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The “Economic Inequality Impact Assessment”

A further concentration of income and wealth in fewer and fewer households, and the accompanying rise in poverty and the decline of middle-income economic stability, compels policymakers at all levels to conduct a more systematic assessment of economic inequality impact before they make decisions that could further exacerbate inequality. We propose that all economically significant legislation and new state regulations in Minnesota should be subjected to an analysis that measures the policy’s impact on economic inequality.

Legislators and other policymakers in Minnesota could develop an Economic Inequality Impact Assessment (EIIA) for all major policies that are likely to have a measurable effect on income or wealth distribution.

Minnesota already has a reputation amongst the states for distinctive, high-quality economic measurement tools. The Price of Government measurement and the biennial Tax Incidence Study, both launched in the 1990s and updated regularly, provide uniquely detailed perspective on the overall size of state-and-local government as a percent of income (Price of Government), and how the taxes for that public investment are paid by economic strata (Tax Incidence Study). These tools have greatly enabled quantitative analysis for relative fairness and equality.

Support for measuring projected inequality, particularly as it relates to poverty, has come in recent years from a growing national coalition of community and philanthropic efforts. The Washington DC based Center for Law and Social Policy (CLASP) published a summary of federal and state efforts that align with a CLASP initiative for Poverty Impact Projections (PIP). The PIP concept as described in the 2011 CLASP report could easily be applied to a broader Economic Inequality Impact Assessment.


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