The Sorry State of Our Union

When President Obama delivers his sixth State of the Union address tonight, he is likely to strike an optimistic chord and highlight the strength of the union.

He’ll do so at a time when American society is increasingly fractured along class lines and the income inequality gap continues to grow. Wealth is increasingly concentrated in the hands of a few—income concentration has returned to 1920s levels and the United States ismore unequal than even the notoriously corrupt Nigeria.

The troubling trend has only been worsened by the financial recession, with the top 1 percent of Americans realizing 95 percent of the income gains since the recovery. Their incomes shot up by 31.4 percent between 2009 and 2012, while the incomes for the other 99 percent of Americans stagnated.

Reducing income inequality should be the president’s foremost priority. Not only is it the right thing to do, but it is also vital for economic growth. The post-World War II boom in America was also the time of greatest income equity. That has deteriorated sharply since the ’70s, when worker productivity increases began to seriously outpace compensation increases.

Reversing income inequality can begin by increasing the federal minimum wage to $10.10 an hour from its current woefully low $7.25 an hour. Had the minimum wage kept up with inflation since its peak in real value in 1968, it would currently be worth $10.56. The raise would increase the wages of 30 million Americans, especially underpaid workers who would be empowered to come off government assistance.

A bill sponsored by Senator Tom Harkin of Iowa would do just that and might stand a higher chance of passage than some of the president’s other priorities like the environment or gay rights. Republicans, wary of seeming too callous in an election year, are softening their opposition to the popular measure.

In the same vein as newly elected New York City Mayor Bill de Blasio’s promise of universal preschool education, the president should seriously work to ensure that every American child has access to early childhood education.

Expanding the earned-income tax credit, one of most effective tools for fighting poverty, is another goal that progressives and conservatives alike ought to get behind.

But perhaps the greatest casualty of the income inequality problem is intergenerational income mobility, an essential ingredient of the American Dream. Economists have observed a clear, negative correlation between income inequality and intergenerational social mobility in what some dub the Great Gatsby Curve. Unsurprisingly, America is both exceptionally unequal and has exceptionally low social mobility.

As Alexis de Tocqueville noted in his careful study “Democracy in America”: Of all the unique characteristics of America, “none struck my eye more vividly than the equality of conditions…it gives a certain direction to public spirit, a certain turn to the laws, new maxims to those who govern, and particular habits to the governed.” That kind of equality is the legacy for which Obama should strive.