Want to Address Economic Inequality? Strengthen the Regulatory System

The growing problem of economic inequality in the United States continues to draw significant attention - and for good reason. By 2011, America's top 1 percent owned more than 40 percent of the nation's wealth, and ours ranks as one of the most unequal economies among developed countries. Meanwhile, the median wage rate for workers has remained largely unchanged in real terms over the last 40 years - even as worker productivity has grown at a steady clip - contributing to the largest gap in decades between high-wage earners and the rest of us. Several critical legal, social, and political institutions play a role in contributing to and reinforcing the growing chasm that separates the wealthy few from the rest of us. One that is overlooked, but no less important, is the U.S. regulatory system. When working properly, the regulatory system implements safeguards that help ensure that businesses bear the costs associated with their profit-making activities, rather than shifting them onto neighbors, consumers, or workers in the form of pollution, dangerous products, or hazardous working conditions. In doing so, the regulatory system serves as a crucial bulwark against economic injustice.