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By Heather Boushey
January 14, 2020

Originally published in PA Times Magazine

What does equity mean to you and the Washington Center for Equitable Growth? How has that definition evolved during your career?

I came to Washington, DC in 2000 to work in the policy world and do research on the state of America’s middle class. The research and evidence soon made clear to me that it was not just about the middle class. The squeeze on the middle class was closely related to the lack of gains at the bottom and the disproportionate gains at the top. It is a bigger story about what is wrong with the U.S. economy.

This insight has infused my work and the work we do at the Washington Center for Equitable Growth, where we study the ways inequality affects our economy with the goal of advancing policies that promote strong, stable and broad-based growth. 

The evidence increasingly shows that today’s high concentrations of economic resources constrict economic growth. Yet our country has spent decades systemically undermining the capacity of institutions that were set up to contain and constrain economic inequality. This has made it impossible for the market to work as advertised. The current situation cannot provide a path forward for strong, stable and broadly shared income gains.

Equity continues to be a struggle for our country. What forces shape this narrative, both positive and negative?

The latest economic research from across the disciplines shows the many ways that high economic inequality—in incomes, wealth and across firms—serves to obstruct, subvert and distort the processes that lead to widespread improved economic wellbeing. 

Economic inequality obstructs the supply of talent, ideas and capital, slowing productivity growth. Wealthy families monopolize the best educational, social and economic opportunities, while those with fewer resources are locked out. And discrimination in housing, hiring, education and lending, among other areas, blocks too many from contributing to the growth of the economy.

Concentrated economic power subverts the institutions that manage the market. This makes markets dysfunctional because powerful corporations muscle competitors out of business, suppress wages and hobble innovation. It also makes our political system ineffective, as the wealthy dictate the terms of our political system and we fail to invest in public goods.

These subversions and obstructions distort the broader economy. Stagnant wages and meager workplace benefits rob families of buying power, undermining one of the key drivers of economic growth: the stable incomes that drive consumer spending. A savings glut among the super-wealthy pushes their capital toward rent-seeking and expanding the credit supply, rather than the productivity-enhancing investments we need.

Why does equity matter and how do you measure it? What goals/objectives are you looking to bring to life? How will the data show that you have been successful in meeting them?

Equity matters because while the economy is getting bigger, it is not getting better for most Americans. Currently, GDP measures economic growth only in the aggregate and, in an age of inequality, presents a misleading picture of how the economy is performing for the vast majority of people. This aggregate number can mask where the gains from economic growth actually are going; it is not enough to understand how our economy is performing for Americans up and down the income ladder.

Inequality obstructs, subverts and distorts our economy. But, without accurate statistics to tell us about how the economy is performing for everyone, policymakers will remain half-blind when evaluating the nation’s overall economic health. A new approach to measuring and expressing what a “workers GDP” might look like—which Equitable Growth refers to as “GDP 2.0”— could revolutionize economic policymaking.

Equitable Growth has been working with members of Congress to pass the “Measuring Real Income Growth Act,” which has been introduced in the House and Senate. It would tell us what growth looks like for low, middle and high income Americans.

For current and future scholars looking to engage in research around equity, where should they focus? Have aspects of equity been overexamined or examined incorrectly?

There is a large—and growing—body of empirical research that shows we cannot create strong or broadly shared economic gains through a policy agenda that presumes growth follows from allowing those at the top to reap the bulk of the gains. The policy agenda we have pursued for decades, driven largely by the desire to maximize GDP growth at any cost, is not delivering for American families. It is creating inequities in the economy that actually constrict growth.

Equitable Growth seeks to deepen our understanding of whether and how inequality affects economic growth and stability. Our academic grants program is building a portfolio of cutting-edge scholarly research investigating the various channels through which economic inequality may (or may not) impact economic growth and stability, both directly and indirectly.

Our funding interests are organized around four drivers of economic growth: macroeconomic policy, market structure, the labor market and human capital. We consider proposals that investigate the consequences of economic inequality, as well as its group dimensions; the causes of inequality to the extent that understanding these causal pathways will help us identify and understand key channels through which inequality may affect growth and stability; and the ways in which public policies affect the relationship between inequality and growth.

Author: Heather Boushey, president and CEO and co-founder of the Washington Center for Equitable Growth, is one of the nation’s most influential voices on economic policy and a leading economist focused on the intersection of economic inequality, growth and public policy. Her new book, Unbound: How Economic Inequality Constricts Our Economy and What We Can Do About It, will be released this fall. Boushey served as chief economist for Hillary Clinton’s 2016 presidential transition team and economist for the Center for American Progress, Joint Economic Committee of the U.S. Congress, Center for Economic and Policy Research and Economic Policy Institute. Named as one of POLITICO’s top 50 “thinkers, doers and visionaries transforming American politics,” she writes regularly for The New York Times, The Atlantic, and Democracy Journal She can be reached at [email protected]

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The American Society for Public Administration is the largest and most prominent professional association for public administration. It is dedicated to advancing the art, science, teaching and practice of public and non-profit administration.

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