New York\u2019s rising political voices, including New York City Mayor Zohran Mamdani, have put inequality back at the center of public debate. The focus is familiar: the gap between rich and poor, and what government can do to close it. But America\u2019s most important inequality problem\u00a0isn\u2019t\u00a0about income.\u00a0It\u2019s\u00a0about rules.<\/p>\n
When Americans talk about inequality, they usually mean outcomes \u2014 who has more\u00a0and\u00a0who has less. But a deeper divide runs beneath those outcomes: the growing gap between states that enable economic mobility\u00a0and\u00a0those that quietly restrict it.<\/p>\n
The\u00a0Economic Freedom of North America report,<\/a>\u00a0from\u00a0market-oriented think tank\u00a0Fraser Institute, captures this divide. It measures how much freedom people have to make economic choices \u2014 where to work, what to invest in and how to build a life. It evaluates states across three areas: government spending,\u00a0taxation\u00a0and labor market regulation.<\/p>\n The results are striking. States like New Hampshire, Tennessee,\u00a0South Dakota\u00a0and Texas consistently rank near the top, thanks to\u00a0relatively light\u00a0fiscal burdens and flexible labor markets. States like New York, California,\u00a0Hawaii\u00a0and New Mexico rank near the bottom. Policy ideas\u00a0like Mamdani\u2019s proposed rent freezes\u00a0and\u00a0raising corporate taxes,\u00a0along with\u00a0higher minimum wages,\u00a0threaten\u00a0to keep New York perennially stuck at the bottom.<\/p>\n These rankings\u00a0aren\u2019t\u00a0just abstract scores. They correlate strongly with real-world outcomes.\u00a0States with higher levels of economic freedom<\/a>\u00a0tend to see faster income growth, stronger job\u00a0creation\u00a0and\u00a0larger inflows of new residents.<\/p>\n This\u00a0isn\u2019t\u00a0mysterious. Rules\u00a0shape\u00a0incentives. Incentives shape behavior. And behavior shapes outcomes. If the wealthiest New York City residents are going to face new tax burdens\u00a0to fund\u00a0Mamdani\u2019s programs<\/a>,\u00a0what\u2019s\u00a0the incentive to stay in the city?<\/p>\n If policymakers want to understand\u00a0inequality, they should begin by evaluating rules that negatively\u00a0impact\u00a0economic freedom.<\/p>\n Consider New Mexico. For the first time in the\u00a0nearly 20-year\u00a0history of the EFNA\u00a0report, it now ranks last among all 50 states. A\u00a0recent analysis<\/a> by\u00a0Matt Mitchell of the Fraser Institute and Paul Gessing of the Rio Grande Foundation finds that New Mexico is the only state to have experienced a long-term decline in economic freedom over the past four decades. That decline has coincided with sluggish job growth, persistently high poverty rates and weak population growth. The authors estimate that even a modest 10% improvement in economic freedom could raise average family incomes by roughly $10,000 per year.<\/p>\n Just across the border, Texas tells a very different story.\u00a0For decades, it has ranked in the top tier of economic freedom. Between 2012 and 2022, Texas added\u00a0nearly\u00a04 million residents<\/a>, more than any other state, and it has\u00a0led the nation in population growth<\/a> for at least 14 consecutive years, according to Census data. Businesses expand here. Workers move to our state. Families stay.\u00a0They do so for a simple reason: the rules\u00a0make opportunity easier to pursue.<\/p>\n This is what often gets lost in today\u2019s inequality debate. Opportunity cannot be mandated. It emerges from a system that either empowers people to act or quietly constrains them.<\/p>\n Call it institutional inequality: when people face radically different economic environments depending on where they live. In one state, starting a business or changing jobs is\u00a0relatively straightforward. In another, it is burdened by higher costs, stricter\u00a0regulations\u00a0and\u00a0fewer\u00a0opportunities.<\/p>\n Those differences compound over time, and they matter far more than any snapshot of income inequality.<\/p>\n No state is perfect. But the pattern is clear. States that allow people to work,\u00a0invest\u00a0and\u00a0build with\u00a0fewer\u00a0barriers tend to generate more opportunity\u00a0\u2014\u00a0not just for some, but for everyone.<\/p>\n If Americans are serious about inequality, they should spend less time arguing over how to redistribute outcomes and more time examining the rules that shape them in the first place.<\/p>\n Meg Tuszynski is a Research Assistant Professor at the SMU Cox School of Business, where she is\u00a0Managing Director of the Bridwell\u00a0Institute for Economic Freedom.<\/p>\n","protected":false},"excerpt":{"rendered":"New York\u2019s rising political voices, including New York City Mayor Zohran Mamdani, have put inequality back at the…\n","protected":false},"author":2,"featured_media":279366,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[27,29,28],"class_list":["post-279365","post","type-post","status-publish","format-standard","has-post-thumbnail","category-texas","tag-texas","tag-texas-headlines","tag-texas-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/279365","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=279365"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/279365\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/279366"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=279365"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=279365"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=279365"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}