Reversing Extreme Inequality

of Social Work & Social Welfare

Reversing Extreme Inequality

American Academy of Social Work and Social Welfare

aaswsw.org

Reversing Extreme Inequality

Laura Lein

University of Michigan

Jennifer L. Romich

University of Washington

Michael Sherraden

Washington University in St. Louis

Working Paper No. 16

January 2016

Grand Challenge: Reduce Extreme Economic Inequality

Working Paper

The Grand Challenges for Social Work are designed to focus a world of thought and action on the most compelling

and critical social issues of our day. Each grand challenge is a broad but discrete concept where social work

expertise and leadership can be brought to bear on bold new ideas, scientific exploration and surprising innovations.

We invite you to review the following challenges with the goal of providing greater clarity, utility and meaning to

this roadmap for lifting up the lives of individuals, families and communities struggling with the most fundamental

requirements for social justice and human existence.

The Grand Challenges for Social Work include the following:

 Ensure healthy development of all youth

 Close the health gap

 Stop family violence

 Eradicate social isolation

 End homelessness

 Promote smart decarceration

 Reduce extreme economic inequality

 Build financial capability for all

 Harness technology for social good

 Create social responses to a changing

environment

 Achieve equal opportunity and justice

 Advance long and productive lives

Co-Chairs

John Brekke Rowena Fong

University of Southern California University of Texas at Austin

Claudia Coulton

Case Western Reserve University

Diana DiNitto

University of Texas at Austin

Marilyn Flynn

University of Southern California

J. David Hawkins

University of Washington

James Lubben

Boston College

Ronald W. Manderscheid

National Association of County

Behavioral Health & Developmental

Disability Directors

Yolanda C. Padilla

University of Texas at Austin

Michael Sherraden

Washington University in St. Louis

Eddie Uehara

University of Washington

Karina Walters

University of Washington

James Herbert Williams

University of Denver

Richard Barth (ex officio)

American Academy of Social Work and

Social Welfare and University of

Maryland

Sarah Christa Butts (staff)

American Academy of Social Work and

Social Welfare and University of

Maryland

Working Paper

Reversing Extreme Inequality

Laura Lein, Jennifer L. Romich, and Michael Sherraden

Extreme economic inequality has taken hold in the United States. Fostered in part by

misguided policies and intentional choices, it can be reversed through purposeful action.

However, social policies created for the industrial age face relentless political opposition

and are not meeting the social welfare challenges of the information age. A new social

contract is required. This paper elaborates key components of that contract, identifying

social innovations to increase income at the bottom of society and reduce wealth

disparities. Through such innovations, the United States can reverse extreme economic

inequality. Because of social work’s history in addressing injustice and reforming policy,

the profession is uniquely positioned to take on this challenge and has critical roles to

play in addressing it.

Key words: Child care, Earned Income Tax Credit, education, home equity, human

capital, income, inequality, retirement, tax credit, unemployment insurance, wealth.

Modern economies in many countries are generating more wealth than at any other time in history,

yet divisions and disparities are increasing, with concentrated flows of income to the top and

capital accumulation mostly by those who are already wealthy. Extreme inequality in the early

years of the 21st century raises questions of decency and morality, and it leads to negative systemic

outcomes: slower economic growth, increased social dysfunction, and rising political instability.

Today it is clear that the United States is experiencing extreme inequality. For the benefit of

individual households and the society as a whole, it should be reversed (McCall, 2013).

For the most part, the pattern of extreme inequality has emerged from social and economic

policies and practices. It can be reversed by improving strategies for social and economic

development. In other words, we need not be resigned to hand wringing and despair. The United

States has arrived at extreme inequality because of intentional choices as a society, and this trend

can be reversed through purposeful action.

THE INCREASE IN INEQUALITY

There are several reasons for the growth of income inequality in the United States. Foremost,

labor has received an ever smaller share of the total economic product over time as capital has

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captured more. In the United States and in other industrialized economies, business owners have

claimed an increasing amount of total income, and this trend has accelerated since the 1980s

(Elsby, Hobijn, & Şahin, 2013; Karabarbounis & Neiman, 2013).

Within labor’s shrinking share of total output, income is becoming more unequal. Those at the

bottom of the income distribution have seen actual declines in wages since 1979, and half of all

workers have seen little or no growth in hourly wages since 2000 (Gould, 2014). One quarter

(25.3%) of U.S. workers have low pay by the international comparative standard (i.e., less than

two thirds of the median wage). This puts the United States at the very bottom in comparison

with other countries in the Organization for Economic Cooperation and Development. On

average, 16% of the workers in member countries have low pay (Organization for Economic

Cooperation and Development, 2014). At the other end of the earnings distribution, the top 10%

of earners have captured almost all of the growth in labor income over the last two decades, and

growth for the wealthiest has been especially noteworthy, with the top 1% of the income

distribution capturing 55% of total real income growth (Saez, 2015). It is commonplace today for

heads of companies to earn hundreds of times as much as the average income brought home by

their workers. These trends have led to hardship among ordinary workers and concentrated

income poverty.

Over the same 36-year period, nonwage compensation and emerging employment practices have

exacerbated income differences and further undermined earnings potential for the lowest earners.

The highest-paid jobs in our economy are marked by stable wages with the potential for

increases, flexible (if demanding) schedules, and important fringe benefits (e.g., paid time off,

retirement plans, and high-quality health insurance). In contrast to these so-called good jobs, the

positions held by workers at the low end offer little opportunity for advancement and few

valuable benefits. The workers have scant control over their own job demands and schedules

(Kalleberg, 2011). These differences exacerbate income disparities. Paid time off protects

income from the adverse effects of personal or family illness and supports healthy rest;

differential access to paid time off means that many low earners fall further behind when health

needs arise. Scheduling practices have also become a source of instability for low-wage hourly

workers. Employers who once hired workers for a fixed number of hours per week have adopted

on-demand, or dynamic, scheduling practices, whereby workers’ schedules and shift lengths vary

in response to daily or even hourly fluctuations in the employer’s needs. These practices are

increasingly widespread in the hospitality and retail industries, where workers—not their

employers—now bear the costs of fluctuating customer demand (Henly & Lambert, 2010, 2014).

Through such practices, firm earnings are shifted from labor to management and ownership.

For example, consider an employer like Wal-Mart, which increases its own profit margin by

relying on public policies—food stamps, the Earned Income Tax Credit (EITC), and other public

programs—to supplement workers’ pay. In effect, taxpayer money is supporting wealth building

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by the owners of Wal-Mart (Jacobs, 2015; Jacobs, Perry, & MacGillvary, 2015). This is a

shameful excess of capitalism. It is harmful to the nation as a whole and should be controlled.

Changes to public assistance and income tax policy amplify labor market inequalities. To date,

public policies in the United States have done little to address extreme income inequality. In fact,

since the middle of the 20th century, our income-tax system has grown less progressive,

amplifying rather than dampening changes in the market. As inequality accelerated in the last

decades of the 20th century, public assistance for those who were impoverished became more

limited and more dependent on labor force participation.

Evidence from outside the United States indicates that public policies can make a real difference,

and many other countries offer more generous social-welfare benefits; U.S. social policies

provide families in poverty with limited cash and in-kind transfers though a patchwork of

special-purpose programs (Garfinkel, Rainwater, & Smeeding, 2010). Broad rules limit program

use and restrict eligibility for programs. In addition, the United States tends to devolve policies

to states and localities instead of administering them at the national level. This sets the stage for

federal funding cuts and differences in the adequacy of benefits across different parts of the

country.

Wealth inequality (commonly measured by net worth) has also increased, reaching levels not

seen since the roaring 1920s and the Gilded Age of the late-19th century. Inequality in wealth

was greatly compounded by the Great Recession (2007–2009) and its stubborn aftermath. Fiscal

and monetary policies following the recession have also played roles by supporting the financial

sector at the expense of ordinary households. In the United States, the top 1% of wealth holders

own over three times as much as the bottom 80% (Wolff, 2014).

There are particularly extreme differences in wealth across racial and ethnic groups. Today,

depending on the data set used, the median net worth of White households is 10 to 20 times

greater than the median net worth of African American and Hispanic households (Taylor,

Kochhar, Fry, Velasco, & Motel, 2011). If accumulated wealth is the resource that enables

families to make long-term investments in education, homeownership, enterprise, and

development, then this wealth inequality is quite different from income inequality—and

ultimately more harmful (Sherraden, 1991).

How did wealth inequality become so extreme? We usually turn to the market and its cruel

arithmetic for answers to this question, but wealth inequality is also a function of public policy.

The main stores of wealth for most American households are owned homes and savings in

retirement accounts. Both are highly subsidized by public policy via tax benefits. Homeowners

receive a tax deduction for the interest paid on their mortgages, and savings in retirement

accounts are sheltered from tax exposure. The total tax benefits for homes and retirement

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accounts today exceed $200 billion dollars per year, and nearly all of this public subsidy goes to

the top half of the income distribution—indeed, most of it goes to the top 10% and especially to

the top 1% (Congressional Budget Office, 2013; Sherraden, 1991).There are no such benefits for

people who do not own their homes or have retirement savings. This public policy is shameful in

every respect. Wealthy households, which do not need the assistance, typically receive tens of

thousands of dollars per year in these sorts of public subsidies, while very few impoverished

households receive any of these subsidies at all.

This same pattern—substantial and stable subsidies for the wealthiest households but meager and

uncertain benefits for the poor and lower middle class—appears in different guises in other areas

of social and tax policy. Most would agree that the government should not be in the business of

exacerbating inequality, yet this empirical reality persists with little political opposition or public

outcry.

What has caused these conditions? Capitalism often gets the blame and, in truth, has earned this

reputation. Capitalism is of course a very productive economic system, but it is also prone to

excesses, and excesses must be constrained. Both older research and more recent work in

economics show that the nature of capital is to concentrate; unless intervention prevents it,

owners of capital will accrue a greater and greater share of a society’s production over time (e.g.,

George, 1880; Piketty, 2014). This is not a radical assessment; it is only a clear-eyed and

practical observation.

Evidence is now building in the United States and in other countries that current economic

disparities are dysfunctional for the whole economy and society. Inequality contributed to the

U.S. financial crash of 2007 and the Great Recession, as workers augmented their stagnant

salaries by taking on increasingly unsustainable levels of debt (Van Treeck, 2014). Citizens of

more equal countries live longer, enjoy better health, and report more trust in one another than do

those who live in less equal countries (Wilkinson & Pickett, 2010). When the level of inequality

in a nation broadly affects the health and longevity of its population as well as the foundation of

social relations, everyone has an interest in addressing this dysfunction.

As a result of these conditions, increasing inequality is visible on many fronts. The number of

people in poverty is higher now than it was 20 years ago (U.S. Census Bureau, 2013), and the

impoverished population is different. More families are living in extreme poverty. Remarkably,

nearly 20% of impoverished nonelderly households with children are living on $2 per day or

less, and the prevalence of such households rose dramatically between 1996 and 2011 (Edin &

Shaefer, 2015). These families are often without employment or public assistance and struggle to

meet daily needs. Their lived experiences include days with insufficient food and periods of

unstable housing (Seefeldt & Horowski, 2012). Extreme poverty leaves families debilitated by

debt, and untreated medical conditions are common. Many of the consequences are harmful for

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children. They include negative health effects and disruptions in schooling (Holzer,

Schanzenbach, Duncan, & Ludwig, 2008; Yoshikawa, Aber, & Beardslee, 2012).

The changing nature of jobs leaves the working poor particularly vulnerable to financial

difficulties. In hospitality industries, for example, employees encounter variable hours. If

business is slow, they can be sent home early; if business picks up unexpectedly, they can be

called in at the last minute. The demand for flexibility makes it difficult for workers to cobble

together enough hours of employment (Henly & Lambert, 2010, 2014; Lambert, Fugiel, &

Henly, 2014), and the challenges of parenting with low income are exacerbated by shifts that fall

outside of the regular workday. Both factors make it very difficult to plan for and secure child

care (Henly & Lambert, 2010, 2014; Lambert, 2014; see below). The lack of employer-

sponsored health-insurance benefits leaves workers without medical coverage and vulnerable to

the financial impact of health emergencies (Angel, Lein, & Henrici, 2006). These conditions can

make it virtually impossible for families to save and accumulate resources.

Although unemployment rates are slowly declining, underemployment and unemployment

continue to affect hourly employees, who have fewer work hours than they need. For both men

and women, the likelihood of having a stable, full-time job with benefits continues to decline.

Parents struggle to support their children and households at a level above destitution. In this

context, low-income families rarely have complete health insurance coverage over time (Angel

et al., 2006).

In addition to the challenges of finding child care that can accommodate fluctuating schedules,

many low-income families cannot afford safe, high-quality care for their children. Market-rate

care is very expensive relative to typical incomes. In 10 states, including the large population

centers of California, New York, and Illinois, center-based infant care exceeds 14% of the annual

income of the median married couple—such care would cost between one third and two thirds of

the income of a single parent (Child Care Aware of America, 2015). For the lowest earners, child

care options and access to child care subsidies are constrained by cost and availability. Although

states draw federal funds to provide subsidized child care for low-income families, subsidies are

limited, and many families find themselves on long wait lists. Availability of child care subsidies

has declined in most states over the past decade. Fewer than one in five children from poor

families receives subsidies, though there is variation across the states (Bruch, Meyers, &

Gornick, 2014). High market costs and limited subsidies mean that many low-income workers

cannot afford child care at all and therefore must rely on strained combinations of kin and self-

care.

Low-income families under such pressures are unlikely to accumulate even modest assets.

Without resources to fall back upon, they have no buffer against sudden declines in income or

sudden increases in expenses. Both are common features of living in poverty. Moreover, the

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difficulty of accruing financial resources prevents investments for parents’ advancement and

their children’s future. It is not surprising that social mobility and economic mobility have

declined. Families in poverty are increasingly unlikely to escape it.

As mobility has become increasingly constrained, families in poverty have lost access to options

for advancement. They have become less able to accrue the financial resources necessary for

investment in their own advancement or in their children’s future. They also have become less

able to amass the assets necessary to buffer the effects of future adversities. They face increased

likelihood of long-term destitution and indebtedness.

RESPONDING TO EXTREME INEQUALITY

We have arrived at a historical transition: The social policies created for the industrial age,

especially policies for the most disadvantaged, now face persistent political opposition and are

not meeting the social welfare challenges of the information age. A new social contract is

required, with particular attention to social policy innovations that support economic stability

and development, especially at the bottom. Below we succinctly present promising and

achievable policies to shore up incomes of the poor, build middle-class stability and wealth, and

reverse the mechanisms that concentrate wealth solely among the wealthy.

Strategies to Increase Incomes at the Bottom

Increase earnings from low-skilled jobs

Low-wage workers and advocates have begun mobilizing to demand better wages and more

predictable pay. Spurred by the protests of fast-food workers, cities and states are taking the lead

in raising the minimum wage to a new standard of $15 per hour (National Employment Law

Project, 2015). Several localities have passed industry-specific or general wage increases that

bring all workers to this standard, and additional efforts are underway. National legislation to

increase the federal minimum wage has been introduced but is currently stalled (H.R. 3164,

2015; S. 1832, 2015). Social workers are already engaged in and should continue advocating for

reforms at local, state, and federal levels. The profession also continues to document effects of

inadequate pay in the lives of impoverished families. Social work’s professional organizations

should propose and support policy reforms. In jurisdictions where wage reforms have been

adopted, social workers can inform clients and support enforcement if the policies are violated.

Social work researchers will continue to collect evidence on wage adequacy and assess efficacy

of policy reforms.

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Make part-time, shift, and variable work more humane

Like higher pay rates, guarantees of sufficient work hours—in the form of reporting-time pay

laws or other such measures—can add stability to workers’ lives and enhance the adequacy of

their total earnings.

It is unreasonable and harmful to workers if the structure of part-time work

is completely subject to the whims of employers. Other countries and some U.S. states have set

standards for minimum shift length and on-call time compensation. Federal laws should limit the

demands that employers can put on workers, specifying the allowable extent of flexibility and

instability in hours and income (Lambert, 2014). A positive approach would be to offer

incentives that encourage workplace responsiveness to circumstances in the lives of employees

and their families—incentives such as preferential consideration in public contracts for firms

with documented family-friendly policies. Social workers should advocate at all levels for

policies that guarantee minimum hours as well as pay for reporting and on-call time. In

jurisdictions that have adopted such policies, social workers can educate clients and the public

about their rights and protections, directing workers to appropriate authorities if omissions occur.

Social work researchers long have played central roles in tracking business-practice trends and

effects of those trends in workers’ lives. This work will continue to inform strategies to improve

working conditions.

Expand the EITC

The EITC has become the major income-support policy for low-income households. By tying the

size of the credit to the number of children in the household, this postmarket transfer targets

more support to low-income households with greater need. The EITC has bipartisan support, and

efforts are underway to expand it. Reforms should include extending the credit to workers who

are parents but do not claim dependent children. Many of them are noncustodial parents. By

extending the credit to them, policymakers will somewhat reduce poverty and inequality. Social

workers should support the EITC, educate clients and the public about it, and work with allied

professionals to enable eligible households to claim it. Social workers will continue to monitor

for-profit tax-preparation firms, which serve as the intermediaries for most claimants. Important

to consider are increases in the protection against predatory financial practices related to

claiming the credit, worker control over when they access the value of the credit, and the number

of alternatives for effective use of the credit, including saving a portion of it.

Reporting-time pay provisions “require employers to pay workers for a minimum number of hours for shifts they

report to work” (Lambert, Haley-Lock, & Henly, 2010, p. 11). Eight states, the District of Columbia, and Puerto

Rico have reporting-time laws (Center for Law and Social Policy, Retail Action Project, & Women Employed,

2014).

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Expand child care to enable stable employment

Difficulties in finding and affording child care are important barriers for low-income parents

trying to achieve stable income and develop assets. Child care is a necessarily time-limited

benefit; parents use full-time care only until children enter school and cease using care when

children become self-sufficient. Middle- and high-earning families are eligible for the Child and

Dependent Care Credit, a modest tax credit to partially offset the cost of care. But because the

credit is nonrefundable (the credit may not exceed the amount a filer owes), low-wage workers

with low tax liability cannot claim it.

State and federal policies should expand supports for child care to ensure that they are available

for all working families. Investing in high quality care for low-income children is expensive but

also highly efficient relative to other public investments (Heckman, 2011). Recent state and city

expansions of prekindergarten schooling represent progress toward public provision of safe and

stimulating environments for young children. Social work research and practice have provided

important insights that inform public policy in this area. Social workers will continue

collaborating with allied professionals to promote quality care.

Expand active employment creation

Although publicly supported job-creation strategies have fallen out of favor, they have

historically had considerable impact on national economic stability and the ability of low-income

families to maintain their households. When the private market fails to provide sufficient jobs

paying enough for workers to support their household needs, public jobs can provide

opportunities and labor for projects that create public good. The Works Progress Administration

and Civilian Conservation Corps (CCC), both responses to the Great Depression, together

represent the apex of American public-employment efforts. These programs built many lasting

public amenities. For example, the CCC built many of the state parks in America and planted

more trees than had ever been planted in the nation’s history (Sherraden, 1979). The WPA built

many public buildings and parks. Its cultural workers documented America’s geography,

landscapes, and histories (Sherraden, 1979).

Similar public employment policies might be enacted today. For example, a “CCC for the

twenty-first century,” if comparable in size, could employ about one million young people

(Sherraden, 2014, p. 32). But public jobs programs are politically controversial today; private

industry tends to view them as unfair competition or inconsistent with capitalist goals (Rose,

1989). Since the mid-20th century, public policies for job creation have most often taken the

form of incentives for private industry. For instance, the American Recovery and Reinvestment

Act of 2009 offered job-creation incentives, and the “vast majority” of jobs credited to it were in

private firms that received government-funded grants or contracts (Council of Economic

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Advisors, 2009, p. 6). Creating better evidence on the effectiveness and distributional impacts of

job creation policies should be a priority. As social workers Frances Perkins and Harry Hopkins

did for President Franklin Roosevelt in the 1930s (Downey, 2009; Hopkins, 2008), social

workers today can lead in developing, implementing, and evaluating innovations in employment

creation.

Strengthen unemployment insurance

Unemployment insurance provides an important buffer to protect workers who find themselves

out of a job. However, many low-wage workers do not qualify because they do not meet the

program’s minimum-earnings or job-tenure requirements. The standards were designed for

workers with so-called good jobs, not those in contingent or schedule-restricted positions

(Shaefer, 2010). Changes to the requirements would extend this key support to the families least

able to weather a spell of joblessness (Levine, 2006). Indeed, states have reacted to the 2009

American Recovery and Reinvestment Act by enacting reforms to strengthen the program;

families have fared better in states that implemented the unemployment insurance reforms than

in states that did not (Chang, 2015). In some cases, unemployment insurance is not an option.

Temporary Assistance for Needy Families remains a significant bridging program for those

families in difficulty. In this difficult job market, families may require support when adults are

between jobs, injured, or ill. Since the profession’s inception, social workers have helped

families to access these programs, delivered supports, and tested sustainable improvements to the

safety net. At national and state levels, social workers can continue to advocate for inclusive

unemployment insurance and effective temporary relief for those who do not qualify.

Stop privileging income from capital over income from labor in the tax system

One income-oriented strategy that targets the wealthy should be put squarely on the table. In

future budget-reform negotiations, favorable treatment of capital earnings should be eliminated

because it is unfair and counterproductive policy. It does little for the economy and increases

inequality. This tax change would (a) reduce incomes at the top, where so much of the total

income comes from capital; (b) raise public revenue, creating resources that could support

incomes at the bottom; (c) remove the distortion between investment in capital and investment in

labor, leading to greater investment in labor, increases in employment opportunities, and wage

growth. The change touches upon the trifecta of inequality and would have huge positive effects.

The profession is perhaps uniquely positioned to make this case. Social work researchers have

produced a body evidence on the effects of capital-oriented strategies in the lives of families, and

insights from practice complement this evidence, suggesting effective ways to frame the relevant

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issues. Moreover, social work’s commitments to social and economic justice give the profession

leverage and credibility in public discussions about fairness of policy choices.

Strategies to Reduce Wealth Inequality

Several policy changes offer promising ways to reduce wealth inequality. We identify several

elephants in the room. Progressive advocates should shine a light on them.

Redeploy wealth-building subsidies in retirement

Federal and state governments spend well over $100 billion per year in tax benefits to support

retirement accounts, mostly for the already well-off (Congressional Budget Office, 2015; Joint

Committee on Taxation, 2015). This support, at minimum, should be equally distributed across

the population (a fair policy). Ideally, more of the support would go to lower income households

(a progressive policy).

Social workers should lead discussions about distributing public subsidies more fairly, and even

progressively. In these discussions, they should identify priorities and specific policy designs that

protect those who need support in their older years. At the same time, social workers will

continue to inform and engage in debates about Social Security retirement and its protections for

those with lowest incomes.

Redeploy wealth-building subsidies for shelter

As with retirement subsidies, the more than $100 billion in annual public subsidies for homes,

mostly in the form of the home-mortgage interest tax deduction (Congressional Budget Office,

2015), should be redeployed so that the distribution is at least fair and ideally progressive. If

there is to be a public subsidy for shelter, then at minimum each household should have the same

amount, regardless of whether they are owning or renting.

More generally, the United States is in need of an institutional strategy for universal, lifelong,

and progressive asset building. Such a strategy may have several components.

Create a new lifelong policy of inclusive and progressive wealth building

Such a policy can begin with accounts for all children at birth and evolve into a lifelong system

that builds wealth for education, homes, other life goals (Sherraden, 1991). This policy system

could eventually become a supplement for retirement security. The policy goal is not far-fetched;

it can happen. During 2014, three states (Maine, Nevada, and Rhode Island) announced the

implementation of universal and automatic accounts for children. Policy innovations in the states

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are ongoing, and there is a positive, bipartisan, federal discussion (Beverly, Clancy, Huang, &

Sherraden, 2015)

Social workers are already leading efforts to build and test the features of universal and

progressive asset-building policies. As that work continues, the profession should advocate for

the broadest adoption of effective measures. In related work, the profession should also

reincorporate financial capability practice into the professional training curriculum (Sherraden et

al., 2015). This training was an integral part of social work practice in the first half of the 20th

century, and it is now time to reestablish it.

Reduce the role of income and wealth in building human capital

In addition to strengthening opportunities for private saving, we should continue to scrutinize

education funding models that do not benefit the full population effectively. In primary and

secondary education, this includes local tax-based funding for public schooling. Such a funding

model is inherently unfair.

This also includes the shift away from public investment in postsecondary education. Earning a

college degree is the surest step toward a middle class life, yet American higher education—once

an engine of our middle-class democracy—is slowly morphing into a replicator of economic

inequities. The children of the wealthy are more likely to enter and finish college than are the

children of low- and middle-income parents (Bailey & Dynarski, 2011). Moreover, poor and

middle-class students who gain entry but cannot pay outright must borrow, mortgaging their

future earnings to pay for college.

In short, a major funding shift has occurred: Basic postsecondary education, once a public

responsibility shared by taxpayers and families, has become a private responsibility met

primarily by students and their parents, with long-term implications for the financial positions of

all parties. College graduates from low- and moderate-income families now spend nontrivial

parts of their first two decades of work repaying student loans instead of accumulating resources

for their future (Elliott, 2015).

At every level, social workers can design, study, and advance policy innovations that increase

access to quality education and promote successful educational completion. This should happen

for reasons of decency and fairness, and also because this is the best possible investment strategy

for the future of the nation as a whole.

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Getting There from Here

In sum, inequality in the United States today creates hardship for households, a suboptimal

economy, and social instability. One important insight is that inequality is not caused solely by

the market. Misguided public policies have fostered inequality; thus, a partial remedy lies in the

design and implementation of more positive policies. The United States can reverse extreme

economic inequality.

Achieving the goals discussed here will require advances in policy design and changes in public

will. The grandness of this challenge lies not in the depth of the required technical knowledge

but in the daunting task of crafting and executing political changes within legislative systems that

are too often beholden to the interests of the wealthy. Demanding work remains, but social

workers have a long and honorable history of pointing out the injustices, recommending better

policies, and working very hard for those social innovations.

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Bailey, M. J., & Dynarski, M. (2011). Inequality in postsecondary education. In G. J. Duncan &

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chances (pp. 117–131). New York, NY: Russell Sage Foundation.

Beverly, S., Clancy, M., Huang, J., & Sherraden, M. (2015). The SEED for Oklahoma Kids Child

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ABOUT THE AUTHORS

LAURA LEIN,

PhD, is the Katherine Reebel Collegiate Professor of Social Work and Dean in the School

of Social Work, and Professor of anthropology at the University of Michigan.

JENNIFER L. ROMICH, PhD, is Associate Professor in the School of Social Work and Director of the West

Coast Poverty Center at the University of Washington.

MICHAEL SHERRADEN, PhD, is George Warren Brown Distinguished University Professor and founding

Director of the Center for Social Development in the Brown School of Social Work at Washington

University in St. Louis.

ACKNOWLEDGMENTS

Sandra Audia Little at the University of Maryland School of Social Work designed the cover. Chris

Leiker at Washington University’s Center for Social Development provided editorial support and

comments on the manuscript. Marcia Meyers gave input on earlier drafts.

SUGGESTED CITATION

Lein, L., Romich, J. L., & Sherraden, M. (2015). Reversing extreme inequality (Grand Challenges for

Social Work Initiative Working Paper No. 16). Cleveland, OH: American Academy of Social Work and

Social Welfare.

CONTACT

American Academy of Social Work and Social Welfare

Sarah Christa Butts, Assistant to the President

academy@aaswsw.org

Corresponding author. Email: leinl@umich.edu.