Race, Partisanship, and the Rise of Income Inequality in the United States

task-force-report-02_whole-reportChapter 13: Race, Partisanship, and the Rise of Income Inequality in the United States

Paul Pierson, University of California, Berkeley

That there has been a massive increase in income inequality in the United States over the past generation is no longer news. Still, the transformation has been extraordinary in several respects. It is not just that the shift in relative economic resources has been very large; it is that the gains have been extremely concentrated at the very top of the income distribution. Occupy Wall Street’s “We are the 99%” slogan was perhaps insufficiently inclusive—the largest gains have gone not just to the top 1%, but to the top .1% and top .01%. The latter group has seen its share of national income grow by roughly 600% in the past 40 years (Saez 2015). Equally striking is the distinctiveness of the American experience. Although there has been some growth of inequality in most affluent democracies, the United States is an outlier, both with respect to changes in broad measures of inequality and with respect to the hyper-concentration of gains at the very top of the income distribution (Piketty 2014). Racially grounded conflict has always shaped the American experience, not least with respect to the distribution of economic opportunities and rewards. But where does race fit into the profound drift toward economic oligarchy we are experiencing? On the effects of rising inequality the case is clear: disadvantaged minorities have on the whole been big losers from the upward redistribution of national income. Most obviously, anything that makes existing wealth a bigger source of future economic wellbeing is going to be relatively disadvantageous to those who have little of it, as is true for historically disadvantaged minorities in the United States (Piketty 2014). There is also evidence of a “Great Gatsby curve” that suggests declining opportunities for upward mobility as a society’s income distribution becomes more unequal (Krueger 2012). Because minorities are disproportionately located toward the bottom of the income distribution, they would likely be net losers from any decline in mobility associated with rising income inequality.