The rich-poor gap: If Brazil can address it, US can and should
MEDFORD, MASS — Brazil's President Luiz Inácio da Silva - "Lula," as he is widely known - has made Brazil's gaping gulf between its few rich and many poor a focus of his new administration.
The United States should do the same. While not as vast as Brazil's, the gap between the rich and the poor in the US is too wide - the widest among all the rich democracies.
According to World Bank data, the poorest 10 percent of Brazil's population receives just 1 percent of the country's total income, while the richest 10 percent receives almost half. In the US, the poorest 10 percent receives 1.8 percent of total income, while the richest 10 percent gets almost a third.
In no other rich democracy does the poorest 10 percent receive less than 2 percent of the total. (The average for rich countries is 2.9 percent.)
Don't leap to the conclusion that this extreme inequity in US income distribution reflects the policies of the Bush administration. The data are for a Clinton boom year - 1997.
In fact, Census Bureau data show a steady erosion of income inequity since the 1970s.
The Census Bureau estimates that in 2001, about 33 million Americans - 11.7 percent of the population and disproportionately African-American and Hispanic - lived below the poverty line. For a family of four, that meant an income of less than $18,000 per year, or $4,500 per capita.
At this level of affluence, the persistence of poverty for tens of millions of Americans is a national disgrace.
A national consensus is needed aimed at ending poverty, consistent with the vision of the late Harvard political philosopher John Rawls. For Rawls, the good society was the society in which a principal goal was the well-being of those worst off.
Progress toward the goal of eliminating poverty can be achieved through, for example, steady increases in the minimum wage (Lula has proposed increases that would double the Brazilian minimum wage in four years), progressive tax reform, and more extensive and effective unionism for low-wage workers.
Some will argue that a high minimum wage, a true living wage, would reduce the competitiveness of American products.
The Harvard Business School's Michael Porter has the right answer in his book "The Competitive Advantage of Nations": "The primary economic goal of a nation is to produce a high and rising standard of living for its citizens ... cheap labor [is not a] meaningful definition of competitiveness ... the ability to compete despite paying higher wages would ... represent a far more desirable national target."
The US also needs an immigration policy that reduces the flow - legal and illegal - of the more than 1 million people who come to the US annually, as the Commission on Immigration Reform urged in 1995. That report has since been ignored by both Democratic and Republican administrations.
The stream of mostly uneducated and unskilled immigrants increasingly feeds the reservoir of the poor, drives down wages and benefits at the low end, and competes for public services with poor citizens, adding severe pressure on beleaguered state and local budgets.
The Democrats are looking for a message, a vision. The goal of ending poverty and the measures necessary to achieve it fit well with Democratic Party ideology. At the same time, the Republicans are committed to a compassionate conservatism that should also embrace the goal.
Here's an opportunity for a national consensus to end a national disgrace.
• Lawrence Harrison teaches at the Fletcher School of Law and Diplomacy at Tufts University. He is coeditor with Samuel Huntington of 'Culture Matters.'