This is an interesting article from IEDC Now. It raises issues that relate at the local level. My question is Forum readers is: How do we adapt these issues in the national and global context to the local world of Ashtabula County?
How can economic growth be sustained while also being made more inclusive? Experts convened earlier this month in Washington, D.C., for “Saving Capitalism: For the Many, Not the Few” at the Center for American Progress and “From Words to Action: Delivering Inclusive Growth” at the Brookings Institution to discuss these complex issues.
At “Saving Capitalism,” former Secretary of Labor Robert Reich asserted that rising inequality stems from government institutions—i.e., rules about labor relations, the environment, property, patents, competition, and more. For most of the 20th century, American institutions served to both generate rapid growth and distribute those benefits to most citizens. But recent institutional changes mean only the upper class is benefiting from growth, argued Reich.
These assertions were echoed at “Delivering Inclusive Growth,” where Rick Samans of the World Economic Forum (WEF) noted that the median household in the United States earns $3,000 less today than in 2001. Institutional changes brought about by lobbying and political donations from special interests have reduced economic growth, added Homi Kharas, a fellow at the Brookings Institution.
Taxation is one such institution impeding equitable growth, according to panelists. Jurisdictions are increasingly reliant on sales taxes, which disproportionately affect lower-income Americans. Gene Sperling, a former economic advisor to President Obama, noted that the top 5 percent of earners get 80 percent of tax expenditures such as credits, deductions, and exemptions.
Recognizing these issues, a growing number of countries have deemphasized growing GDP in favor of more descriptive and varied economic development indicators, such as poverty rates and inequality metrics, when measuring growth.
Strong growth and equitable distribution are not mutually exclusive, said Samans, relating findings from the WEF’s recently released Inclusive Growth and Development Report 2015. The International Monetary Fund also holds that increased equity can in fact boost growth.
Going forward, Reich advocates a path of “high road capitalism,” in which Americans are employed in high-paying jobs producing high-value goods. One way to achieve this is though profit-sharing and worker-owned cooperatives, Sperling advocated. A number of experts also recommend that jurisdictions reduce consumption taxes, eliminate tax loopholes, and raise revenue through income or wealth taxes.