Concrete Steps Can Reduce Inequality

A minimum-wage hike, better preschools, apprenticeships, paid family leave, and a low-cost retirement savings plan can change the course for those Latinos overrepresented in low-wage occupations.

Let's face it: Most of us dream of a world where inequality would be a foreign concept. Unfortunately for us, inequality is our reality. We can see inequality everywhere, while walking down the street or going to the mall. For Latinos in the United States, economic inequality can be seen in the Hispanic poverty rate, which remains stubbornly high at 25.6 percent compared with the 9.7 percent poverty rate for whites.

While these numbers may seem quite discouraging, it is important to keep in mind that we can take concrete steps to decrease inequality and restore an economy that works for everyone, not just the wealthy.

As President Obama mentioned in his State of the Union address, focusing on increasing economic opportunity in the United States, both in the short and long term, will be a priority in 2014. This past December, President Obama explained his views on inequality in a speech presented by the Center for American Progress, arguing that reducing inequality goes hand in hand with working to improve the country's economy. In fact, the president reminded us that there is good evidence that the economy grows best when the entire population benefits, not just some parts of our society.

There are several key policies that the U.S. could adopt that would put this goal within reach, starting with proposals to increase the minimum wage from $7.25 to $10.10 and setting it to automatically increase over time. Doing so would directly address inequality and would disproportionately benefit Latinos, who are overrepresented in low-wage occupations. Although CEOs' salaries have gone up dramatically, earning 273 times more today than average workers, the wages of average workers have been stagnant. Increasing the minimum wage will help decrease this gap.

The math is simple: When employees are paid more, they spend more, thus increasing the demand for goods. This, in turn, leads companies and businesses to do better, allowing them to hire more workers and to pay higher wages.

As the president also mentioned in the State of the Union, making sure that all children can attend high-quality preschool is incredibly important to their lifelong success. According to research, about half of the difference in high school achievement can be explained by a child's experiences before the age of 5. Access to high-quality preschool is especially important for low-income children of color, who often begin kindergarten behind their peers. By providing access to high-quality preschools, we can give all children the necessary skills to succeed in school, graduate from high school and college, and have better opportunities to find and keep jobs that pay well as adults.

We also must create more opportunities for all students to learn and gain marketable skills after high school. One way to do this is by creating more apprenticeships opportunities, where young adults and students can earn an income, gain work experience, get training, even earn college credit. Research has shown that compared to workers who have not done apprenticeships, those who complete an apprenticeship earn an average of $300,000 more in wages and other benefits over their lifetimes.

Apprenticeships also help companies by providing skilled and experienced workers to fill projected job openings. And the time has come for us to give students the opportunity to refinance student loans, which will increase repayment, freeing up that money to be spent in other ways that could boost the economy.

One of the most important ways we can begin fighting inequality is to concentrate on people's lives at home and offering paid family leave for everyone. Today, only 12 percent of workers have paid family leave through their employers, and low-wage workers are particularly unlikely to have it. We can start to level the playing field by giving all parents — not just the lucky few — better opportunities to care for their children, which can result in better success in school.

Finally, with only half of all Americans having a retirement plan at work, we have to combat income inequality in retirement. To do so, we should give all workers a new low-cost option to save for retirement that would enjoy low fees, pooled risk, and professional fund management. We should also change how the tax code works so the wealthy do not get better tax breaks than low-income families to save for retirement.

It won't be easy to turn back inequality, but there are steps we can take now to move in the right direction. If we can create an economy that works for all Americans, we can unleash our full economic potential. Let's give working Americans a raise, children the support and education they need, young adults the skills that can help them land a good middle class job, and workers the chance to save for retirement. As President Obama explained, if we work together, we won't just create a more equal society, we'll create a more prosperous one as well.


The Next America welcomes op-ed pieces that explore the political, economic and social impacts of the profound racial and cultural changes facing our nation, particularly relevant to education, economy, the workforce and health. Email us. Please follow us on Twitter and Facebook.