Nine Paradoxes of Addressing Inequality
Unpacking divergent arguments across vexing societal challenges
Addressing the causes of symptoms of social and wealth inequality is a conundrum that led me to telling the stories of startup companies and entrepreneurs that are aiming to solve such vast, global challenges. However, many of the philosophical questions that are underlying the solutions, particularly from a public policy and cultural perspective, remain open to some debate and to considering different sides of the same coin. A recent debate in my hometown about whether to raise local property taxes in order to better fund public schools and infrastructure got me thinking about such questions even more. The truth is that there are many paradoxes, where people who fundamentally agree about the need to solve inequality gaps can have polar opposite views about how best to accomplish such goals. Here I present nine such paradoxes. The majority of these relate to education and academia, as I have a strong belief that solving inequality ultimately comes back to leveling the playing field through scholarship and information. I keep an open mind toward many of these issues and encourage my readers to understand all sides in order to form a well-educated opinion on which paths to take when confronting such difficult questions.
Raising residential taxes at the community level. Feisty debates over taxation can take many forms. However, let’s consider a hypothetical scenario that removes the possibility that money will not be “wasted” and tax increases will be applied uniformly (a flat, rather than a graduated, tax). Let’s say all of the additional funds collected will go directly to enhancing services for the local public schools. One progressive view is that it is always worth investing in programs for students and compensation for teachers. However, as communities look to be inclusive, what about those who are already struggling and feel that while the local schools may not be the most well endowed financially, they are already quite adequate. Should the lowest income earners in a community have to subsidize pushing the schools into a higher echelon, assuming a local tax increase will do that?
The use of gender and racial preferences. Systemic biases through implicit and explicit racism and sexism are real and have had innumerable consequences for society. Should this be solved, in part, by granting a “leg up” to historically marginalized and underrepresented communities? Or should preferences be reserved for those who come directly for a lower socioeconomic status? Clearly, the two are not always correlated, and are at times in direct conflict. If preferences are to be used in school admission or job placement, who gets the priority between a wealthy Person of Color or a white person who comes out of poverty? It is an uncomfortable question for many progressives in particular, but one that should not be swept under the rug.
Promoting global travel and transportation. The ultimate personal conflict of mine. Global travel brings people and cultures together and is a force for understanding and goodwill. That doesn’t negate the fact, however, that it is also one of the world’s most significant contributors to carbon emissions and climate change. A potential solution could be mandatory carbon offsets with purchase of airline, train, boat, and tickets, but in turn will place a financial burden on those who travel out of necessity rather than for pleasure and comfort.
“Buy Now, Pay Later” for consumers. The democratization of access to capital and credit has been a theme of numerous prior blogs of mine. This can be a double-edged sword, however. While there is injustice in not providing a means for people to borrow money when they need it, it can also lead to a debt trap that people who live by the paycheck can have a difficult time breaking out of. While a more holistic approach is needed for personal debt management, I remain of the conviction that short-term credit, particularly for use in emergency situations and for essential purchases (such as medical bills and unexpected auto repairs) make tools such as “Buy Now, Pay Later” platforms a net positive in at least those critical situations.
Federal scholarships and subsidized loans for college tuition. The recent action of the Biden administration to forgive billions of dollars in student loans triggered an interesting debate. No one seeks to stress a young generation of workers with an enormous debt burden. However, there is no “free lunch” and colleges need to charge significant tuition fees to survive. The question is who most benefits from taxpayer-subsidized tuition? Many people simply can’t afford or choose not to attend college for one reason or another. College graduates are statistically more likely to achieve higher income than those who do not. Should non-college graduates then be compelled to subsidize, through their taxes, those who do and are able to achieve higher income levels. There are also many trades that a society needs, such as plumbing, mechanical work, cooking, personal care services, and more, that do not require college degrees, yet are arguably as necessary for society as other professions that lean on college-educated professionals.
Expanding school choice and charter schools. Education reform can be a dicey topic, especially as outcome measurement leaves room for interpretation and data biases. Public school advocates can rightly claim that school choice and charter schools draw funding away from traditional public schools that are often underperforming and most in need. On the other hand, underperforming schools may be so, at least in part, due to many factors that result from having monopolistic power and inertia. Competition works across many avenues of society, but is fraught with mistrust when it comes to education and those who prefer to preserve the status quo. This issue will continue to play out as different states and school districts take very different positions on this issue. It is unlikely that there will ever be a black and white answer for all communities regardless of socio-economic demographics, but it is critical that policymakers focus above all on outcomes for their students and constituents.
Raising the minimum wage. While this debate often centers around the philosophical question of whether capitalism’s “invisible hand” is enough to compensate workers based on the market’s demand for their professional skills, a more practical question is whether we can accept the increased likelihood of increased unemployment for some in exchange for raising average wages of others. In any case, it is hard to argue that the current minimum wage is in any way a livable wage for most adults. Does having a low minimum wage provide incentive for people to obtain more critical skills? Yet, what are the effects on society and taxes, if those who must rely on a minimum wage to also seek government assistance through welfare, food stamps, and other programs? A lot to unpack on this one.
Encouraging migration and guest workers. Certainly one of the most heated and highly politicized topics across not just the US, but many nations, is what to do about migrants. Even wealthy countries are generally ill-equipped to handle unrestricted migration. There is a lack of infrastructure to provide all that humans need to survive when crossing borders with few possessions. That said, migrants and guest workers very much support the economies of their new countries in many ways. Most notably, they fill jobs that would otherwise go unfilled, particularly in the agrarian, manufacturing, and service economies. The polarized argument of “immigrants come to take our jobs” is pure fallacy. Yet, uncontrolled migration can be harmful if appropriate services and opportunities are not in place. A thoughtful approach is needed that balances objective realities, and the debate must move away from partisan polarization into rational problem-solving.
University endowments and spending. Are universities deserving recipients of “financial aid” from donors, largely consisting of alumni? It likely depends on whether you’re talking about an Ivy League school with a multi-billion dollar endowment, or a struggling local college that serves commuting students and low-income communities. Yes, the big schools continue to rake it in without necessarily scaling up the number of students that they serve. And how do those schools then spend those endowment funds? Is it all toward need-based scholarships or is it to build the most beautiful buildings and create intangible aesthetic appeal that may or may not produce greater educational outcomes? A recommended “listen” for those interested in such topics, particularly as it relates to higher education, is Malcolm Gladwell’s audiobook, “I Hate the Ivy League: Riffs and Rants on Elite Education.”
The answers to these dilemmas are far from black and white and evidence exists that can “prove” either side is “right” in some fashion. If any of these paradoxes relate to your own experiences and observations, please share and help to encourage a healthy dialogue that will hopefully move all of us forward.