<Li> policy, politics and race--movement conservatives increased their influence over the Republican Party beginning in the 1970s, moving it politically rightward . Combined with the Party's expanded political power (enabled by a shift of southern white Democrats to the Republican Party following the passage of Civil Rights legislation in the 1960s), this resulted in more regressive tax laws, anti-labor policies, and further limited expansion of the welfare state relative to other developed nations (e.g., the unique absence of universal healthcare). Further, variation in income inequality across developed countries indicates policy has a significant influence on inequality; Japan, Sweden and France have income inequality around 1960 levels . </Li> <P> Paul Krugman put several of these factors into context in January 2015: "Competition from emerging - economy exports has surely been a factor depressing wages in wealthier nations, although probably not the dominant force . More important, soaring incomes at the top were achieved, in large part, by squeezing those below: by cutting wages, slashing benefits, crushing unions, and diverting a rising share of national resources to financial wheeling and dealing...Perhaps more important still, the wealthy exert a vastly disproportionate effect on policy . And elite priorities--obsessive concern with budget deficits, with the supposed need to slash social programs--have done a lot to deepen (wage stagnation and income inequality)." </P> <P> There is an ongoing debate as to the economic effects of income inequality . For example, Alan B. Krueger, President Obama's Chairman of the Council of Economic Advisors, summarized the conclusions of several research studies in a 2012 speech . In general, as income inequality worsens: </P> <Ul> <Li> More income shifts to the wealthy, who tend to spend less of each marginal dollar, causing consumption and therefore economic growth to slow; </Li> <Li> Income mobility falls, meaning the parents' income is more likely to predict their children's income; </Li> <Li> Middle and lower - income families borrow more money to maintain their consumption, a contributing factor to financial crises; and </Li> <Li> The wealthy gain more political power, which results in policies that further slow economic growth . </Li> </Ul>

Rise of income inequality in the united states