Lack of opportunity is a much bigger problem than income inequality.
There is a lot of talk about declining middle class in US. Middle class has increased consistently in the second half of 20th century. This rise has been the single most transformative force in the way american businesses have evolved in this period. More specifically, a lot of growth over the last 50–60 years have come from the increased consumption of goods, which was mainly fueled by the rising middle class. This has included everything from cars and air travel to television and media. Many of these businesses used to be the safest bets in the market.
However, this is changing rapidly — the middle class is shrinking. This change in demographics has come with unpredicted consequences in consumer trends in most businesses. It’s not a coincidence that most startups seem to only target few segments of the rich US population, as opposed to targeting the middle class — it’s clearly because the money is getting concentrated in those few pockets.
Shrinking middle class is just one measure of increasing income inequality — there are tons of metrics that point to the same conclusion — https://en.wikipedia.org/wiki/Income_inequality_in_the_United_States
Income inequality is certainly one of the worst things happening in US (and elsewhere in the world) right now.
Even though most people agree with the above statement, no one seems to have anything actionable to either mitigate or solve the problem. And that I believe is the main issue. We’re trying to solve a very difficult problem head on — but we don’t know how to solve it.
A real solvable problem is the “lack of opportunities”.
Income inequality is a problem only because people with wealth have more access to everything. Children of rich people have tons of opportunities in life as opposed to children from poor families. Most ultra-rich people are able to easily influence the policies that affect everyone including the middle class and the lower income families.
And this is a serious problem. The world is changing more rapidly than ever before. We must be able to provide similar opportunities to everyone, in order to acquire useful skills to better compete in this world.
Basic college education needs to be free or heavily subsidized for everyone.
College debt is a serious problem. Unfortunately, children from less affluent families are getting affected the most — the folks who actually need the most help. Doing away with the college debt would bring us one step closer to solving the “lack of opportunities” problem.
Surging rents in cities is holding people back.
Another issue that’s contributing to “more opportunities for the rich and less opportunities for the poor” is high housing rents in most cities. Some cities are taking steps towards solving this problem. However, most cities are not doing enough to make it easy for people to live in the cities.
Slow state/city policy changes are affecting the small/new businesses.
Supporting the small businesses has had bipartisan support all over the world. However, most politicians are heavily short-sighted in their support. They want to support the policies that reflect changes before they are up for re-election. And this is a big problem. Cities with long-term vision in their policies are going to surge past the others in future. One such example is supporting/expanding public transit — it’s a long-term solution that needs heavy support from successive city/state governments. (I will cover more on how city/state policies can make significant impact in a separate post.)
What I admire the most about Bill Gates is his continuous support to solve the opportunity problems all over the world — sometimes that’s through solving health crisis in developing world and sometimes the support is given to make education more accessible in US.