The Path Toward Reducing Inequality in NJ – Part II

In Part I we looked at how inequality decreased during the post WW II period and then resumed its rise  – one that is more severe in NJ than nationally. We also looked at the billionaires in NJ many of whose income provides little social benefit, and at a specific New Jerseyan whose corporate “super salary” was disproportionate in comparison with that of other employees.

Reducing inequality is not as simple as increasing taxes on the rich and super rich. We need to strengthen the middle class which in America has just dropped from its long held number one position world-wide. We need to provide more resources for the working poor and those less fortunate. Reducing inequality does not mean reducing the number of wealthy people but increasing the income of those who are not wealthy.

Thomas Piketty, author of Capital in the 21st Century, as the Guardian explains, says, “The wealthy are getting wealthier while everybody else is struggling. Inequality will widen to the point where it becomes unsustainable – both politically and economically – unless action is taken to redistribute income and wealth.” Piketty, called a rock star economist, suggests solutions which could be implemented in New Jersey. We are exploring them in this series of articles.  

In Part II we will look at what Americans say about the inequality gap, some of the causes, the very political nature of the subject, and some steps we can take in New Jersey to increase the income of those who are not wealthy.

Pew Research Center in a survey from January, determined about two-thirds of respondents (65%) said the gap between the rich and everyone else has increased over the past decade, but they don’t agree on why. The main reasons they cited were taxes/loopholes, government policies, jobs/unemployment, corporations/executives, greed, gaps in wages, and the rich having more opportunities. Clearly there is no one single cause and no one single solution.

“The history of distribution of wealth has always been deeply political,” as Piketty says. The above poll indicated that among Democrats, 90% say the government should do “a lot” or “some” to reduce the gap, but only half as many Republicans (45%) think the government should do something.

There are steps we can take in New Jersey. Although constitutionally we have a strong governor and currently the governor is a Republican who favors corporations and the wealthy, we have learned that Christie does not always get his way. The legislature and voters overrode him by raising the minimum wage, as has the judicial branch on marriage equality, housing, and education. The legislature has stood strong against Christie’s effort to pack the court and has launched a vigorous Bridgegate investigation.

“The main forces [which lead to reduction in inequality] are diffusion of knowledge and investment in training and skills,” Piketty says. These are forces that are often unavailable or too expensive for many. Below are some steps we can take.

  • In N. J. we should institute universal pre-school, subsidized for those who can not afford it, as early learning is critical for future success. Only 28 percent of four-year-olds are enrolled in public pre-school in New Jersey. There is a growing movement here promoted by Barbara Buono and others. New York City is moving in that direction, and nationally President Obama wants to fund it with large grants. It should be a no-brainer.  

  • Although N. J. schools rank high nationally, many countries have swept ahead of the U. S. The OECD is out with new global rankings of how students in various countries perform. The U.S. slipped from 25th to 31st in math, from 20th to 24th in science, and from 11th to 21st in reading. More funding and higher standards for teachers and curriculum are needed. Even Christie’s desire of extending the length of school hours and days, albeit unpopular, would be beneficial.

  • The cost of a college education today and the likelihood of incurring a mountain of debt can only perpetuate inequality. More scholarships, lower interest loans, and reduced spending on the part of colleges are necessary steps. For many years California pioneered a high quality, low priced, state-funded higher education system. With the recent mega merger of Rutgers and Rowan there is hope of attracting more research and well regarded faculty while achieving cost savings, although only time will tell how the merger will fare. New Jersey lawmakers last month “proposed a package of 20 bills designed to cut tuition, increase graduation rates and make schools more accountable.”

  • As fewer manufacturing jobs are available and new jobs require new skills, it will be those states which provide training that matches the new needs that will most succeed. New Jersey should be one of them. Senate President Steve Sweeney recently introduced legislation that would “offer priority to people who have experienced long-term unemployment. A minimum of 50 percent of funding for unemployed worker training would be put aside for employment training programs at community colleges.” Matching the training with the needs of local companies is important.

    Naturally the above steps require additional funding which will be discussed later, as will other actions to reduce inequality.  

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