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Opinion | How Can We Fix Income and Wealth Inequality in America?

Finally, the government needs to invest in infrastructure: Unleaded water, high-speed internet access, sustainable sources of energy. Left unchecked, global warming poses an existential threat to the security and prospects of future generations.

Over the past half-century, the government has pursued economic growth without much regard for the distribution of prosperity. The result: Slower growth and yawning inequality.

It’s time for a course correction.

The Federal Reserve, which possesses enormous power to stimulate economic growth, is charged by Congress with maximizing employment. But in recent decades, the Fed has systematically underestimated the economy’s capacity for job creation, leaving many Americans — particularly minorities — without jobs for extended periods and making it harder for workers to win raises. Jared Bernstein, an economist at the Center on Budget and Policy Priorities, and Janelle Jones of the Groundwork Collaborative have suggested a simple corrective: Instead of targeting overall unemployment, the Fed can correct its aim by targeting the Black unemployment rate. If the Fed provides enough stimulus to bring down Black unemployment, everyone benefits.

The government also can help workers take home a larger share of the nation’s economic output, reversing a long-term power shift toward employers, by increasing competition in the labor market. Enforcing antitrust laws would help to limit the predominance of large employers. Banning noncompete clauses would make it easier for workers to sell their services to the highest bidder. Reducing, and in some cases eliminating, occupational licensing requirements would also help.

And the government must ensure workers are free to bargain collectively if they so choose.

Stronger minimum standards for compensation and benefits would also serve to check the power of employers. House Democrats have passed a bill that would raise the national minimum wage to $15 an hour from the current paltry standard of $7.25 an hour, and the new minimum would rise with inflation, to prevent the erosion of purchasing power. The Congressional Budget Office reported in 2018 that fewer than half a million workers were paid the minimum wage — but more than 17 million workers most likely would see their own wages increase if the federal minimum was raised.

An expansion of the earned-income tax credit, which effectively refunds a portion of the payroll tax lower-income workers pay toward Social Security and Medicare, would be an effective supplement to a higher minimum wage. It would help workers, by allowing them to keep a larger share of their earnings, without increasing the financial burden on employers.

Every worker needs paid sick leave and family leave. Regulators need to crack down on the practice of classifying workers as contractors. And extending federal labor protections to nannies, health aides and other domestic workers would correct a longstanding injustice that has never had a justification other than racism.

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