(Photo credit: 401(K) 2013)

By Daniel Gross

Welcomed by the left, and sure to be jeered or ignored by the right, it was full of plenty of old-time Democratic economic gospel and present-day center-left thought leadership. But it was a little bit light on the main factor that can combat the scourge of low wages and rising inequality: an appeal to the conscience and self-interest of businesses.

There was nothing new, or even objectionable, in the speech, which took a circuitous historical route to its subject. The U.S. has typically accepted greater inequality because we had a great deal of social and economic mobility. But the data behind that has clearly broken down, he argued. And that’s bad for America for a host of reasons. Countries with greater income inequality tend to have more frequent recession. Income inequality is bad for social cohesion, “not just because we tend to trust our institutions less but studies show we actually tend to trust each other less when there’s greater inequality.” And it’s bad for democracy.

The solution he offered is basically what has been the Democratic growth agenda for the last two decades. (It’s all there in Gene Sperling’s 2006 book, The Pro-Growth Progressive) That agenda includes “simplifying our corporate tax code,” more trade, smarter regulation, better skills and education, universal pre-school, more support for unions, bolstering retirement security, aid to urban areas and the unemployed, inter alia.

Read more  It’s the Wages, Stupid.