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Exceptionally Unequal: US Income Inequality in Comparative Perspective

Exceptionally Unequal: US Income Inequality in Comparative Perspective

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Published by Joseph Hines

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Published by: Joseph Hines on May 02, 2012
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Exceptionally Unequal: 
US Income Inequality in Comparative Perspective
Joe Hines
Over the past forty years, the US has seen a steep increase in income inequality,even as many other advanced democracies have seen their income distributiondecline or remain steady. A country’s income distribution results from domestic political decisions, as countries have similar levels of inequality before taxes and redistributions but vastly different levels afterwards. Scholars have offered various explanations for why income inequality has risen in the U.S, including theunrepresentative nature of American political institutions, Americans' attitudestoward inequality, declining levels of unionization, and the partisan polarizationof elites. This paper explores the merits of these explanations from a comparative perspective. First, I find that the although the American political system has thehighest number of anti-majoritarian features among advanced industrialdemocracies, those features have not changed significantly over time are not sufficient to explain why income inequality has increased in the U.S. Second,although Americans may be somewhat more permissive about economicinequality than Europeans, Americans' attitudes have remained largelyunchanged over the past 35 years and so cannot during the increase in inequalityduring that period. Third, the low percentage of workers covered by collectivebargaining agreements in the United States compared to other democraciesbolsters the argument that the decline in unions contributes to rising incomeinequality. Finally, the most striking correlation has been the increase in political polarization in Congress. This polarization has made it inordinately difficult to pass legislation that would lessen inequality.
Originally, it was Europe that was unequal. In 1831, Alexis de Tocqueville visited the UnitedStates to report on the progress of democracy, later published as
 Democracy in America
. As aFrench aristocrat, Tocqueville analyzed American democratic institutions to inform Europe’spolitical institutions. America’s love of equality struck Tocqueville as unique, a factor heattributed to the country’s democratic nature. In his opening paragraph, Tocqueville noted that“in the United States, nothing struck [him] more forcefully than the general equality of conditions” (Tocqueville 1). Although most developed in the United States, in Tocqueville’s viewof the progress of civilization, “we shall scarcely meet with a single great event, in the lapse of seven hundred years, which has not turned to the advantage of equality” (Tocqueville 3). TheEuropean aristocrat was diminished as the American citizen ascended. A new era of equality,stustained through democratic institutions, would prevail. Tocqueville believed, with sometrepidation, that the role of a new political science was to guide the inevitable march towardsequality.
Over the past the last forty years, the only inevitability about equality in the US, at leasteconomically, has been its steady decline.
 Democracy in America
contains many prescientobservations, but Tocqueville’s theory about an irresistible progress towards greater equality of conditions led by the US has not fared well. Today, Tocqueville’s old, aristocratic Europe issignificantly more equal than the United States. The income gap narrowed after WWII andremained equitable until the late 1970s. Since then, the difference between the rich and poor inthe US has steadily increased. This increase has been more pronounced in the United States thanany of its democratic and developed peers.

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