Lecture 19 Inequality - A Challenge to Democracy?

Civil Rights Act of 1964 Outlawed discrimination in public accommodations under the Interstate Commerce Act No tax dollars could go to organizations that discriminated Outlawed job discrimination on the basis of race, religion, national origin, or sex Created the Equal Employment Opportunity Commission (EEOC) to enforce these rules

Political Impact of Hurricane Katrina Widespread sympathetic media coverage of race and poverty of storm victims: Newsweek article FEMA and director Michael Brown discredited Some evidence of racism in the policy response to Katrina Negative media coverage of Bush Administration Decline in Bush’s popularity

Affirmative Action Equality of opportunity vs. equality of outcomes Requires businesses and universities to keep records of minority hiring and to increase efforts to recruit underrepresented groups Legally, quotas can only be imposed if a court finds proof of intent to discriminate

Challenges to Affirmative Action Politically, “quota” label is used to discredit any special treatment of a minority group. Claims of “reverse discrimination” against males, whites and Asians Opposed by most whites and some blacks Now banned in some states: California, Texas 2005 Bollinger decisions upheld “diversity” as a valid factor for admissions at the University of Michigan. Strongly supported by business groups and the military.

Conflict over Social Policies Public Democrat Policy President Republican Congress

An economic theory that the federal government's only role in the economy is to ensure a stable supply of money. Minimal taxation and regulation Laissez-faire

Conservatives/Republicans Support of laissez-faire, operation of markets, individualism Government interference with markets hurts incentives to work and save Help the poor through private charity, churches, education

Liberals/Democrats Markets create winners and losers In a complex world economy, even hard work does not guarantee a job or savings Children should not suffer because their parents are unable or unwilling to work Government welfare programs help the economy by maintaining consumer demand

Became President in 1933 During the Great Depression the U.S. suffered 25% unemployment. End of public support for laissez-faire and balanced budgets Roosevelt’s Administration instituted the New Deal: help for the unemployed, support for labor unions, federal minimum wage law FDR used public works programs and government spending to spur on the economy FDR

Social Welfare Policy Government programs that provide goods and services to citizens to improve the quality of their lives. 17-3b The Evolution of Social Welfare Policy

Social Welfare Programs Income maintenance programs: welfare, Social Security Nutrition programs: WIC Health programs: Medicare Housing programs: Section 8 Education programs: ESEA Many provided by state or local governments

Provided social insurance programs for elderly and disabled Established programs to help blind, elderly, and dependent children Financed by taxes on earnings paid by both employers and employees: 6.15% of earnings up to $82,000 Social Security Act of 1935

Tax Policies Regressive: higher taxes on low incomes Sales, excise, and Social Security taxes Progressive: higher taxes on high incomes. Progressive income tax, estate and wealth taxes, capital gains tax Proportional: tax all incomes/persons equally Flat tax, head tax, most property taxes Most state and local taxes are regressive

Distribution of Federal Spending

Federal Spending, in $Billion (*Interest rates were at historical lows in ) *

Types of Social Programs Entitlement: available to anyone who meets the criteria of age, citizenship, veteran, or disability. More political support but higher total cost Means tested: only available to people who can document low income. Less political support but targets assistance on the needy.

A public assistance program that provides publicly subsidized health care to low-income, disabled, and elderly Americans. Means tested Medicaid A social insurance program that provides basic hospital insurance for doctors' bills and other health care expenses for people over sixty-five. Not means-tested. Medicare

“Welfare recipients have more children than the general population.” Welfare Myths

“Most welfare mothers are black.” Welfare Myths

Why Inequality Has Grown in the US since the 1970s: Politics Weakness of labor unions to demand better wages or benefits Increasing influence of business: PACs, campaign finance, pre-primary Increasing Republican dominance of federal and state elected offices The poor and minorities are harder to organize, especially for non-presidential elections Declining voter turnout Public cynicism about government programs discourages political involvement

Why Inequality Has Grown in the US since the 1970s: Policies Less progressive federal income tax rates Higher rates for regressive state taxes Lower taxes on wealth, estates, or capital Cuts in welfare spending and stricter rules for eligibility Little increase in federal minimum wage Many social programs benefit people who are NOT poor: veterans, those over 65

Why Does Poverty Persist in the US? – Newsweek article Racism and negative stereotypes 8% of whites are poor, but 25% of blacks, 22 % of Hispanics Family structure: single mothers Low and stagnant wages Minorities have fewer assets: housing, savings, education Isolation in housing, schools, and social networks

Main Arguments of APSA Task Force on Inequality Inequality of income and wealth has increased in the US since 1970 Income inequality is linked to political inequality in voting, organizing, campaign contributions Politicians of BOTH parties respond to the politically active: business, the wealthy, the elderly Increasing inequality is bad for democracy

Reforms to Increase Political Equality Enact policies to benefit the needs and values of ordinary people, like health care Improve economic conditions for minorities Encourage non-governmental institutions like unions, churches, and political parties Better media coverage of political issues, candidates, and policy options