Income inequality poses a threat, even in Minnesota

  • Article by: EDITORIAL BOARD , Star Tribune
  • Updated: October 20, 2013 - 5:57 PM

Even in above-average Minnesota, inequality is threat.

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Inquality in the United States has reached 1928 proportions, and you know how that turned out. In this photo: A statue of men standing in a soup line during the Great Depression is part of a new memorial dedicated to the life of the President Franklin Roosevelt.

Photo: BRIAN DIGGS, Associated Press

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Income inequality in the United States has reached 1928 proportions, measures released last month show — and any student of American history knows what ensued in that decade.

Last year, the top 1 percent of U.S. earners took home a record 19 percent of the nation’s income.

Those numbers provided fitting context for this year’s annual gathering of state policy wonks, the Conference on Policy Analysis sponsored by the College of Continuing Education at the University of Minnesota. The theme of the 29th annual event: “Access and opportunities: All things not being equal.” Conference planners seemed intent on breaking through Minnesotans’ ho-hum response to the state and nation’s widening gaps in income and wealth.

Minnesotans can be forgiven for not seeing income inequality as a pressing issue. By econometric measures, this is among the least-unequal of the 50 states. We’ve been blessed with more prosperity than most. It illustrates what economist Jay Coggins of the University of Minnesota reported: The more affluent the place, the narrower the gap between its richest and poorest people.

But Minnesota’s inequality trend line points in the wrong direction. Coggins and his University of Minnesota colleague Thomas Legg reported that inequality increased as median incomes fell in Minnesota in the past decade. The rising tide of economic recovery since 2010 is not lifting all Minnesota boats. Witness the increase in homelessness measured by Wilder Research in 2012, and the disturbingly large gaps between whites and people of color.

Why should Minnesotans care? Consider these indictments of high-income inequality, offered by various conference speakers:

• It isn’t good for the overall economy. When the masses can’t afford to spend, the elites can’t spend enough to keep the consumer-based American economy vital.

• It isn’t good for a community’s quality of life. Public health is poorer, life expectancies shorter, educational attainment lower and civic participation weaker in places where the lion’s share of economic gains flow to the top.

• It isn’t good for democracy. “Our values are deeply violated” when economic gains are not widely shared, said keynoter Joe Soss of the Humphrey School of Public Affairs. “We say that this is a society where hard work ought to pay off, to allow you to have a comfortable life and to move up. If we’re serious about those things, we cannot help but be troubled” by today’s income trends.

Soss argued that government and corporate policies in the last 30 years have widened the rich/poor gap. We hope he’s right, because that would imply that wiser policies can narrow it again. In Minnesota, the first step toward making it so is piercing the complacency that holds that today’s level of income inequality is normal and inevitable.

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