US wealth gap a bigger problem than growth: Harvard survey

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Fixing America's worsening wealth gap is more important to the country's ability to compete globally than boosting overall economic growth, according to a Harvard Business School survey of its alumni published on Tuesday.

The report, "The Challenge of Shared Prosperity," showed alumni of the elite school generally believed American companies have been recovering their competitive edge on the world stage since the financial crisis, but that U.S. inequality posed a large and growing threat.

"Two-thirds of respondents consider it a higher priority for American society to address rising inequality, middle-class stagnation, rising poverty or limited economic mobility than to boost overall economic growth," according to the report, which was based on a survey of 2,716 alumni around the globe.

Why wealth inequality isn't a bad thing

Survey respondents predicted that America's richest 1 percent of the population would capture 41 percent of the country's income growth over the next decade, a figure they preferred would be closer to 16 percent.

Wealth inequality has emerged as a major issue in the U.S. presidential race, with leading candidates on both sides of the political divide calling it a key problem.

The Harvard report, the latest in a series of polls conducted by Harvard's U.S. Competitiveness Project since 2011, showed alumni were concerned about perceived declines in U.S. infrastructure, workforce skills, the political system, the tax code, health care and education.

"Many of the factors that determine workers' prosperity—including K-12 education, skills and infrastructure—are among the nation's perceived weaknesses or declining strengths," Harvard said in its summary of the poll.

Richemont Chairman Johann Rupert speaks with delegates during the Financial Times Business of Luxury Summit in Monaco, June 8, 2015.
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The report's authors called on corporate leaders and policy makers to help solve America's wealth gap by working to buttress the education system and transportation infrastructure. They also said policy-makers should consider helping redistribute wealth through tax reforms and minimum wage increases.

"Such steps deserve serious public consideration: they can play a valuable role in boosting the incomes of working and middle-class citizens, generating greater tax revenues to support investment, and restoring a sense of fairness to economic growth," according to the report.

University of California, Berkeley research published in June showed America's richest 1 percent captured 55 percent of total real income growth between 1993 and 2014.