THE BLOG
04/30/2014 02:04 pm ET Updated Jun 30, 2014

Inequality for All?

This post was co-authored with Deborah Galaski

Inequality in America is staggering. Everyone knows that, but somehow, it seems easy to ignore. We create rationales for why we are not making as much money as we should, and for why the richest make so much more than the rest of us. Furthermore, we tend to socialize with people from similar economic backgrounds as us. So even though we know on some level that the income gap exists, we don't see it.

In his recent film Inequality for All, Robert Reich, former Labor Secretary under President Clinton, explains what has led to the current state of affairs. He demonstrates that a healthy economy relies on a robust middle class. Imagine 100 people, each making $50,000 per year. Most of that money will be spent in the consumer market (Reich notes that 70 percent of GDP comes from consumer spending). Reich refers to this as a "virtuous cycle." From the corporate perspective, consumption is important to profits. When people buy more goods, companies employ more workers in order to meet the increased demand. From the societal perspective, this increase in spending also leads to higher government revenue through taxes. As a result, the government is able to invest in social programs, specifically education. Such an investment has an economic pay-off, as a more educated workforce is more able to compete on the global market.

Now imagine one person making the same total amount as the 100 people mentioned above -- $5 million. Even if she buys fancy cars and eats out at the nicest restaurants, she won't spend nearly as much as those 100 people would have spent. As a result, most of her wealth will end up being invested around the globe, and not spent on goods and services in the U.S. From both a corporate and a societal perspective, this is undesirable. This, argues Reich, is what led to both the Great Depression and the recent economic crisis.

Reich persuasively argues that this distribution of wealth also has negative political side effects. He is not alone in his assessment, either. Two researchers at Princeton University just came out with a study classifying the U.S. not as a democracy, but as an oligarchy. By definition, a democracy requires all citizens to be able to participate in elections equally, whereas an oligarchy assumes that power is concentrated in the hands of the few. While all U.S. citizens retain the power to vote, elections are now won and lost based on the influence of individuals and special-interest groups with incredible financial power. Where does that leave our democracy?

It did not take a PhD in economics to make us see that the system is not working, and, after watching the film, we wanted to take action. At first, it seemed like the film's website (www.inequalityforall.com) would provide us with an answer, but the suggestions provided there largely consisted of more facts and figures or of online petitions to sign. Frankly, signing another petition did not seem like a sufficient response.

One effort on the website did catch our attention: a nation-wide campaign focused on faith communities taking place this Thursday, May 1. As Jewish professionals, our local Jewish community seemed like the natural place to begin organizing around these issues. However, we were surprised to find that few American Jewish organizations have made economic justice a focal point of their programs. Those who have, by and large, do not tend to focus on the national scale of this economic problem.

Inequality for All
challenged us to take a closer look at our values not only as Jews, but also as members of the American community. If we believe that economic justice is a Jewish value, what does that mean for how we address income inequality in the U.S.? The American Jewish community has displayed an incredible capacity to organize around issues that matter to us, whether they are political or religious, local or national. The United States, as a nation, also has a strong history of achieving social change through the efforts of local communities banding together under a common ideal. What part of that history will faith communities write in the current struggle for economic justice?

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