Is America Having the Wrong Conversation About Income Inequality?

By now, no one is debating the fact that economic inequality has grown substantially in the past few decades. It seems that almost every day there’s a new report showing that incomes and wealth continue to grow for the richest while everyone else struggles to make do.

But when it comes to solutions, the conversation stalls.

That may be because people are focusing on the wrong parts of of inequality, says Kevin Leicht, the head of the University of Illinois at Urbana Champaign’s sociology department. In a paper recently published in The Sociological Quarterly, Leicht writes that the conversation about inequality in America revolves too much around disparities between groups—say, the earnings gap between white and black workers—and not enough on the disparities within them. He argues that most conversations about inequality distract from finding practical solutions, and suggest a misleading narrative about how to get ahead in America.

I spoke with Leicht about his paper and his views on better ways to think about dealing with inequality. The interview below has been lightly edited for clarity.

Gillian B. White:  You start off your paper by saying that sociologists have been somewhat remiss in how they approach studying inequality. Can you talk to me about why you say that?

Kevin Leicht: We have ignored growing inequality within race and gender groups and have focused more on closing gaps between race and gender groups.  Social mobility in the U.S. has ground to a halt. So we still see overrepresentation of white men in elite status positions, but we’re focusing on making those elite positions more diverse, and we’re forgetting about the rest of the economy.

White: You say gender and race are not driving factors of inequality. I think that feels confusing at a time when people hear a lot about the growing wealth gap between races and there’s evidence that the gender-wage gap has stagnated. Can you walk me through your claim that those aren’t critical issues?

Leicht: The wealth gap is very real, and is driven a lot by housing segregation, which leads to the inability to build wealth through homeownership. The race and the gender differences in wealth accumulation are very real, and the paper doesn’t address that.

But if you look at all of the gaps that are happening with regard to income, the gender and racial gaps over the last 30 years or so, perhaps 40 years, have all shrunk. In the process of that happening, there’s been growing inequality within all of the demographic groups. What I would further argue is that the growth in the inequality within demographic groups has made it difficult to close the gender and racial gaps that are left. I’m not saying that there’s no racial and gender inequality, but we’ve ignored other types of inequality, and those have gone berserk.

White: What types of inequality specifically have gone berserk?

Leicht: Access to high-quality jobs, increasing amounts of poverty, and downward mobility. The tails of the income distribution for each racial and ethnic and gender group have been moving away from each other almost by the day, and yet we continue to focus on the gaps between group A and group B.

Kevin Leicht’s Three Sample Scenarios of Inequality

White: You bring up this notion that you call “the politics of displacement,” and you say it's one of the reasons that the country isn't adequately coping with inequality.  Can you explain what that theory is and its relation to talking about inequality through the lens of social issues?

Leicht: The politics of displacement is the substitution of cultural issues for discussions of issues of economic fairness. So just when it looks like we’re going to pass a tax bill that gives the middle class tax relief, it's time to talk about abortion, sex education in the schools, multilingual education. Just about anything to distract attention from rising inequality and the complicity that government and public policy has in producing it.

White: Speaking of politics, you identify several issues that contribute to growing income inequality, including political sway in the form of lobbying, rent-seeking, and under-investment in public good. Is there one factor you think is more problematic than the others?

Leicht: I think one of the biggest things is disinvestment in public goods. When you produce extreme amounts of inequality, then there's a segment of the population that can basically purchase private access to just about anything that they want. They can live in a gated community, they can have a private police force, they can send their children to private schools, they can send their high-school graduates to private universities. They can set up their own enclave neighborhoods. So when inequality gets to a certain extreme and you can opt out of all those things, then suddenly the welfare of your neighbors is not something you have to deal with or take care of.

White: And you say that, for instance, just helping more kids get into those fancy schools won’t necessarily help—that education isn’t a sure fix?

Leicht: It’s not entirely clear that the labor market is actually producing the quality jobs that college graduates are supposed to take. A lot of college graduates are taking jobs that don't require a college education. The second problem is that the value of a college diploma is inversely related to the number of people that have it. So if you increase the number of people with a college degree, the college-wage premium will probably disappear. Or it will only grow because the unfortunate few who don’t have a college degree will make practically nothing.

White: Are there any other commonly discussed fixes that you don’t subscribe to?

Leicht: There’s also this idea that inequality would shrink if the poor would simply get married. The people who are not married have different social characteristics than the people who are married. Simply marrying them off isn't going to make them better off because of their potential pool of spouses. The education argument is kind of an extension of that. Just because the people who have college educations now are better off than people who don’t, doesn't mean that if everybody who didn't have a college education had one, they would receive the same benefits in the future.

White: Okay, so what should the country be focusing on instead to realistically chip away at inequality?

Leicht: I think we need to focus more directly on labor-market policies that increase people's earnings and increase the steadiness of their jobs. In the end, fighting income inequality is about fighting income inequality. It's not about closing educational gaps or getting more people married, or creating a diverse pool of Fortune 500 CEOs.

White: You write, “The basic legitimacy of the market system is eroded as the relationship between what you do and what you get becomes indirect and obscure.” I thought that was a really interesting point. Can you talk to me a little about how much meritocracy has already eroded?

Leicht: I think we’re quite far down that road. We all have a narrative about how to get ahead. I almost guarantee you if you tell me that narrative—get a college education, do this, do that—it now doesn't work. If it turns out that what you really have to do is go to college, and make sure your roommate is the next Mark Zuckerberg in order to get ahead, that's not a narrative. That doesn't work.

If where you end up is totally dependent on your parents, or a set of random circumstances over which you have no control, and there’s no individual description of how you get to a stable place in the economic system, then we’ve lost the narrative about how to get ahead. And that’s where things get dangerous.