social ones in terms of importance.
Another explanation is that Americans don’t care about inequality, but Bartels refuted the claim.
“85 percent of Americans say that society should do whatever is necessary to ensure equal opportunity for all,” Bartels said.
There is a catch, however.
“Although Americans may support egalitarian values in principle, when it comes to specific policy questions, the majority often end up supporting policies like the Bush tax cuts or repeal of the estate tax, even when these policies do not directly benefit them,” Bartels said.
The explanation that Bartels proposes is that partisan bias in economic accountability due to myopia — the shortsightedness of voters — is the main reason for the Republican edge. During the period from 1952 to 2004, Bartels said, even though Democrats tended to oversee better overall income growth than Republicans, Republicans happened to beat Democrats during election years, especially in high-income portion of society. This pattern holds true across the board with the exception of Jimmy Carter, regardless of the predecessor’s party.
“The data indicate that voters almost exclusively consider election year income growth when they decide whether to vote for the incumbent party,” Bartels said. “Additionally, voters tend to disproportionally consider the economic fortunes of the wealthiest portion of society.”
Bartels then gave an overview of his research, which looked at the responsiveness of the United States senate during three consecutive terms of Congress from 1989 to 1994 to high-, middle- and low-income voters.
“It turns out that members of Senate, regardless of party affiliation, are not responsive at all to the public opinion of the bottom third of voters,” Bartels said. “Republicans were more responsive than Democrats to the most wealthy voters, but this does not alter the fact that neither party even appeared to consider the opinion of the poorest portion of society.”
Bartels said the gap is growing.
“With the gulf between the rich and the poor increasing, these opposite ends of the economic spectrum are becoming more and more isolated from one another,” Bartels said. “When added to existing racial and social tensions, this leads to less sympathy for poor people among the rest of society, which in turn leads to policies that further increase inequality.
“Only emergencies are likely to bring attention to the rising inequality between the rich and the poor, and even these have limited effectiveness. I don’t like what I see, but that doesn’t make it go away.”
Bartels did express hope.
“Despite these bleak results, the poor are not powerless,” Bartels said. “Partisan identification has a greater effect on a Senator’s voting behavior than the opinion of the constituency that he or she represents,” Bartels said. “As a result, simply by voting, even the poorest member of society has the opportunity to profoundly impact the political process.”