investments in the youth so that they will be more productive. This has productivity benefits for the economy as a whole and may serve to reduce later government spending on welfare. Keeping women in the work force will also increase the amount of money ordinary families have access to and are able to spend on their children, thus reducing the ill-effects of income inequality. This can be shown by the fact that amongst high-earners 66.2% have access to paid parental leave, compared with 10.8% of those who earn the lowest wages. And while 78.5% of the highest-paid workers have access to earned sick time, only 15.2% of the lowest-paid workers have the right to take paid days off if they or a family member get sick. 12 This is worrying because it means that those already in the most fragile of economic situations are most prone to sudden loss of income due to a child or parent getting sick. Greater equality for working parents would mean a more equal upbringing for the nation’s children, which should serve to reduce the manifestations of wage-gaps later on in life and restore a sense of meritocracy to the US economy, so people can finally believe in the American Dream again. To create the revenue for this the government could tax income and wealth at an equal level and strive to eliminate estate tax loopholes that currently allow a very substantial amount of wealth to be passed down to future generations, which is not good for social mobility. Capital gains and wealth should be taxed closer to the level wages are taxed at. It is unfair to tax a labourer considerably more than someone who earns their income from capital gains, they should be treated more equally in tax terms as sources of income. Giving effective tax breaks to those that have capital allows their income to grow faster than the rate of growth of the economy and when this is the case it could lead to greater concentration of wealth and in turn income. This would worsen inequality as a whole, and should be addressed urgently before the problem grows. The government may also choose to focus on consumption taxes to help tax the cash economy could create extra income for the government to then spend on services that increase mobility such as education, healthcare and welfare benefits. Looking at countries with high mobility such as Denmark and Sweden, there is significant public spending on healthcare and education accompanied by consumption taxes. 13 The precedent set by these Scandinavian countries may be something for the US to follow. However, most economists agree that value-added taxes are regressive, which would be an obvious downside to a policy seeking to reduce inequality. There could also be a greater focus on immigration of foreign-born people with a university education to the US without changing the overall level of migration. Currently the professions facing the most competition from immigrants are low-paid manufacturing jobs and hospitality jobs. Well-educated immigrants do not compete with low-paid manufacturing workers; they complement each other. With no US taxpayer dollars needed to educate these immigrants, the US is effectively receiving free human capital. Since demand for college-educated people has increased simultaneously with decreasing supply, increasing the supply of immigrants with university degrees, doctorates and PHDs could well be the answer to the income disparity between less educated and more educated Americans. Moreover, there should be federal support for unions and collective bargaining because between 1935 and 2012 trade union density and inequality have been negatively correlated. 14 Trade Unions allow workers to come together and demand fair wages that they can live off. Middle-class wages have barely changed since 1970 while those of the higher income brackets have increased considerably. Trade Unions would help reduce wage inequality. The strong link between low levels of inequality and high trade union membership 15 should be carefully considered by the government as a feasible way to combat inequality.
In conclusion, inequality in America is a problem mainly because it harms social mobility. Equality of
12 http://opinionator.blogs.nytimes.com/2014/04/20/to-reduce-inequality-start-with- families/?_php=true&_type=blogs&_r=0 13 http://en.wikipedia.org/wiki/Taxation_in_Denmark#Local_income_taxes_and_other_income_taxes 14 http://scalar.usc.edu/works/growing-apart-a-political-history-of-american-inequality/index 15 http://www.epi.org/blog/union-decline-rising-inequality-charts/
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