Income inequality: causes, consequence and solutions

Curious to know how many more years you’ve got?

“Give me your address and I’ll tell you how long you’ll live,” said Anthony Iton, senior vice president for healthy communities with the California Endowment. “When it comes to your health, zip codes matter more than your genetic code.”

Iton, a physician, has studied the relationship between life expectancy and the neighborhood in which people live. He’ll lead the first session of a free, day-long conference at USC, “The Future of Inequality,” hosted on March 14 by USC Dornsife’s Center for Economic and Social Research (CESR).

“Increasing inequality may be one of the defining trends of our time,” said Arie Kapteyn, executive director of CESR. “We’ve got to consider the consequences on society’s health and well-being and determine how we prepare future generations for a world in which the nature of work may be fundamentally different.”

The wealth gap is particularly acute in California, which is home to the greatest number of billionaires, but also has the nation’s highest rate of poverty when accounting for taxes, housing and medical costs.

Full or half-day registration for the conference, which also marks CESR’s fifth anniversary, is open to the public and includes lunch. Keynote speakers will include nationally recognized experts on income inequality from USC Dornsife, Princeton University, Harvard University and the California Endowment.

Deaths of despair

“To me, the big question is whether American capitalism can work for everyone, or only for an educated elite who are prospering at the expense of the majority of Americans,” said Sir Angus Deaton, Presidential Professor of Economics at USC Dornsife and a Nobel laureate.

Author of the book The Great Escape: Health, Wealth and the Origins of Inequality (Princeton University Press, 2013) Deaton, a senior scholar and professor emeritus at Princeton University, will join Anne Case, emeritus professor of economics at Princeton University, as a keynote speaker during a session on “Inequality and Deaths of Despair.”

“Increasing ‘deaths of despair’ are only the tip of the iceberg for working-class America,” said Case. “The physical health, social connection and domestic stability of labor market prospects continue to deteriorate.”

The professors will lead a discussion regarding whether modern capitalism is failing the large number of Americans who don’t have a bachelor’s degree. They will also explore which policies might help.

New work arrangements

The combination of rising inequality with technological advances that include the growing use of artificial intelligence and robots is resulting in significant changes to traditional employer-employee relationships. Those changes in the workforce will be the focus of a session led by Alan Krueger, professor of economics at Princeton University.

“An increasing number of jobs in the U.S. economy have been outsourced to independent contractors and contract firms,” said Krueger. “While the rise of freelance jobs provides opportunities for flexibility and being one’s own boss, it also reduces economic security and access to the safety net.” 

Arie Kapteyn. Photo by Roger Snider.

Our nation at risk

“Americans still suffer from the delusion that good schools will enable all students … to achieve success,” said Paul Reville, professor of education at Harvard University.

“We need to re-think our entire approach,” he said. “And if we fail, our nation will truly be ‘at risk.’”

Reville will lead a session on educational inequity, discussing how to prepare future generations for a changing world, strategies for providing each child with a fair chance for success and the case to policymakers and taxpayers for supporting investments in those strategies.

CESR’s Kapteyn says educating policymakers is central to the mission of his organization.

“Our goal is to improve social welfare by informing and influencing decision-making in the public and private sectors,” said Kapteyn, “so we’re looking forward to lively discussions with some of the nation’s leading experts on the issue of inequality.”

More information including registration is available on the CESR website.