Question: Do you agree with Pope Francis’ assertion that income inequality is the greatest economic problem facing the world?
Panel: Yes 4, No 12
Marney Cox, San Diego Association of Governments
In free societies with private property rights, income inequality is a byproduct of economic growth -- which is necessary to reduce poverty and all its harmful effects. Not sure it matters how much Bill Gates is worth as long as everyone else has an equal chance to succeed and, yes, fail. F.A. Hayek once said, “There is all the difference in the world between treating people equally and trying to make them equal.” The opportunity for income and social mobility combined with economic growth is the key to a rising standard of living and more economically important than eliminating income inequality.
If the disparity between the have countries and the have-not countries and the have and have-not citizens within countries continues, it certainly could be in the next decade. The more concerning current economic problem is what we are now seeing in Greece, Italy and Spain: huge unemployment numbers, especially among the youth in these countries, due to decades of government overspending for public services. The results are mounting debt that can no longer be ignored. The wake-up call has come, and the fortitude to endure the years of pain to correct it is a bigger concern.
Kelly Cunningham, National University System
Not because of unfettered capitalism, but by ruling parties disrupting the flow of wealth. The best system for distributing wealth and prosperity derives from market-based economies. Capitalism reduces poverty, not increases it. Rising globalization and the spread of capitalism enable developing countries to converge on advanced economies after centuries of divergence. Successfully emerging poor countries today engage the global economy, allow market prices to balance supply and demand, and allocate scarce resources to spur investment, trade and job creation. Meanwhile, America heads the opposite direction with 95 percent of real income growth the past five years accruing to the top 1 percent.
Gina Champion-Cain, American International Investments
Income inequality is an increasingly problematic driver of both social and economic distress. Pope Francis has quickly become a catalyst for defining issues of worldwide interest and importance. He hits a difficult cord here. There is growing belief that enormous world populations do not, may not or never will have the opportunity to extract themselves from abject poverty. A decrease in economic hope for large, diverse groups across multiple continents is a dangerous condition. Real, not imagined, decreases in personal economic opportunities must be addressed. Realistic solutions to economic inequality lay well beyond standard notions of progressive redistribution of wealth.
Alan Gin, University of San Diego
In the U.S., income inequality has reached its worst levels since the 1920s. This has been developing for decades, as globalization, the decline in unionization, the reduced value of the minimum wage, and technological changes have hurt those in the lower- and middle-income levels. At the same time, compensation for those in management and finance has skyrocketed, with people in those areas actually benefiting from reduced wages for workers (through increased corporate earnings). While there is some income mobility, it has been declining and is less than in other advanced economies. This has slowed the recovery due to the negative impact on consumption, particularly by those in the middle.
Stephan Goss, Zeeto Media
With the top 1 percent of Americans controlling 40 percent of U.S. wealth, income inequality is becoming a big influence on society. If the difference between the rich and poor keeps growing, it will eventually lead to social unrest within the U.S. as well as globally. No matter your views on capitalism versus socialism, it’s hard to argue that a country torn by social dissent and a populace lacking a common goal will have a competitive advantage. Do I think this will be the single biggest economic challenge over the next 100 years? No, but I do believe it will be a significant factor in global competitiveness.