Lawmakers and government officials talk a good game about income inequality. But they impose policies that raise household costs, discourage employment, and kill opportunity.
J.D. Tuccille writes:
“Income inequality in the United States has increased significantly in the last four decades,” Leilani Barnett of the Federal Reserve Bank of San Francisco wrote last week for the California Economic Summit.
And, it turns out, the activist government interventions in the economy favored by the people most concerned about the increasing gap between rich and poor are probably making things a hell of a lot worse.
To back up a bit, not everybody agrees that income inequality in itself is an enormous concern. Writing for Reason, Ronald Bailey has pointed to research demonstrating that income mobility remains healthy, with Americans continuing to move beyond the socio-economic ranks into which they were born. “Results provide very little support for the hypothesis that inequality shapes mobility in the United States. The inequality children experienced during youth had no robust association with their economic mobility as adults,” reports a 2014 paper he cited.
Still, the growing gap between the wealthy and the poor is a preoccupation in many circles—particularly among people who favor activist government economic policies to rectify the situation. So it’s interesting when the Federal Reserve Bank’s Barnett adds that “One factor contributing to this trend is the increase in involuntary part-time workers,” and then reports that employers tell researchers they’ve turned to hiring part-time workers instead of full-timers because of the costs associated with employee benefits, health care, workers’ compensation insurance, and minimum wage hikes.
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