Democratic convention: A question of inequality

By Kate Dailey
BBC News, Charlotte

image captionSister Simone Campbell took her message from the church basement to the convention hall

President Barack Obama has pledged to help the US middle class and restore a modicum of fairness to the US economy. But if he's re-elected, can Mr Obama handle the growing income gap?

In a church basement in downtown Charlotte, near where Mr Obama's Democratic Party is holding its national convention, about 50 men and women of all ages gathered to discuss the growing income inequity in the US - and what can be done about it.

"We need to talk about what we value, what we care about, and what's good for our nation," said Sister Simone Campbell, executive director of Network, a national Catholic social justice lobby, which hosted the event.

For years, Sister Campbell and her supporters have argued that ending the growing gap between rich and poor is both a national and a moral imperative.

But this year, more people have taken up the fight - including those working to re-elect President Barack Obama. As day turned to night, Sister Campbell would take to the convention stage to make her point in front of thousands of delegates and a national television audience.

media captionElizabeth Warren gave her backing to Barack Obama at the Democratic convention

"We all share responsibility for creating an economy where parents with jobs earn enough to take care of their families," she said, decrying Mitt Romney and running-mate Paul Ryan for putting the rich ahead of the working class.

Later still, Massachusetts Senate hopeful Elizabeth Warren delivered a similar message to the packed convention hall.

"For many years now, our middle class has been chipped, squeezed, and hammered," she said. "Their fight is my fight, and it's Barack Obama's fight too."

But is it a fight he's able to win?

Shrinking middleclass

Whoever wins in November will face a stark reality.

"It's really no secret that no matter what definition of middle class you're applying, they are diminishing," says Tatjana Meschede, a social policy expert at Brandeis University, Massachusetts.

"The number of people who are middle class is getting smaller and smaller."

A Pew study released this month found that 85% of those who call themselves middle class say a middle class lifestyle is more difficult to maintain than it used to be.

Rising costs of living, combined with high unemployment and dwindling personal assets, leave fewer people in the middle class and more on the brink of financial insecurity.

"The inequality of income distribution has been increasing," says Francois Nielsen, a professor of sociology at the University of North Carolina.

Decades in the making

That increase has been caused not by changes in public policy but by market-driven factors in the economy.

Executive salaries began to rise around the same time as US manufacturing saw a shift towards a more technology-driven economy and a decrease of union power - which reduced the number of solid working-class jobs.

"This has been going on since the 1970s," Mr Nielsen says, saying that reversing the problem could take decades.

"It is hard to tell how much a president can do with respect to inequality. Most economists and social scientists who look at this have the impression that it is something that is very long-term and would take major changes in legislation and in social organisation to really affect it deeply."

In order to enact real change, policy experts recommend everything from improved education, executive salary caps, financial training and subsidies for the working class, investments in urban infrastructure and decreased teenage pregnancy.

In other words, they propose lots of lofty, hypothetical solutions but no clear answers.

'A big step'

But that does not mean the president has no power.

image captionOccupy Wall Street protesters have helped bring income inequality into the national discussion

"You can't automatically turn things around, but you can set the stage in four years to do a lot of good," says Ms Meschede.

She describes the Obama healthcare law and other entitlement programs as a necessary safety net for those struggling to remain solvent.

"Lack of healthcare coverage and sudden illness is a big piece of losing economic ground," she said. "That's a big step in the right direction for American economic security."

And Austan Goolsbee, the economist and former member of the president's economic advisory council, told the BBC that the current tax system amplifies the disparity set up by external market forces.

For his part, the president has promised to keep entitlement programmes and grants for student loans intact in a second term.

He also favours letting tax cuts passed under President George W Bush expire, which would effectively raise taxes on incomes above $250,000.

The question is whether the US can afford to maintain the current level of entitlements, even with the proposed changes to the tax code.

Embrace or blame?

The affordability argument is one made by Mitt Romney and his running-mate Paul Ryan, who have pledged to cut both entitlement programmes and tax rates.

That has been a popular argument for years - that hard-working Americans should not have to subsidise those down on their luck.

But now, more voters are themselves out of work and out of luck, and it remains to be seen whether they will embrace Mr Obama or blame him for their plight.

"The middle class is hurting more than they were in the past," says Sister Rose Marie Tresp, director of justice at the Sister of Mercy of the Americas, south central community.

"More and more, the middle class is seeing relatives and friends who work hard but don't have jobs."