How Do We Address the Wealth Gap in America?

The board game Monopoly turns 80 this year. Since 1935 over 275 million versions of the game have been sold in 111 countries and translated into 43 languages. The goal of the game is to acquire exclusive possession or control of the board’s wealth via property and cash.  

But the internationally recognized capitalist principles of this “winner-takes-all” game harken back to the era of the Great Depression and a time when the top 10 percent of Americans possessed 84 percent of the country’s wealth. A recent report by the Organization for Economic Cooperation and Development (OECD) reveals some distinct similarities between 1935 and 2015 as 10 percent of Americans now possess 76 percent of the country’s wealth.

It is important to not confuse a wealth gap with an income gap: your income is your earnings (salary or investments) while your wealth is made up of what you have accumulated (savings, house, car) minus the debts.

Earlier this month, the Initiative on Catholic Social Thought and Public Life at Georgetown University hosted a symposium on the moral, political, and policy imperatives of overcoming poverty. The keynote speaker, Professor Robert Putnam of Harvard University, shared research from his recent book, Our Kids: The American Dream in Crisis.

Putnam makes the argument that prevailing gaps of income and wealth are emblematic of a larger opportunity gap that exists in American society. This opportunity gap takes the heaviest toll on America’s children and is manifested in at least three different ways.

First, a gap in public investment contributes to decreased opportunities. The discrepancy of investments in things like extracurricular activities was identified as having a profound impact on students with parents forced to decide on paying for lessons or equipment and paying the bills.

Second, the opportunity gap is widened as a result of the time spent (or not spent) with children. Putnam’s research indicated that the amount of social interaction a child has with parents or guardians significantly influences the child’s performance in school.

Third, a gap in the breadth and depth of the safety net for children exposes the advantage that wealthier children have when they “do something stupid.” Putnam argued that social airbags deploy when wealthier children make mistakes whereas poorer children rarely possess the means to actualize second chances.

In short, a political system that focuses only on the middle class is not inclusive.

Agreement on the antecedents, nature, and outcomes of this diagnosis is far from conclusive though. Distinguished panelists at the event like Washington Post columnist Michael Gerson suggested that a “polarization of diagnoses” rather than a polarization of ideology is what needs to be addressed prior to proposing solutions addressing poverty.

This idea of opportunity, however, seems to resonate across political affiliation as Congressman Paul Ryan (R-Wis.) recently proposed the Republican anti-poverty policy titled, “Expanding Opportunity in America.” Rep. Ryan’s plan consists largely of expanding the earned income tax credit (which I have argued is effective), an income supplement for low-wage workers, and consolidation of 11 poverty programs into block grants administered by the states. Inherent in this plan and others is the tacit acknowledgement of complexity that poverty presents policymakers.

Nuanced complexities do not always garner votes though. Michael Gerson suggested during the summit that issues of poverty are a “durable set of problems” that simply cannot be addressed by a political system saturated in rhetoric about the middle class. With just over a year and a half before the 2016 presidential election, the candidates have certainly begun jockeying over who holds the most legitimate middle class credentials. Early frontrunners such asJeb BushHillary ClintonMarco Rubio, and Scott Walker have all made their own unique appeals to the middle class. Gerson suggests that these “constant middle class mantras” have a heavy influence on political discourse that fails to address a whole of society approach. In short, a political system that focuses only on the middle class is not inclusive.

Public policy solutions to the wealth gap certainly merit a robust discussion of options that include more than canned language about the middle class. During the summit Putnam offered three broad routes candidates might take. First, a boost in job wages such as the recent vote to raise the minimum wage in Los Angeles to $15 per hour. Second, providing options for early childhood education such as the president’s proposal for $1 billion to be invested in public-private programs. Third, youth mentoring programs like the Chicago CHAMPS program which was recently highlighted at the White House student film festival and provides an opportunity for assistance with homework and life coaching.

Elizabeth Magie, the early 20th century progressive who influenced what is now known as the Monopoly game, actually conceived of an anti-monopolist game with rules that rewarded all when wealth was created. Discussing how her game was meant to be a political statement, Magie said, “It might well have been called the ‘Game of Life,’ as it contains all the elements of success and failure in the real world, and the object is the same as the human race in general seem to have, i.e., the accumulation of wealth.” Indeed, figuring out how to create wealth for all and, especially our kids, may require new rules for the American game of life.  

-Jeremy Taylor serves as a public sector strategist for the federal government. He is a Research Fellow with Young Professionals in Foreign Policy (YPFP), a Pacific Forum Young Leader with the Center for Strategic and International Studies (CSIS), and is currently pursuing a PhD in organizational leadership . You can follow him on Twitter @jerdavtay. Photo by William Warby.