What “Experts” Miss about Economic Inequality
That’s a question USA Today posed to three “policy experts on the left and the right” in this recent article. The responses, while unsurprising, were nevertheless disappointing.
For libertarians, economic inequality itself is not problematic, as long as it is in the context of an unfettered market economy free of government privileges and interference.
Of course, that’s not what we have. But instead of advocating for a more free economy to address inequality, the “experts” consulted by USA Today advocate for more state interference that would likely make inequality worse while ignoring perhaps the largest source of inequality, the Federal Reserve.
First up is Scott Winship of the American Enterprise Institute, who focuses on income mobility. Winship points out that if every child had equal economic opportunity, then we would see an equal percentage among races of children remaining in the bottom fifth of income when they become adults.
Winship notes that roughly 30 percent of white children remain in the bottom fifth in adulthood, while the figure for black children exceeds 50 percent.
Absent from Winship’s observation, however, is the recognition of why this might be the case.
According to Pew Research, 30 percent of single mothers and their families are living in poverty compared to 8 percent of married couples and families. In other words, children are nearly four times as likely to be living in poverty in a single mother household compared to a household headed by a married couple. Meanwhile, 58 percent of black children are living with an unmarried parent, compared to 24 percent of white children and just 13 percent of Asian children.
Moreover, the welfare state has facilitated a dramatic rise in single parent homes. Nationally, since LBJ’s Great Society ratcheted up government welfare programs in the mid-1960s, the rate of unmarried births has tripled.
Single parenthood fueled by the welfare state is an outsized source of inequality, but the welfare state escapes any blame by the “expert” Winship.
To his credit, Winship in his recommendations mentions in passing that “shoring up marriage where it has become an anomaly” would help reduce inequality, but he fails to target the welfare state as the major culprit.
His other recommendations include
Article from Mises Wire