Inequality is front & center at SOTU

President Barack Obama delivers the State of Union address before a joint session of Congress in the House chamber Tuesday, Jan. 28, 2014, in Washington. (AP Photo/Larry Downing, Pool)

President Barack Obama delivers the State of Union address before a joint session of Congress in the House chamber Tuesday, Jan. 28, 2014, in Washington. (AP Photo/Larry Downing, Pool)

President Obama’s fifth State of the Union address and the Republican and Tea Party responses seemed to agree on one point. They all said that inequality is a problem in this country. What that means, and what to do about it is another story.

In his address, President Obama said:

“Today, after four years of economic growth, corporate profits and stock prices have rarely been higher, and those at the top have never done better. But average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by – let alone get ahead. And too many still aren’t working at all. Our job is to reverse these trends. It won’t happen right away, and we won’t agree on everything. But what I offer tonight is a set of concrete, practical proposals to speed up growth, strengthen the middle class, and build new ladders of opportunity into the middle class.”

Those proposals included most notably an increase in the minimum wage. “Americans understand that some people will earn more than others,” he said. “And we don’t resent those who, by virtue of their efforts, achieve incredible success. But Americans overwhelmingly agree that no one who works full time should ever have to raise a family in poverty.”

The President also called for expanded pre-K and broadband access, among other proposals.

You can read a full transcript of the speech here, watch video of it here and listen to Mara Liasson’s report on NPR’s Morning Edition here:

In the official Republican response Congresswoman Cathy McMorris Rodgers of Washington addressed the issue directly.

“The President talks a lot about income inequality,” she said. “But the real gap we face today is one of opportunity inequality. And with this Administration’s policies, that gap has become far too wide.”

McMorris described families who can’t find full-time work, can’t afford college educations, and who are out-living their life savings.

“Last month, more Americans stopped looking for a job than found one. Too many people are falling further and further behind because, right now, the President’s policies are making people’s lives harder.”

She described, in general terms, Republican plans to grow jobs, improve education, and reform immigration. You can watch her response here.

In his response for the Tea Party, Sen. Mike Lee of Utah tackled inequality – and the President’s position on the issue – more directly.

“We are facing an inequality crisis – one to which the President has paid lip-service, but seems uninterested in truly confronting or correcting,” said Lee. He said the inequality crisis present itself in three forms:

“Immobility among the poor, who are being trapped in poverty by big-government programs; insecurity in the middle class, where families are struggling just to get by and can’t seem to get ahead; and cronyist privilege at the top, where political and economic insiders twist the immense power of the federal government to profit at the expense of everyone else.”

He went on to say the Obama administration “continues to leave poor and middle-class families further behind, while he and his allies insist that the real problem is ‘inequality’ itself.” Lee criticized Obama on a range of issues he said leads to inequality, and specifically targeted the Affordable Care Act (Obamacare), calling it an “inequality Godzilla that has robbed working families of their insurance, their doctors, their wages and their jobs.”

Watch Sen. Lee’s full Tea Party response to the State of the Union here.

What do you think of the fact that inequality has become the focus of national leaders on both sides of the political spectrum? Is the issue more about income or opportunity? Did anything President Obama, Rep. McMorris or Sen. Lee resonate as a potential solution to the problem? Or is inequality actually a problem in the U.S.? Let us know what you think!

“The Undercover Economist” on the definition of poverty, and why we should care about inequality

Financial writer Tim Harford spoke with NPR’s David Greene today on Morning Edition about what poverty means now. Harford is the author of the new book The Undercover Economist Strikes Back.

Harford points out the definition of the poverty line is based on the cost of food needs over 50 years ago. While the calculation today reflects an increase in the price of food, it doesn’t include other common expenses today, like a cell phone and other bills.

“This goes back to Adam Smith writing in the late 18th century. Smith said that a man would be ashamed to appear in public without a linen shirt. And then he pointed out that the Greeks and the Romans — even the emperors — didn’t have linen shirts. His point is that poverty is partly about not having enough money to buy what society expects you to have. If you don’t have enough money to meet those social expectations, people will think of you as poor and you will think of yourself as poor. That’s not to say that poverty is totally relative, but it is saying it’s subjective — it’s a social condition. And he’s got to be right in some fundamental way about that.

“It’s about more than survival. It’s also about: Can you participate in social conversations. Are you ashamed to be seen in public or not? There is some controversy about whether that sort of thing should count for the poverty line or not.”

Harford said considering income inequality is “very contested, because there are just so many ways to think about it.”

“Are you comparing the very richest to the very poorest? Are you looking at the assets that people have? Are you just looking at their income? What we can be reasonably confident of saying is that inequality has been rising.”

So why should we care?

“Whether inequality really damages a country as a whole is less clear. I think the main argument that it’s a problem is that it starts to corrode your political system. You get fewer and fewer people with more and more money who are able to have a disproportionate influence on political priorities through their campaigning, their lobbying, their political donations. And if that happens then you’re moving further and further away from the ideals of a democracy.”

You can hear the full interview with Tim Harford here.