In The Great Divergence: America’s Growing Inequality Crisis and What We Can Do About It, Timothy Noah expands on his award-winning Slate series to explain why the wealthy command so much of the pie.
When did you first become interested in the subject of income inequality?
I entered the work force in 1980, a year after the Great Divergence began. In the aughts, we finally started to see research explaining the causes of this divergence, some of which I learned from Paul Krugman’s book, The Conscience of a Liberal. In 2003, Thomas Piketty and Emmanuel Saez made major contributions to our understanding of what was happening to the wealthiest Americans. I decided to do a series [on income inequality] in 2010, and the response was overwhelming. The Occupy Wall Street protest has made income inequality a huge national issue, though the whole notion of the 99% and the 1% comes straight from Piketty and Saez’s groundbreaking work.
What surprised you the most in your research?
I hadn’t known that the U.S. had slipped behind most of Western Europe in terms of income mobility. For the book, I decided to write a new chapter and found that the mobility problem was actually worse.
You note that the U.S. economy fared best during “The Great Compression”—the period from the 1930s to 1979, when the share of the nation’s income going to the wealthy shrank or remained stable.
Right, and that’s an argument that a lot of conservatives try to ignore. You see this in Romney’s response to Obama. He says that Obama looks to the capitals of Europe for his notions of what America should be like, and the truth is Obama doesn’t have to do that. He can look at the U.S. between 1934 and 1979, when there was major growth. You didn’t see income inequality getting worse until 1979, so there’s plenty of evidence for robust growth accompanied by greater income equality.
What argument can you make for policies promoting more equal income?
Prosperity is supposed to be shared. For a long time, economists said that when productivity picked up, the benefits would be shared by people of medium incomes. That hasn’t happened since the 1990s. As the median income stagnated in the aughts, the productivity numbers just went way, way up. [So] one of the widely shared premises about how this problem would get solved turned out to be wrong, and workers aren’t benefiting from being more productive. You don’t have to be a liberal to find that very troubling.