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With nods to Occupy Wall Street, economic inequality teach-in generates light, not heat

UC Berkeley NewsCenter, April 5, 2012

 By Barry Bergman

BERKELEY — It may have lacked the drama associated with Occupy Wall Street, but a UC Berkeley teach-in on economic inequality Wednesday quietly laid bare the intellectual underpinnings of the nationwide push to narrow America's wealth gap — beginning with Emmanuel Saez, the Berkeley economist whose research brought to light the growing income disparities between the 99 percent and the 1 percent.”

Attracting 150 or so students, labor activists and other 99 percenters to a chemistry department lecture hall, the afternoon event featured a potent mixture of economic data, political analysis and calls to action. Berkeley political scientist Paul Pierson cited John Kenneth Galbraith in praising Saez's work, while economist Sylvia Allegretto quoted Bruce Springsteen on "the distance between American reality and the American dream."

Goldman School of Public Policy professor Robert Reich, a prolific author whose new ebook is titled Beyond Outrage, repeated an exhortation heard by thousands during his Mario Savio Memorial Lecture in November on the steps of Sproul Hall.

Those unhappy with the country's policies, the one-time U.S. labor secretary advised, should "stop complaining, and make it change."

Calling the nation's concentration of wealth "the biggest issue we're facing," Reich warned of "enormous implications" for the nation's economy and for democracy itself. "This is a defining moment," he said, adding that the question of "who gets what, and why" is "not liberal or conservative," but an issue of basic fairness.

Public scrutiny should target "the boardroom, not the bedroom," Reich said, inverting the formula favored by some prominent Republican politicians. "We should not be afraid to talk about economic morality and economic immorality."

It was Saez who first reported, in 2008, the lopsided income gains for the top 1 percent of U.S. households from 2002 to 2007. That elite group saw its annual income rise by 10 percent in inflation-adjusted dollars, Saez found, while the rest of the country — the 99 percent — saw their real incomes grow by just 1.3 percent.

Since the end of the recession, he said Wednesday, the top 1 percent have similarly reaped a disproportionate share of the growth, with their incomes expanding by 11.6 percent versus a minuscule 0.2 percent for all other Americans.

Thanks in large part to steady reductions in marginal tax rates, he said, America is back to a level of income concentration "as high as it was before World War II."

Pierson, whose latest book, co-authored with Jacob Hacker, is Winner-Take-All Politics, quibbled with the Occupy slogan "We are the 99 percent," arguing that "We are the 99.9 percent" more accurately reflects the degree of income concentration in the U.S. today. And he called on the Occupy Wall Street movement to "take some notes from the Tea Party" by focusing more on electoral politics.

"Public policy has mattered quite profoundly" in the expansion of income disparities, said Pierson. He took issue with the "comfortable conservative narratives" that frame income inequality as an inevitable by-product of globalization, insisting that tax policies and financial deregulation bear much of the blame.

"Those who have benefited want us to believe that it's fair, it's just and it's a natural outgrowth of the free-market system," said Allegretto, a labor economist and deputy chair of the campus's Center on Wage and Employment Dynamics, who observed that "corporate profits are at an all-time high," while the share of wealth going to wages is at "an all-time low." Americans "don't begrudge wealth," she said, but "the wealthy are becoming more wealthy at the expense of the rest of us."

In the 1990s, she said, "the rising tide did lift all boats," but the gaps between rich and middle- and lower-income Americans have widened ever since, with the disparities especially glaring in California. She also noted how top-tier incomes have far outpaced job growth since the end of the recession.

"We completely abandoned this recovery when it comes to Main Street," she said, "and this is going to haunt us for a long, long time."

Allegretto, whose presentation included a nod to George Carlin, made clear that, for her, the issue of income inequality was personal as well as professional.

"When I became an economist, I always wondered why people weren't talking about this all the time," she said. "It's just so crazy."

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