by Hugh Whelchel
All-American rocker Bruce Springsteen took to the pages of Rolling Stone magazine this past spring to lament the existence of income inequality in our country today: “You cannot have a social contract with the enormous income disparity — you’re going to slice the country down the middle. It’s not going to hold.”
Is Springsteen’s concern about income inequality shared by most Americans? If you were to gauge your response by viewing the media coverage of the Occupy Wall Street campaign, then your answer would have to be yes.
Pollsters find a wide range of viewpoints. Gallup found that only 2 percent of Americans find the gap between the rich and the poor to be the most worrisome aspect of today’s economy. However, the Public Religion Research Institute found that more than six in ten Americans think that “one of the biggest problems in this country is that more and more wealth is held by just a few people.”
When talking to Christians about the issue, many don’t know what to think or what the Bible says about the issue. Is it a natural part of life? Is it a problem in America? Is it unfair or against Biblical teachings?
Much of this confusion within Christian circles is a result of economic illiteracy and simply being unfamiliar with Biblical teachings on the topic.
Here at the Institute for Faith, Work & Economics, we recently released a research paper that provided an economic and a Biblical explanation of why income inequality exists. My colleague Dr. Anne Bradley made the following key points in her paper:
1. Diversity is a Biblical premise of Creation. We are born with different gifts.
Scripture tells us that we are created in God’s image (Genesis 1:26-27) and that implies uniqueness. God is unique—there is only one God. Man too is unique both physically and spiritually. Each person on this earth has a unique genetic code, or DNA, that distinguishes us. From that code we each have a unique voice, fingerprint, personality, etc., all of which makes us matchless. Diversity is literally woven into the very fabric of creation.
In addition to our specific genetic proclivities we are all created with unique sets of gifts (1 Corinthians 12:4-11). Tim Tebow was created uniquely to become a quarterback just as Billy Graham was created uniquely to become a public evangelist. They both can and arguably have furthered the Kingdom of God through their very different gifts (both physical and spiritual) and their different application of those gifts.
2. By focusing on our gifts we can unleash our comparative advantage and bring value to the marketplace by serving others.
Economists refer to our uniqueness as comparative advantage. A good example of this is in Jesus’ parable of the talents in which a rich man gives his slaves different amounts of money, according to their ability. (Matthew 25:14-30).
If one individual or company can produce a good or service at a lower cost, then they are better off specializing in the production of that good/service and trading with others. Specialization frees up our time to focus in on using our gifts productively and that freed time is an opportunity to further advance the Kingdom of God.
3. In a free society, absent cronyism, disparity of wages is not a sign of injustice.
Because gifts are different and value in the market place is subjective, incomes will be different. They are different because we are created differently. Income inequality is then inseparable from a fallen world in which scarcity abounds. It’s a fact of economic life and economics pervades all of our life choices.
4. If we care (like Springsteen) about a society that reduces poverty and assists the poor, we should be concerned not about income inequality but the relative prosperity of those at the bottom and their income mobility.
In a market economy, most people start out at a lower income bracket and move to higher incomes. As they gain skills, knowledge, experience and awareness of what they are good at, they earn more income over time. All of this is based on people using their gifts and talents to serve others. But is this really happening?
The Congressional Budget Office reports that from 1979 to 2007 real (inflation-adjusted) average household income grew by 62 percent. This means that the average household experienced economic growth and that most US citizens are quantitatively better off than they were in 1979. Even though the rate of growth across quintiles is not the same, all quintiles experienced growth.
5. An opportunity society is the best way to unleash the creativity and dignity with which we are created and serve others with our gifts.
A system of free-market (voluntary) exchange supported by well-defined private property rights protected under the rule of law is the only empirically-tested way to protect human dignity and unleash the creativity with which we are created, all for the purpose of serving the common good. That is also the best way to foster income mobility.
So, Mr. Springsteen, let’s celebrate our diversity. We’re not all musicians, nor should we be. As a result, income inequality is a natural part of the natural human condition and is not necessarily unjust. From a Christian viewpoint, we are created uniquely and that means that there is no universal Biblical standard for income equality.
That said, we as Christians are called to seek justice and to care for the poor. We must be at the forefront of this discussion on income inequality – understanding where it is natural, and challenging the status quo where it is unjust. Corruption and injustice that cause poverty must be eradicated.
The main takeaway here is that Christians must be leaders in cultivating and protecting an economic environment that creates opportunity for those in poverty to enjoy upward mobility through the dignity of work.
Hugh Whelchel is executive director of Institute for Faith, Work & Economics (www.tifwe.org) and author of How Then Should We Work? Rediscovering the Biblical Doctrine of Work.