Bill Sundstrom: The Economics of Poverty and Inequality
If I were to be a professor, I would want Bill Sundstrom’s job. Dr. Sundstrom researches the economics of income inequality, poverty, the environment, and labor market discrimination based on race, gender and ethnicity. In his spare time, Dr. Sundstrom enjoys hiking, gardening and listening to jazz.
In this conversation, we cover Dr. Sundstrom’s passion for gardening with native plants, his career path, and ways to think about poverty and inequality, and how to both look at the facts and stay positive.
Gavin Cosgrave: How did you get interested in gardening with native plants?
Bill Sundstrom: I grew up in a family where we did a lot of hiking and spent whole summers camping around the country, so I’ve always enjoyed the natural world. Here in California once I had a yard of my own, I started thinking about what could go into the yard that’s consistent with the climate. I’m what I refer to as a Darwinian gardener, so whatever I plant has to survive on its own.
GC: What were your career plans in college?
BS: My father was a professor in chemical engineering at the University of Connecticut, so it was natural for me to think about being an academic. As an undergraduate at the University of Massachusetts, I toyed with the idea of being a journalist and I was editor of the college paper for a year.
I initially was intending to do something more in the natural sciences until I hit organic chemistry lab, and found out unlike my father, I was all thumbs in the lab. After graduating, I worked for six months as a local beat reporter, and that was enough to convince me that I’d be happier continuing in school.
Economics turned out to be a great choice because it combined the human side of things with math and modeling.
GC: One area of your work I’m curious about is income inequality. What are some ways that you think about income inequality? Is there anything we can do?
BS: It’s a huge set of issues. It helps to think clearly about the distinctions between income inequality and poverty. Income inequality is the divide between the rich and the poor, and in the U.S., there’s been an incredible concentration of income at the top since roughly the 1980’s.
That’s a related, but distinct, issue from poverty and the stagnation of wealth. Then of course there’s all the global inequality. On the one hand, globally as well as within the U.S., the divide between the rich and the poor is growing, but the reduction of poverty in many parts of the developing world has been quite dramatic.
Some of the approaches to solving the problem are trying to up the skill levels of people who are low-paid. Then there are more redistributive policies where the government could tax more progressively. I think some mix of those policies are probably a good thing, but which are feasible in the present political climate is another thing.
GC: If a student was really interested in helping work on poverty, what are some career paths or steps that could get them started on that path?
BS: I think we can overlook a lot of policies that we already have that a big impact in preventing poverty, and those often come under the “social safety net” heading, such as food stamps. I think a lot of Americans don’t appreciate how important those programs are for helping the large number of people in the U.S. that avoid the worst depths of poverty.
If a student was asking me about what to do about poverty in the U.S., I would say support those programs. Whatever you think about the whole question of work requirements for adults, children really are innocent and children need food. We have a lot of evidence now that those kind of basic family income supports are quite important for child development and later-in-life success.
I think early childhood education is also really important because the earlier we intervene, the better kids will be in the long run. I’ve had some association over the past few years with a local network of organizations called Step Up Silicon Valley that’s a network of non-profits that are trying to coordinate their assistance to help people get out of poverty. There’s a variety of places to get involved in the non-profit sector.
GC: You’ve also done some research on racial differences and discrimination in employment. What have you learned there?
BS: I did some research with a colleague at UC Santa Cruz and we found that the unemployment rates for black Americans has been double that of whites for quite some time. That is of course compounded by differences in wealth. There’s a lot of evidence that discrimination exists, despite the equal opportunity laws and various protections.
There has been some interesting research recently about class divisions within racial and ethnic groups. We know that race is correlated with economic class in the United States, but we’re also seeing growing inequality within groups. There’s evidence of a more successful, upwardly mobile groups within disadvantaged groups.
GC: If you had to research something new, what would it be?
BS: I’m interested in aspects of economics that are at the fringes. One thing that interests me is the extent to which inequality and economic justice can be explained by power dynamics in the society. As economists, we tend to look first at prices, at supply, demand and scarcity. But the world doesn’t just work due to market forces, there are power relationships that affect those things. If the person who is hiring you is the only game in town, they have a degree of power over your employment system. The interaction between political and market powers interact with economic outcomes.
GC: If a student was interested in poverty, inequality or economics, are there any books you would recommend?
BS: One book that I enjoyed was “Capital in the 21st Century” by Thomas Piketty. It’s very dense, but important showing research on documenting the growing income divide. He highlights how it’s not universal. If you look at northern and western European countries, we don’t observe the same concentration of wealth among the rich as in the U.S.
GC: If you could send a message to everyone in the U.S., what would you say?
BS: I do think people should figure out how to develop a real sense of empathy. An author I like talks about equality of concern. The political system should have equal concern for every person, and ask ourselves what that implies, we might possibly develop some greater empathy for folks who are maybe homeless, an undocumented immigrant or struggling to make a life for themselves.