The Mail Tribune article on “the haves and have-nots” Sept. 13 gives us an accurate description of increasing income inequality in Jackson County that reflects a trend in Oregon and the United States. What the article does not do is explain why as a community we should be concern about income inequality in Rogue Valley and what we can do about it.
Besides limiting economic mobility, inequality leads to social segregation that will only perpetuate poverty. It does this primarily in three ways:
First, the more concentrated family resources are, the more concentrated parental investments in children are likely to be. High-income families now spend seven times more a year on average than low-income families to develop their children’s learning skills. Without some balancing from additional public and private resources into programs like quality preschool education, the gap between rich and poor students will widen.
Second, inequality is typically measured by individual income but full measures should include access to quality public goods. Greater inequality leads to economic segregation that puts into motion a competition for quality public goods and services, as families pay a premium for houses in the “right” neighborhood or city. Households gain more than just status from where they live. They also have access to better schools, less pollution, and safer places to live. Families with rising incomes can afford this housing competition, while others cannot or try to make up the difference with increased mortgage or credit card debt.
Third, significant income inequality leads to more segregated neighborhoods that have a profound influence on civic quality and social responsibility. Poor people used to live in greater proximity to rich people in order to get to the jobs that involved serving them. But the automobile has permitted people to live apart, breaking down our awareness of what people need for prosperous and healthy lives.
As incomes rise disproportionately to the top, the wealthy are less likely to support taxes needed for public goods and services, as they are able to purchase many of these services privately. Households whose standard of living depend on public goods and services for education, public transportation and safety are worse off because they cannot afford to replace needed public services with private ones. Increased income inequality just exacerbates this problem.
It’s important for us to recognize that inequality affects not only individual wages and incomes, but also our ability to experience a middle-class lifestyle through quality of community and public services that we all share. When we discuss ways to alleviate income inequality, we need to go beyond just rising income, and think about creating an affordable living community based on its urban design and public services.
There are also those stubborn problems associated with income inequality that cannot be addressed simply by educational opportunities. For example, along with physical disabilities, drug or alcohol abuse and mental illness are major barriers to success on the job.
In many cases, offenders have to pay for rehabilitation, which means judges can only require very low-cost programs that often are ineffective. The right treatment and monitoring of drug and alcohol dependency could bring important increases in labor force productivity and lower dependency rates. The same type of treatment could help those with mental illness.
Another group we need to be concerned about are former prisoners. With more nonviolent crimes classified as felonies than in the past, the prison population has grown very rapidly. We need to plan for what this predominately young population will do when they leave prison.
The popular media and politicians usually frame the income inequality debate in terms of one group against another — taxes vs. quality schools, increased wages vs. number of workers hired. But more important than taxes or consumer prices — each only a part of household costs — is how our policies fit together to deal with income inequality.
Investing in human capital (education) is only part of the story. In addition, we need to look at how our county, cities and state support opportunity and mobility with their policies as well. This means encouraging community and urban design that supports an affordable lifestyle, increased health and outdoor experiences, transportation options, and opportunities for both children and adults to develop their full human potential. This is just as important for local economic development in the 21st century as dealing with income inequality as increasing the minimum wage and providing opportunities for business expansion.
Richard P.F. Holt is a prize-winning author and professor of economics at Southern Oregon University. He is presently writing a book on liberty, equality and social justice.