Competing Strategies to Reverse Extreme Economic Inequality

This symposium presents new ideas and analysis from the Social Work Grand Challenge on “Reversing Extreme Inequality.”

The primary means by which most families achieve economic progress is through private-sector work; however, over the last four decades, the returns to labor market involvement have deteriorated, and employment instability and underemployment have increased. The industrial era idea that most families sell their labor and use the income to support households (and accompanying social policy, to supplement labor income shortfalls) is badly frayed. Looking ahead, it is not clear that a globalized, information age economy will provide jobs that support households for very large portions of the population. If this is the world we are moving into, then focusing on how to fix the jobs that the market is providing is important but inadequate. This roundtable will open dialogue about competing strategies to address these challenges, considering the relative merits of the following broad and potentially contrasting approaches:

*Wage subsidization. This includes many of our current anti-poverty policies, such as the Earned Income Tax Credit. These approaches use public transfers to improve the lot of individuals who work in private sector jobs, not directly require private-sector employers to change their behavior.

*Labor standards mandates. Rather than subsidizing the inadequacies of private sector employment, these approaches, such as requiring higher wages (e.g., minimum wage; living wage), strengthening labor standards (e.g., reforming Fair Labor Standards Act), and strictly enforcing anti-discrimination measures, directly improve the quality of jobs and the treatment of workers.

*Basic income. Basic income strategies provide a minimal standard of living to all residents, regardless of work or earnings. Related basic income guarantees (or negative income taxes) provide a floor income that decreases as earnings rise. Globally, locales as diverse as Finland, India, Namibia and Switzerland are considering or testing basic income policies

*Public employment. Public jobs paying a living wage or a minimum wage plus supplementation provide viable alternatives to private sector employment. Public jobs approaches have fallen in and out of fashion over time in the US, but they hold particular promise for those at risk of exclusion from the private market, such as youth from marginalized backgrounds.

*Human capital investments. This strategy rests on the assumption that education, skills, and training will increase returns to employment, allowing access to jobs with better wages and economic security. We will focus specifically on early preschool investments, youth employment supports, and adult workforce development.

*Asset building. Strategies based on progressively building assets for all households will equalize wealth inequality. With assets, household financial stability does not rely solely on monthly flows of income, and assets can help individuals develop additional earning capacity through investments in human capital and entrepreneurship.

Individual roundtable participants will briefly summarize each strategy; all participants will then debate the approaches’ relative merits. We aim to promote critical engagement among social work researchers as the Grand Challenges process pivots towards solutions to extreme economic inequality.