Jerry Brown wades into income inequality
08/06/2014 1:57 PM
08/06/2014 1:59 PM
Last week it was Neel Kashkari, the Republican candidate for governor, emerging from a week posing as a homeless man in Fresno to highlight shortcomings of the economy in California.
He was unable, he said, to find a job.
The counterpoint came Wednesday, in a speech in which Gov. Jerry Brown lamented “incredible” income inequality in California. He cited a day-old report by the Wall Street credit rating agency Standard & Poor’s that found increasing income inequality has held back the country’s economic growth.
“If the consumers are up to their eyeballs in debt, aren’t making a decent salary, how the heck are they going to buy anything?” Brown told the California School Employees Association. “And if they don’t buy anything, the economy doesn’t go forward and doesn’t work.”
The report, Brown suggested, was an affirmation of liberal policies championed by Democrats.
“Now we have official approval of progressive, more egalitarian politics coming right out of Wall Street,” he said.
Yet this conclusion would require about as selective a reading of the Standard & Poor’s report as forgetting Kashkari’s resume – or beachfront residence – on his recent trip to Fresno.
In “How Increasing Income Inequality Is Dampening U.S. Economic Growth, And Possible Ways To Change The Tide,” economists at Standard & Poor’s raise significant concerns about income inequality but offer few recommendations for addressing the problem.
Increasing the minimum wage, for example, could help bring low-wage earners above the poverty line, but it also could reduce potential hires, the report finds. The authors bring up specifically a proposal to tie California’s corporate income tax to a company’s ratio of executive-to-worker pay.
“Any clear-headed consideration of these options must recognize that heavy taxation – solely to reduce wage inequality – could do more damage than good,” the report’s authors wrote.
On the other hand, Standard & Poor’s said, “some degree of rebalancing – along with spending in the areas of education, health care, and infrastructure, for example – could help bring under control an income gap that, at its current level, threatens the stability of an economy still struggling to recover.”
Brown’s speech was rousing and in the style of a campaign, but no more so than addresses he has made to labor unions – a major source of his support – since taking office in 2011. Brown is far ahead of Kashkari both in fundraising and public opinion polls, and he has paid his opponent little attention.
“I guarantee you the next four years, if the election turns out properly, will be exciting,” he said.
Editor’s note: This post was updated at 2:55 p.m. Wednesday to correctly state how long Kashkari was in Fresno.