Reducing Economic Inequality Requires Attention to Political Inequality and Focus on Policy

A 2015 article, “Income inequality in the U.S. from 1950 to 2010: The Neglect of the Political,” written by Holger Apel from Erasmus University, Rotterdam (Netherlands), chronicles the importance of including politics and policy in any strategy for addressing economic inequality.

The abstract for Apel’s article reads:

Based on the empirical observation of a global trend towards increasing income inequality across developing and developed economies, this article analyses the causes of increasing income inequality. Surprisingly, the role of institutions and policies with regards to rising income inequality have been under-researched. A case study of the U.S. from 1950 to 2010 reveals the substantial role of political institutions in increasing and perpetuating income inequality. Policies have a major impact on the distribution of income and thus influence income inequality. The case study reveals empirical evidence of two trends which are politically induced and reinforce income inequality. First, stagnating real wages for the majority of the population despite increasing productivity due to anti-labour policies which undermine collective bargaining. Second, increasing accumulation of wealth at the top of the income distribution through decreasing taxes for high incomes and corporations.

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