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  • Print publication year: 2009
  • Online publication date: October 2009

1 - Explaining Income Inequality

Summary

“Who gets what?” is arguably the most important question of political contestation. The answer to this question determines equality and inequality in society. Of course there are many forms of inequality. Political inequality, racial inequality, social inequality, power inequality, and economic inequality, to name a few, have received attention from journalists, pundits, and social commentators, as well as scholars from a variety of academic disciplines (Danziger and Gottschalk 1995, Harris et al. 2004, Johnston 2007, Keister 2000, McCarty et al. 2006, Page and Simmons 2000). While various forms of inequality are almost certainly interconnected, this book explicitly examines one specific form of inequality – economic inequality.

I focus on income distribution as a primary indicator of economic inequality. The amount of inequality present in the income distribution presents an empirical answer to the question of “Who gets what?” I assess the (national) government role, the actions and policies by which government balances – or unbalances – the scales of equality. Much of the story of equality and inequality must be a tale of changes in a market economy. But an important and often neglected part of the story concerns government and how policies benefit some people at the expense of others. That is my focus.

When Richard Nixon took the oath of office in 1969, he inherited an economy in which American incomes were more equal than when his predecessor took office, more equal in fact than ever before.

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