Income Inequality – At the Municipal Level

The elephant in the room, the driver of anger and frustration all across the land, is the shimmer fear of America’s economic future as it applies to most of us. The large number of judicial decisions from the U.S. Supreme Court that deal with how the mega-rich can use their money to control and influence the system overwhelmingly favor the rich. Getting centrist legislation out of Congress to support the well-being of average Americans has been gridlocked into oblivion, a healthcare plan aimed at the middle and lower classes is allowed to dangle its serious flaws without the slightest notion of a “fix” in the offing, and our economic spectrum tells us that our crowding of rich at a small slice at the top, a severely contracting middle class and an explosion of Americans at the bottom we look more than a banana republic than the good ole USA we grew up with.

As states and cities face the drain of under- and unfunded pension obligations to vast cadres of actual and potential government retirees, income and sales taxes that have seriously eroded their economic solvency, they are unable to step in and adjust for the failings at the federal level. Austerity is the new mandate. Local education – the big equalizer – has become a sacrificial lamb. But cities are where these economic disparities are clearly the most pronounced, so it is at the municipal level that these complications are most threatening.

According to the New York Times (April 6^th), New York and San Francisco represent the extremes of exceptionally expensive housing reflecting an 18 times income disparity between households at the top and bottom 10%. Boston has a 16 times ratio, Los Angeles 14 times. Even at the reaches of cities with more affordable housing (e.g., Kansas City), the income disparity index flashes 10x disparities and doesn’t really fall below 8x much of anywhere. Along with the dying notion of upward social mobility that once defined our nation’s the support systems, the demise of labor unions in the private sector leaves working class buying power without a champion.

Even though their options are limited, a few cities are beginning to implement their own policies to target this trend of growing urban poor amidst the spoils of the one percenters: “The Seattle City Council is intensely debating a plan to raise the minimum wage to $15 an hour from $9.32 — forging ahead on its plan to tackle income inequality as efforts in the nation’s capital have languished.

“‘The accumulation of 30 years of rising income inequality is finally having its impact,’ said Mayor Ed Murray, sitting in his glass-walled office overlooking Puget Sound. ‘People can’t afford to live a decent life.’

“Local policy makers ‘can’t just wait for Washington,’ said David Rolf, the president of the local Service Employees International Union chapter… But economists from across the political spectrum warn that the policy choices available to local governments might, at best, do little more than soften the blow from rising inequality.

“‘Cities just don’t have the tax and trade policy and tools to rein back inequality in a significant way,’ said Alan Berube, a senior fellow at the Brookings Institution in Washington, D.C. ‘They can’t really redistribute income in the way the federal government can, so they are reaching for the levers they have.’

“Nonetheless, the movement at the local level goes well beyond Seattle. In New York, Mayor Bill de Blasio, who campaigned on a platform of fighting inequality, has won support for expanding preschool education but has run into obstacles at the state level to tax the rich more to pay for programs aimed at the poor. ” NY Times.

Some of these cities might just drive more than a few businesses to other more competitive environments, desperate for the business. We are going to see that natural anger at sustained economic loss and polarization escalate over the years. Gridlock in Congress will only make it worse. There is a leadership vacuum in this country, and we are deeply divided at every conceivable level in the body politic. If we don’t figure out how to be Americans (without another adjective attached) again, we are planting the seeds of our own dissolution.

I’m Peter Dekom, and we need to find that big message of togetherness that will draw us back into a unified United States of America.