Addressing Inequality at the Root:

Almost half of all workers earn under $15 an hour and one in every seven Americans - 43 million people - live below the poverty line. A new report by the Next System Project, a project of the Democracy Collaborative, and the Institute for Policy Studies, "Reversing Inequality: Unleashing the Transformative Potential of an Equitable Economy," offers a more critical explanation for inequality and systemic solutions that can help move us forward.

The report finds that over the past four decades, the U.S. economy has doubled in size but the bottom-earning half of all U.S. households has seen no income gains. While there is now widespread understanding that extreme income and wealth inequality is growing and has negative impacts on society, most proposed solutions fail to address deeper systemic drivers, instead focusing on technological change and globalization which have supercharged inequalities, but are not the primary drivers.

This report explains how the rules governing the economy (like productivity gains flowing to investors) have been distorted by power differentials and political factors.

"Income inequality is the most pressing issue of our time. Public health, education, racism, and environmentional degradation all have roots in the systemic inequalities deeply ingrained in our economic model," report author Chuck Collins said.

The report outlines some key policy interventions to reverse this destablizing trend. They fall into four categories, including policies that:

• Lift the Floor, establishing minimal standard of living and safety nets
• Level the Playing Field, by ensuring investments in public goods and elimination of the distorting influences of power and privilege
• Deconcentrate Wealth, through interventions that directly reduce the concentration of wealth and power
• Rewire the System, to undercut inequality drivers

It's hard to imagine many of these solutions moving forward at the national level in the current political environment, but this report identifies opportunities to incubate them in states and localities and lay the groundwork for a future political realignment by focusing on "pressure points."

Three examples in the paper are:

• Dividends for all - linking common wealth sources of revenue to programs that expand economic stability
• Taxing excessive carbon solution and directing revenue to investments in renewable energy, green infrastructure and just transition efforts
• Expand tuition-free higher education by creating education trust funds funded by progressive taxes on wealth

This report is the first in a new series by the Next System Project called Transformations: Systemic Challenges and Solutions in 21^st Century America.

To read the entire paper, click here.

Learn more about the Next System Project here.

Learn more about the Institute for Policy Studies here.