Rebuilding An Opportunity Society: The Roles of Policy and Power. Jared Bernstein Center on Budget and Policy Priorities [email protected] Prepared for “Work and Livable Lives” Conference St. Louis, MO 2/27/12. The Model. Normal times:
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Rebuilding An Opportunity Society: The Roles of Policy and Power
Center on Budget and Policy Priorities
Prepared for “Work and Livable Lives” Conference
St. Louis, MO
Growthreduced poverty, rising living standardsopportunitiesmobility
Growth[ineq wedge diverts*]poverty and wage stagnationless access to opportunitydiminished mobilityconcentrated influencemore inequalityvicious cycle
*See Appendix A (last slide) re factors behind higher inequality.
“Sticky” pov rates
Source: US Census Bureau, and Mishel et al, State of Working America
Source: Whither Opportunity, Russell Sage
Enrichment Expenditures: music and art lessons, books, sports, tutoring.
Source: Whither Opportunity? Russell Sage
From Baily, Dynarski, Chapter 6, Whither Opportunity
Dynarski et al, 2011
Evidence #3: Mobility Has Gone Down a Bit and is Relatively Low in US
Sources: Katherine Bradbury, 2011; Miles Corak, 2011
Evidence #4: Inequality and Political Influence
Martin Gilens, Affluence and Influence, forthcoming:
When the preferences of low and middle income Americans differ from those of the wealthy, “government policy appears to be fairly responsive to the well-off and virtually unrelated to the desires of low and middle income citizens.”
Income and Elections, Participation
Sources: 1, Campaign Finance Institute (Senate is my calculation of moving avg); 2-4 Gilens, forthcoming
Taxes and Transfers Less Effective in Reducing Inequality
CBO: The equalizing effect of transfers declined over the 1979–2007 period primarily because the distribution of transfers became less progressive. The equalizing effect of federal taxes also declined over the period, in part because the amount of federal taxes shrank as a share of market income and in part because of changes in the progressivity of the federal tax system.
Source: CBPP calculations from Congressional Budget Office data
Lowering Top Marginal Tax Rate Associates with Greater Ineq, Not Faster Growth
Source: Piketty, Saez, Stantcheva, 2011