Video: President Obama on Tuesday detailed his job-creation plan in the State of the Union address, adding that it won't increase the deficit.
President Obama’s State of the Union address on Tuesday sounded like a familiar speech touting the economic importance of a thriving middle class. But behind his proposals is a desire to tackle a much less widely accepted phenomenon: a growing inequality of opportunity.
Sometimes directly and sometimes subtly, Obama and his advisers have been sounding the alarm that the poor and middle class may have less chance to advance up the economic ladder than they did a generation or two ago.
State of the Union 2013
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Tuesday night, the president outlined a package of ideas targeting the problem, which has only recently started to gain the attention of economists and sociologists. While stagnant wages and high unemployment are the challenges of the moment, some fear that reduced equality of opportunity will be a central economic problem in coming decades.
“We need to build new ladders of opportunity into the middle class for all who are willing to climb them,” Obama said in his address.
In his first term, Obama’s policies sought to end an economic crisis. They also took a step toward reducing inequality through his health-care law, which taxes the rich more heavily in order to pay for health insurance for the poor and lower middle class.
The vast majority of economists regard income inequality — the gap between the earnings of rich and poor — as a natural consequence of a capitalist system. But for many, inequality of opportunity is a different matter.
A relatively level economic playing field has long been thought to be a hallmark of the U.S. economy, and for much of the post-World War II period, it was. Now, as noted in an analysis by University of Arizona sociologist Lane Kenworthy, Americans have less opportunity to move up the economic ladder than people in many other rich countries, including Australia, Canada, Denmark, Finland, Germany, Norway, Sweden and the United Kingdom.
“This may well be the first generation where the gap between the life prospects of the children of the rich and the children of the poor has risen,” said Lawrence Summers, a Harvard professor and one of Obama’s former top economic advisers. “There’s no justification for inequality of opportunity — whatever is true of the outcome.”
Summers added that tackling this problem may be more politically attractive than trying to shrink the wealth gap, given that “reducing income inequality . . . raises questions about redistribution,” a term that many don’t like.
Obama is not the first president to try to lift the wages of the poor and middle class, a common talking point for left-leaning politicians. His Democratic predecessor, Bill Clinton, expanded a major tax credit for the working poor.
And Obama’s vision isn’t an antidote for the nation’s deep economic problems — figuring out how to blunt the impact of globalization and technological advances on working-class Americans is a complex and largely unresolved question.
Nor is it as ambitious as it could be. By declaring that none of his proposals “should increase our deficit by a single dime,” Obama is limiting how much money he can devote toward his cause.
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