Harvard MBAs say fighting wealth inequality is a top priority
The US economy is showing signs of strength not seen since since the 2011 recession, even in the face of a shaky global market. However, the increased prosperity is not being distributed equally – a trend some business elites are saying is becoming a problem.
A recent study shows that Harvard Business School alumni, many of whom are wealthy and major players in the financial industry, are more concerned about inequality and more equitable distribution of wealth than economic growth.
The new study, released Tuesday, asked 2716 randomly sampled graduates of the prestigious school where they stood on various issues facing the economy. The results showed that 66 percent of respondents chose inequality, middle-class stagnation, poverty, and economic mobility as a more pressing issue than boosting overall economic growth.
Overall, most respondents had positive feelings about the competitiveness of the US economy. Barriers to entrepreneurship were ranked lower and more accessible now than in previous years over the past decade. The study suggests the US also offers better access to start-up capital, talent and infrastructure.
Despite such favorable conditions, however, startups have been in decline since for the past thirty years according to US Census data. An analysis of the survey predicted “entrepreneurship might become a source of prosperity, but not shared prosperity….” Shared prosperity – prosperity that supports rising living standards for all Americans – is on the decline.
Alumni looked at the future of economic gains in the next decade and estimated that 41 percent of will go to the top 1 percent of Americans. Less than 5 percent are predicted to go to the poorest 20 percent. Given the option, respondents preferred a more even distribution across the economic spectrum.
These feelings were reflected in the prioritization of economic outcomes. While slow overall economic growth garnered the single largest support for the top priority for change at 33 percent, rising inequality (24 percent), middle-class stagnation (19 percent), limited economic mobility (11.5 percent), and rising poverty (11.2 percent) combined were much higher. Seventy-one percent of respondents saw one or more of these issues as not just social challenges, but also challenges for businesses.
“People have this economic unease, they have this economic anxiety,” said Karen Mills, senior fellow at the Harvard Business School and former head of the US Small Business Administration, in an interview with The Washington Post. “We haven’t created an evenly-disbursed set of opportunity.”