Giving Compass' Take:

• Peter Georgescu argues that economic inequality can be traced to CEO obligations to shareholders which prevents companies from offering better pay.

• Georgescu believes that inequality stems from public change opinion about the role of corporations. How would this affect economic inequality? 

• Read about why the distribution of wealth should be of interest to everyone.

In doing research for his book, Peter Georgescu was shocked to discover that 60 percent of American homes have to borrow money to put food on the table at the end of every month.

There’s an assumption that inequality has a lot to do with level of income, and that just didn’t satisfy me,” said Georgescu at a discussion session during the 2017 Aspen Institute Economic Security Summit.

The conversation explored the growing disparities between America’s top earners and those at the bottom, as well as the causes and some viable solutions to rising economic inequality.

Instead of only looking at income in his research on inequality, Georgescu focused on examining both the total income and the total expenses produced by a typical American household to figure out what American families were left with at the end of the year.

His research found that a typical upper-middle-class family is left with $8,500 after accounting for all expenses at the end of the year. In terms of factors that have contributed to rising economic inequality, Georgescu credits a change in the public mindset about the role of the American corporation, a shift that started in the 1980s with the corruption of, and a growing backlash against, the principle of free market capitalism.

Georgescu suggests that one of the ways to incentivize CEOs to take up greater stakes in searching for a solution to inequality is by providing them with a financial cover: a group of equity holders who are willing to buy a company’s stock when that company is facing economic challenges.

Read the full article about economic inequality by Tat'yana Berdan at The Aspen Institute.