The Politics of Income Inequality in the United States

by

Christopher Faricy

• LAST REVIEWED: 13 October 2020
• LAST MODIFIED: 21 January 2016
• DOI: 10.1093/obo/9780199756223-0147

Introduction

How have political factors contributed to the growing income gap? And how has the rise of income inequality affected American democracy? Income inequality in the United States has grown since the late 1960s and has reached historic levels. A host of new research places political causes alongside extant economic and sociological theories in explaining the recent rise of income inequality. In addition, scholarly attention directed at examining issues of representation within the context of the growing wealth gap in America has increased noticeably. The nascent field of the politics of income inequality stretches across subfields within political science and includes work from economics, sociology, and psychology. This line of research has challenged some of the conventional wisdom, created new scholarly debates, informed actual policymaking, and reenergized the study of political equality and representation. However, many of the major works on the politics of income inequality are criticized for the lack of attention given to the intersection of race, class, and gender. The research in each subfield examines both the political causes and the effects of income inequality. In studies of public opinion, scholars examine the degree to which citizens are knowledgeable about the rise and levels of inequality and the redistributive effects of public policy. Some scholars evaluate how rising inequality affects the formation of citizens’ attitudes toward government spending, social welfare policies, and other programs designed to increase economic security. The most scholarly attention is being given to studying political representation within the context of income inequality and economic insecurity. This scholarship often examines differences in policy preferences across income class and determines whether representation is skewed toward wealthier or more advantaged populations. Debates are evolving as to the extent of socioeconomic class differences across policy preferences, values, and partisanship. While many of these studies find evidence that the wealthy’s preferences are more reflected in policy changes than those of the middle class or working class, serious disagreements exist about whether the US government has been more or less responsive to the average voter. The list of factors from this line of scholarship on which conditions in American politics produce more or less responsive governing is growing. Political behavior scholarship documents the disparities in political participation and mobilization across demographic groups. These studies find that citizens do not participate (nor are they asked to participate) evenly across demographic groups, and, thus, advantaged groups tend to vote more than disadvantaged groups. These discrepancies are reflected in who gets elected, interest group influence, and policy outcomes. Another line of research assesses the role of formal and informal institutions in the politics of income inequality. For example, some research has found that political party control of the presidency produces increases in income inequality while other works have questioned whether or not the presidency has the capacity to influence large changes in national income distribution. A number of books observe a difference between the economic policies of the Democratic and Republican Parties and the subsequent effects on the direction and magnitude of income inequality. The consensus is that Republican Party control results in economic policies that increase income inequality while Democratic rule assuages inequality. Studies of elections find that political parties in government become more responsive to the mass electorate closer to elections. A number of studies on the politics of income inequality also examine the role of congressional institutions, political polarization, interest group activity, campaigning, and the changing nature of bureaucracy. To date little work has been done on how the court system influences redistributive policies or how high levels of inequality impact the functioning of the courts. There is also potential in using theories of political economy to examine the politics of income inequality in the United States (see Jacobs and Soss 2010, cited under Political Institutions).

General Overviews

The emerging field of the politics of US income inequality has few, if any, overviews of the existing literature. An edited volume, Jacobs and Skocpol 2005, which is a product of the American Political Science Association (APSA) taskforce, comes closest to an organizing work on the topic of income inequality, although many significant studies have been published since 2005. Most notably, Bartels 2008, influential book, examines the role of politics in producing policies that disproportionately benefit the rich and the erosion of programs that help the poor. For example, Bartels shows that Republican presidents produce lower levels of economic growth and generate higher levels of inequality. He argues that voters contribute to the political causes of inequality through misunderstandings of their economic self-interest and rewarding recent rather than long-term economic growth. Unequal Democracy also finds that legislators disproportionately respond more to the policy demands of the wealthy. An edited volume, Enns and Wlezien 2011 presents numerous studies on the differences in public opinion across groups and policy representation. This book reflects the variety of viewpoints and debate in the literature on whether the US government is more responsive to the wealthy or the average voter. Gilens 2012 examines the relationship between policy preferences and changes in American laws over decades. Gilens finds that when the preferences between the rich and everyone else diverge, policy changes follow the demands of the rich. He argues that this pattern is most likely the result of the increased role of money in campaigns and elections as well as the influence of lobbying. Finally, Erikson 2015 reviews the literature on differences in policy preferences and democratic representation as it pertains to income inequality.

• Bartels, Larry. Unequal Democracy: The Political Economy of the New Gilded Age. Princeton, NJ: Princeton University Press, 2008.

  A pioneering work in the politics of income inequality. This book examines paradoxes of public opinion and how policymakers respond to opinion changes across class. Bartels finds that citizens are often confused about their economic self-interest, policymakers respond more to the opinion changes of the rich, and Republican administrations pursue fiscal policies that result in increased inequality.

• Enns, Peter K., and Christopher Wlezien, eds. Who Gets Represented? New York: Russell Sage Foundation, 2011.

  This edited book with contributions from leading scholars examines the differences in policy preferences across race, class, and partisan groups. There is some evidence, especially from Wlezien and Soroka and Walsh, that little difference exists among socioeconomic classes in their policy preferences except for welfare. However, other studies, particularly Gilens, find more policy responsiveness to the preferences of the rich.

• Erikson, Robert S. “Income Inequality and Policy Responsiveness.” Annual Review of Political Science 18 (2015): 11–29.

  DOI: 10.1146/annurev-polisci-020614-094706

  This article reviews the literature on inequality and representation. Erikson examines the puzzle of why research shows that the working class is underrepresented but policy outcomes continually move in a liberal direction.

• Gilens, Martin. Affluence and Influence: Economic Inequality and Political Power in America. Princeton, NJ: Princeton University Press, 2012.

  This book is a focused examination of the relationship between class-based preferences and changes to public policy. Gilens finds that when the policy preferences of the rich diverge from the middle class and working class that policy outcomes reflect the desires of the rich. However, the preferences of the middle class do matter for policy closer to a presidential election, during periods of divided government, and when they correlate with the rich.

• Jacobs, Lawrence, and Theda Skocpol. Inequality and American Democracy: What We Know and What We Need to Learn. New York: Russell Sage Foundation, 2005.

  This book expands on the APSA taskforce report released in 2004 and reviews the literature, to date, on inequalities in political participation, governance, and public policy.