United States Income, Wealth, Consumption, and Inequality, by Diana Furchtgott-Roth (Ed.). Oxford University Press, ISBN 9780197518199, 2021, 293 pages, $75.00, hardback.
Although Thomas Piketty is not a contributing author to this book, his economic research on income inequality is the background for much that has been contributed by the 15 collaborators Furchtgott-Roth has gathered in these 10 somewhat technical, yet accessible chapters. Piketty analyzed U.S. tax return data and found that middle class median incomes have been in decline since 1979, giving rise to an increase in income and wealth inequality. Most of the chapters are attempts to explain why this is an incomplete and unfair analysis of the U.S. economy.
Self-described as sharing a bipartisan perspective, the progressive viewpoints are limited to the first three chapters, which address various definitions of income, provide an update on Piketty’s analysis using post-tax data and international comparisons, and propose a series of modest short-term and long-term policy proposals to increase economic opportunity. The remaining chapters, although independently produced and somewhat inconsistent in the details, present a more conservative interpretation in accord with U.S. government economic analyses.
Chapters 4 (income) and 5 (wealth) present the cases against Piketty using different data sets. Income from labor and market investments have declined in line with Piketty, but adjustments for employer supported benefits (retirement and health care) and government supports (Social Security, Medicare, and Medicaid) have arrested the decline. Post-tax analyses show that wealth inequality has grown at much smaller rates than income-based studies suggest. What is clear from these chapters is that the bottom 40% of Americans have become more heavily reliant on government transfers since 1969.
Social workers interested in how social trends contribute to an understanding of income and wealth disparities will want to focus on Chapter 6. The movement of women into the workforce, divorce, assertive mating, tax rate changes, household size, wage earners per household, and several other factors are used in this chapter to help explain increases in income and wealth inequality, assertions that go unchallenged in this chapter.
Chapters 7 and 8 return to the anti-Piketty theme by demonstrating that race and gender disparities are explained by variation in labor market experience and skill detriments (Chapter 7) and that all quintiles have experienced increases in wealth since 1983 (Chapter 8). The problem with wealth inequality rising is, from this perspective, not a consequence of income decrements but is due to the disproportional negative influence of the 2008 Great Recession on the bottom 90% of Americans.
Chapter 9 provides a summary of public opinion polls related to wealth inequality since 1935 and demonstrates American support for increased opportunities and even income equality, but without support for government-imposed equality through redistribution programs. Chapter 10 argues that income inequality is the product of an unmet demand for highly skilled workers in America that effectively penalizes low skilled workers who are also victimized by low skill immigration, global trade with low skilled countries, and lack of improved productivity in service sector jobs.
As a progressive, I can recommend this book only to those who wish to understand conservative excuses for opposition to progressive ideas like a universal basic income, living wage legislation, decoupling of health insurance from employment, and cost-free college educations. Nibbling around the edges of our current economic system by tweaking existing government programs, protecting the accumulated wealth of the top 1%, denying the clear evidence of race and gender disparities, and defending the status quo will never recreate the opportunity structures to build an inclusive and fair economic system for all Americans.
Reviewed by Peter A. Kindle, PhD, CPA, LMSW, Professor of Social Work at The University of South Dakota.
