Aspen Ideas Fest panel grapples with wealth gap, solutions to economic inequality
The wealth gap is widening. So what’s the solution?
It is fitting that a conversation on creating more wealth for everyone would take place in Aspen, nearly 16 months into a pandemic that further widened the wealth gap, moderator Gillian White said Wednesday morning at the Aspen Ideas Festival.
“I think it’s really important that we have it here, in this moment, in this place,” said White, who is the managing editor of The Atlantic. “We are going to be talking about wealth, wealth creation and wealth inequality, and again I think Aspen is such an important place to start having this conversation.”
Aspen is a place where that inequality has been studied, extensively so. Ida Rademacher, who introduced the panel, leads the Aspen Institute’s financial security program that focuses on wealth inequality and economic inclusivity; Morningstar CEO Kunal Kapoor, one of Wednesday’s panelists, worked with the institute on research about just how much the wealth gap widened during the pandemic.
(It’s worth noting that Aspen is itself a place of what one sociologist calls “impossible math,” a paradox of superwealth and middle class in an increasingly expensive town.)
So what about the answer to that “how much” question? A lot, Kapoor said.
“It is very significant exactly because of what we posited: that many people who have access to markets are feeling even better off than they did prior to when the pandemic hit, and those who don’t are struggling even more,” he said.
The assumption that everyone has that access — or even the knowledge to use that access — is “one of the mistakes that has historically been made in financial services,” Kapoor said.
“If I was to ask everyone in this room whether they had access to the financial markets or participated in the financial markets … everyone in this room probably would raise their hands, and I think what has been demonstrated so far is if you went to different settings, with different groups of people, the answer could be quite different,” Kapoor said.
A bit of distribution in wealth and assets is natural in a market economy, according to panelist Beth Ann Bovino, the chief U.S. economist and managing director for S&P Global Ratings.
“That makes us work harder, that makes us invest in ourselves and our people and our children in order to have a better life,” Bovino said. “However, when it gets much wider, (which) is what we have,. … we see that the majority of participants in the United States are left behind. That means we lose their productivity, they lose their income and wealth, and we end up seeing it kind of spiraling down”
Recorded programming from the Aspen Ideas Festival is now online at aspenideas.org.
That’s not exactly breaking news to most people who have been tuned in over the last year and a half, White noted at the beginning of the panel.
“I think there’s no one who is watching the news or paying attention closely who didn’t hear the word ‘wealth inequality’ and hear about the gap widening,” White said.
“There were so many ways in which that happened,” she said, between those who could save more from spending more time at home to those who had to continue to work frontline jobs to those who experienced pandemic-related job loss.
There’s also the wealth gap that existed long before the pandemic began, the panel noted — a wealth gap that is in many ways linked to structural racism and a racial wealth gap that stems not only from income but from assets and inherited wealth, too.
“We need to start having serious dialogue about income and asset building strategies that are common to all people,” said Rev. Dr. Starsky Wilson, one of Wednesday’s panelists and the president and CEO of the Children’s Defense Fund in Washington.“It means we need to be talking about the fact that, you know, there are people who are descended from people who have a 250 years head start on asset building on me.”
“Supportive engagement” from government structures could help, Wilson said.
Kapoor mentioned “baby bonds,” an idea proposed to help close the racial wealth gap that entails providing government-issued bonds at birth, scaled based on the assets of the family. Universal basic income also could be a policy choice that moves things in the right direction, Wilson suggested.
“On a macro level we’re seeing that wealth and income inequality impact America’s future and we see it reflected in America’s children. We have come to a point of intersection between child well being, between inequities, broadly as we see them economically, and the matter and conversation of racial justice,” Wilson said. “We come to this conversation that we’re having today, and so we begin to see the impacts on what families can provide for their children.”
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