Lee and UC Berkeley institute take on income inequality

Rep. Barbara Lee (D-Oakland) and U.C. Berkeley’s Haas Institute for a Fair and Inclusive Society are teaming up today [Wed/10] in Washington DC to release and discuss the institute’s first policy prescriptions for reducing inequality.

The policy brief—the first to be issued by the Haas Institute—will introduce research-based approaches suggested by a diverse array of economists looking at inequality through different lenses.

The policy brief calls for the integration of regions through land use rezoning to decrease inequality, an increase in public investments in preschool programs, raising the minimum wage, and the reformation of unfair tax policy that favors the wealthiest 1 percent.

“Inequality is a defining issue for America’s future,” John Powell, director of the Haas Institute, said in a press statement. “The good news is that we know variation in inequality and mobility imply that local, state, and federal policies can have an impact. Therefore, the solution is within reach, but only if policymakers learn from and apply researched based initiatives.”

While this is the Haas institute’s first policy brief, it is far from being Lee’s first foray into the issues of inequality. In fact, it’s become an area of her expertise. Lee, will give this morning’s keynote address, has been introduced two bills to curb the growth of inequality.

The first, the Income Equity Act (H.R. 199), would limit the tax deductibility of executive compensation packages. Currently, the more a firm pays its CEO, the more the firm can deduct from its taxes, leaving “cash-strapped taxpayers picking up the tab,” said Lee in a 2013 blog post.

“Despite record corporate profits, none of it is being shared with the American working class—the strongest work force in the world,” Jim Lewis, Lee’s press director, told the Guardian. “We’re pushing for research-based initiatives that are realistic when implemented.”

Locally, state Sens. Mark DeSauliner (D-Concord) and Loni Hancock (D-Oakland) introduced a pay-disparity bill (SB 1372) in April, which would tax companies with a wide income gap between CEOs and workers, and give tax breaks to companies with lower income disparities.

The second, Lee’s Pathways Out of Poverty Act (H.R. 5352), addresses unemployment in minority communities, namely African Americans and Latinos. It aims to create good-paying jobs and increase social mobility while strengthening the social net for those still struggling.

Research based solutions seem like a perfectly practical way to go about solving our evident wealth gap, but “1 percenter” and “the 99 percent” have only been part of the national lexicon since 2011’s Occupy protests.

A Gallup poll from January this year revealed that Democrats and independents are overwhelmingly dissatisfied with income and wealth distribution, as well as a majority of Republicans. The poll also found that only slightly about half of Americans are satisfied with the opportunity to get ahead by working hard.

“For many years, income inequality was viewed as an important factor and byproduct of growth,” said Powell. “That has been largely discredited by economists. It’s not a necessary byproduct of technological advances and globalization.”

All of this comes at a time when the wealth gap in the United States—and especially in the Bay Area—is reaching exorbitant proportions.

In June, the San Francisco Human Services Agency released a report stating that while the rich get richer and the poor get poorer, the city’s middle class—those earning around the median household income of $72,500—is disappearing altogether.

A recent study by the Brookings Institution revealed that between 1990 and 2012, the city’s middle class has shrunk from 45 percent of the population to 34 percent.

“There’s no need for this kind of gap, it’s unsustainable,” Powell said. “We need to work on a local level, especially when we have a more liberal legislature in California. Closing the gap can enhance economic growth. It can bring the country together.”