Cleveland and Philly Rank High in Economic Inequality

It is symbolic and ironic that the conventions of the Democratic and Republican parties are being held in two cities that are high on the list of metropolitan areas with the greatest economic inequality.

According 2014 data, Philadelphia and Cleveland are ranked numbers 15 and 16 respectively among cities with the greatest economic inequality. Philadelphia has a Gini index of .4738 and Cleveland is not far behind at .4729. The index ranges from .0000 which means all households have equal income to 1.0000 which indicates that one household has all of an area’s income. Not only are they near the top in economic inequality, Philadelphia and Cleveland are also among the most economically segregated major cities. The poor are increasingly being isolated into poor communities.

Both metropolitan areas are microcosms of the unequal distribution of economic resources in the United States and symbolic of all that is wrong with this society. You would think someone might use this reality as a platform to promote policies that address these inequities. Maybe I just missed it. One has to wonder if either party considered these circumstances before selecting these cities for their conventions. The obvious answer is: they were not selected for economic reasons; they were selected for political reasons. Pennsylvania is a crucial swing state for Democrats and we know that no Republican has won the presidency without winning Ohio.

There are items in the Democratic Party platform that address economic inequality. Bernie Sanders was able to get the party to acquiesce to the call for a $15 federal minimum wage, the addition of a public option to the Affordable Care Act and for free public college education for families with incomes up to $125,000. Other planks advocate for policies that reward employers that provide living wages and good benefits. Support for policies that encourage and facilitate union membership and fight against “right to work” laws that discourage union participation. Another calls for the creation of good jobs by restoring the nation’s infrastructure and the creation of a national infrastructure bank

Major changes to the Republican Party platform in 2016 focuses on social issues—defense of heterosexual marriage, refusal to condemn discrimination of the LBGTQ population, reaffirmation that God’s law (natural rights) supersedes laws of the state, encourages teaching the bible in public schools, adds support for the building of Donald Trump’s wall, and describes coal as a source of clean energy. One has to look at the 2012 platform to get a sense of the GOP’s economic priorities. Republicans continue to promote free market enterprise, promising to grow the economy through tax reform. In the recent past, that has meant giving tax breaks to the wealthy—the job creators who, according to supply-side economic theory, will invest those profits in creating new industry and new jobs. Hasn’t happened yet in the 30-plus years since the Reagan tax cuts, but the 2016 Republican platform doubles down on these theories by proposing full reinstatement of the Bush tax cuts, and an additional 20 percent across-the-board cut of the marginal tax rate which will result in a greater share of tax breaks going to the most affluent Americans. They also propose totally eliminating estate taxes which will help lock in economic inequality by allowing the wholesale transfer of wealth from one generation to the next.

While, in my humble opinion, the Democratic platform will do more to put the brakes on out-of-control income and wealth inequality, it offers little remedy to reverse the trend. That would require changing the tax code to be much more progressive and significantly raising marginal rates on top income earners. Progressive taxation is intended neither to punish success nor redistribute income and wealth. Since we’re talking bible here: To whom much is given, much is required. The poor and dwindling middle class alone cannot pay for the roads, bridges, and airports needed to be rebuilt, or the massive defense budget needed to protect the country.

It would be ironic if these conventions transpire without substantive attention given to economic inequality. Much of the anxiety unsettling the middle class is due to their stagnant wages and declining resources as the bulk of economic gains go to a very affluent few at the top of the ladder. The poor are all but forgotten. Given the state of affairs in Philadelphia and Cleveland and the fact that these conventions will be injecting millions of dollars into the local economy, why not set aside a small slice of the revenue for North Philadelphia or Cleveland’s East Side? Don’t hold your breath.

Written By Charles E. Lewis Jr., Ph.D
Congressional Research Institute for Social Work and Policy

Cleveland and Philly Rank High in Economic Inequality was originally published @ Charles Lewis – Congressional Research Institute for Social Work and Policy and has been syndicated with permission.

Photo by alim_archi