America these days faces a daunting array of economic challenges. Still in the midst of a weak recovery from a recession that technically ended more than four years ago, the economy continues to suffer from high unemployment and weak income growth. Americans are anxious about their own and their children’s economic prospects, and they are unsatisfied with what their political leaders have offered them.
The Democrats think they know how to address these problems and anxieties. To hear them tell it, income inequality is at the core of what ails us. “Income inequality is a threat to the strength of our middle class, the health of our businesses, the security of our workers, and the growth of our economy,” Nancy Pelosi argued last spring. President Obama has repeatedly called rising inequality “the defining challenge of our time.” Liberal commentators insist on a tight link between increasing inequality, declining growth, and slowing social mobility. And for the Left, the centrality of inequality among our economic woes demands an agenda of redistribution: higher taxes, higher spending on our existing assortment of social-welfare programs, new programs (such as universal preschool), and, most prominently just now, a higher minimum wage.