EPI issues “how to” plan for reversing inequality

In a comprehensive new policy agenda, the Economic Policy Institute details solutions to address rising inequality and ensure that everybody in America gets a fair cut of the benefits of economic growth. The rise of inequality has been the result of intentional policy decisions made on behalf of the rich and corporate interests, and only a complete reorientation of these policy levers can reverse this. As Congress prepares to start its 116th session, EPI’s Policy Agenda plots a deliberate and expansive set of policies Congress could enact to rebalance power back to the broad majority.

This agenda provides a diagnosis of the problem and a recommendation for reform across a range of economic policy issues, recommending changes in labor, tax, budget, trade, macroeconomic, regulatory, and climate policies. The disparate impact of policy changes across racial and gender lines is highlighted throughout, and race- and gender-targeted policies are also examined in a stand-alone section.

“For most of the last four decades, income inequality has exploded, income growth for the vast majority has slowed to a crawl, and progress in closing gender and racial income gaps has been either too slow or nonexistent,” said Director of Policy Heidi Shierholz. “Policymakers must take bold steps to unrig the economy’s rules, paying particular attention to policies that tilt bargaining power back toward low- and middle-wage workers.”

The organizing principle behind the agenda is that economic outcomes overwhelmingly reflect intentional policy decisions—and if these outcomes were created by policies, they can be changed by different policies. A key example of this approach can be seen in EPI’s recommendations surrounding labor markets. A growing body of research has shown that leverage and bargaining power are key determinants of workers’ wages, and wage growth for most workers has suffered in recent decades precisely because their leverage and bargaining power have been intentionally weakened by policy choices. EPI’s Policy Agenda recommends boosting this leverage with a range of specific policies, including labor law reform to allow workers to effectively bargain collectively, higher minimum wages, updated overtime standards, banning forced class and collective action waivers as a condition of employment, and more-robust enforcement of anti-discrimination laws.

“Inequality didn’t explode because of any one legislative bill or policy change. Instead, it happened because lobbyists and advocates for the rich and corporations worked every single day for decades to find policy levers that could be pulled to send every last penny to their clients,” said EPI Research Director Josh Bivens. “Reversing this inequality will require an approach every bit as consistent and dogged and far-reaching. This roadmap is a good place to start.”