Share/Bookmark

Discuss: Share in Our Policy Ideas

Friday, August 11, 2017

Inequality

William J. Arnone, National Academy of Social Insurance

Having recently completed my first year as the Academy’s Chief Executive Officer, I’ve reflected on my many interactions with Academy Members at our annual Membership meeting, Policy Conference, 30th Anniversary celebration, and other events that we have sponsored, as well as emails and phone conversations.

Among the questions most frequently posed to me are:

  • Why has the Academy chosen “inequality” as our overarching strategic theme and framework?
  • What does this mean for the Academy’s policy work?

Background
I first addressed this issue in a letter to the New York Times  published in February 2015.

Why?
After significant deliberation and discussion, the Academy’s Board of Directors voted in 2015 to position our policy work in an “inequality” framework. Our Board viewed then, and continues to view, inequality as the most pressing challenge to our country. Addressing it from a social insurance perspective is critical to our mission:  to advance solutions to challenges facing the nation by increasing public understanding of how social insurance contributes to economic security.

To prepare for our 2016 policy conference, we convened groups of experts to develop a base of facts and issues to address.

What Does This Mean?
Our 28th annual policy conference in January 2016 itself was titled Disparate Income, Wealth, and Opportunity: Implications for Social Insurance. Co-chaired by Kilolo Kijakazi of the Urban Institute (and a Member of our Board), Maya MacGuineas of the Committee for a Responsible Federal Budget, and David Colby, the conference – built upon two convenings on the same topic – ushered in the Academy’s new strategic focus on income and wealth inequality. Participants, including new and veteran Academy members, came together to share views from both sides of the aisle on income, wealth, gender, and racial/ethnic disparities and how social insurance and other public policies can play a role in mitigating them in fiscally sustainable ways. (A summary of the Conference, including conference materials, is available here.

The Conference’s keynote speaker was Peter Georgescu, whose new book, Capitalists Arise!: End Economic Inequality, Grow the Middle Class, Heal the Nation , focuses on inequality. We have featured his book at several Academy events in 2017.

In June 2016, expert panelists convened at the National Press Club for Advancing Equity and Inclusion through Social Insurance, three discussions that explored how public policies can bolster American family stability in an evolving economy. Recognizing how economic opportunity and mobility are affected by entrepreneurship, paid time away from work for caregivers, and the entrenched wealth divide between whites and people of color, panelists affirmed that social insurance programs provide a critical safety net for risk-taking, retirement planning, and family caregiving.

That same month, we honored William Spriggs as the recipient of the 2016 Robert M. Ball Award for Outstanding Contributions in Social Insurance. His career has been dedicated to economic justice and equality. In his acceptance speech, Bill offered a compelling vision of social insurance that addresses new and growing risks confronting the American people.

At our 29th annual Policy Conference in January 2017, we released our Report to the New Leadership and the American People on Social Insurance and Inequality. In this Report, we noted the following:

  • Income and wealth inequality have grown to historic proportions.
  • Social insurance has been an integral part of American life for more than 80 years, and arguably, will play an even bigger role as the population ages and automation, global competition, rising inequality and other developments continue to transform the economy and create new risks for workers and their families.
  • Social Security has a mitigating effect on inequality in the distribution of retirement wealth. Some observers note that there is reason to increase the progressivity of Social Security to compensate for two trends in inequality: 1) growing inequality in the distribution of income; and 2) growing inequality in longevity by income, or in other words, high earners living longer than low earners. Social Security’s role in mitigating inequality in retirement wealth is even more pronounced for people of color.
  • As policymakers weigh Social Security reforms, it will be critically important to take into consideration the growing inequality in the distribution of retirement wealth.
  • As the nation’s largest public insurer of low-income and medically vulnerable individuals and families, Medicaid can play an even stronger strong role in efforts to improve population health.

Some Salient Facts

  • Wealth inequality: By racial and ethnic lines: the median net worth of a White household was 13 times greater than that of a Black household in 2013, and 10 times greater than a Hispanic household, according to the Pew Research Center. For White households, median net worth was $141,900 that year, while it was $11,000 for Blacks and $13,700 for Hispanics.
  • Earnings inequality: A report from the Center for Law and Social Policy (CLASP) found that Black and Latino workers not only earn significantly less than workers do generally, but they are much less likely to have access to paid family leave and sick days. The combination of these factors makes it that much harder for workers of color to move up the wage and job ladder. About half of full-time workers of color made less than $15 per hour in 2013, compared to 39 percent of all full-time workers.
  • Social mobility: “Americans born at the bottom of the ladder are in fact now less likely to rise to the top than those situated similarly in most other nations…The proportion of children born at the bottom rung of the ladder who rise to the top as adults in the U.S. is 7.5 percent.” (Richard V. Reeves, Senior Fellow, The Brookings Institution, Dream Hoarders: How the American Upper Middle Class Is Leaving Everyone Else in the Dust, Why That Is a Problem, and What to Do about It (2017).

Where Do We Go from Here?

The Academy is introducing on our Website a new section dedicated to the theme of inequality. Our goal is to promote an ongoing robust debate about the role of social insurance in addressing this critical concern.

We welcome your comments and suggestions for future research below. And, as always, please don’t hesitate to be in touch with me (warnone@nasi.org) and Benjamin Veghte, the Academy’s Vice President for Policy (bveghte@nasi.org), with your thoughts.


William J. Arnone
Chief Executive Officer
National Academy of Social Insurance 
Direct: 202-243-7007
1200 New Hampshire Avenue, NW - Suite 830
Washington, DC 20036
www.nasi.org | @socialinsurance


 

All Comments

Post new comment

If you have an account, please login first so we can retrieve your information.

Your e-mail address is kept private and will not be shown publicly.
CAPTCHA
Please note that some comments are moderated, so it might take a few moments for your comment to appear on the site.