The author, Neil Irwin, argues that one of the few bipartisan ways to address this inequality, an increase in education, would actually not help decrease economic disparity. Irwin bases this off of the work of Brad Hershbein, Melissa Kearney, and Lawrence Summers, who stated here that "more education would be great news for middle and lower-income Americans, increasing their pay and economic security. It just isn’t up to the task of meaningfully reducing inequality, which is being driven by the sharp upward movement of the very top of the income distribution."
To demonstrate this, this group ran a simulation that assumed that
"10 percent of non-college-educated men of prime working age suddenly
obtained a college degree or higher, which would be an unprecedented
rise in the proportion of the work force with advanced education. They [also]
assume[d] that these more educated men [would] go from their current pay levels to
pay that is in line with current college graduates, minus an adjustment
for the fact that more college grads in the work force could depress
their wages a bit."
The result was that in the simulated world "middle-income workers earn more — $37,060 in simulated 2013 earnings for
a person at the 50th percentile, compared with $34,000 in the real
world, a 9 percent improvement. But that improvement brings that 50th-percentile worker only back closer
to the inflation-adjusted level of income he enjoyed in 1979, which was
$37,838. Meanwhile, the 90th-percentile worker in this simulation holds
onto (and indeed improves upon) the sharp income gains of the past 34
years. Annual earnings at the 90th percentile climbed from $75,700 in
1979 to more than $100,000 in both the actual 2013 data and the
simulation with higher education levels."
According to this study, it seems that education, while helpful, does not curb the widening economic inequality seen since the financial crisis. I think that it poses an interesting question as to whether it is possible to find a bipartisan measure to counteract economic inequality?
Economic inequality and the effects education has, or doesn't have on it, is a very interesting topic. It's obviously inevitable that there is going to be some economic inequality in the world, but it is getting to the point where it can, and will, have negative effects on our economy and our society as a whole. Some income inequality is necessary to provide incentives for people to work harder, develop new technologies, and just be the best they can at their job. Too much income inequality though, may cause people to think that there is no point in working harder or innovating because the incentives aren't big enough. I honestly do not know if there is a bipartisan measure that can be taken to counteract economic inequality. In my mind, it seems that a radical change would have to be made in order to fix and control economic inequality in our society.
ReplyDeleteIncreasing education efforts isn't enough to overcome the widening gap occurring today. Although the increase is desirable from multiple points of view (I'm pretty confident in saying all parties can comfortably support a stronger educational system), we know that inequality is a more deeply rooted problem that would require more than this education fix. The gap is so large at this point, there needs be drastic reform and change to change it. But how can that change be made by a polarized government where inequality has given certain wealthier people a crazy amount of control over economic and political systems? Something should be pumped into the middle class but I don't know how to do that in terms of policy.
ReplyDeleteI think this is a very interesting article and, I do believe there are ways to tackle the economic inequality that exist in the United States. I would have to argue that investing in the education system can play a role in helping to close the economic inequality gap, regardless of its level of impact it is yields a positive outcome. However, I do think other methods such as increasing wage rate and, increasing tax cuts can help to reduce the current economic inequality. As far as completely getting rid of economic inequality, I don't think the United States can reach this kind of state but it can certainly get close to it as possible.
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