There is no denying the extraordinary rise in the incomes of the top one percent of American households over the past three decades. Between 1979 and 2012, the share of all household income accruing to the top percentile of U.S. households rose from 10 percent to 22.5 percent. To get a sense of how much money that is, consider the conceptual experiment of redistributing the gains of the top one percent between 1979 and 2012 to the bottom 99 percent of households. How much would this redistribution raise household incomes of the bottom 99 percent? The answer is $7107 per household…
Now consider a different dimension of inequality: the earnings gap between U.S. workers with a 4-year college degree and those with only a high school diploma… the earnings gap between the median college-educated and median high school–educated among U.S. males working full-time in year-round jobs was $17,411 in 1979, measured in constant 2012 dollars. Thirty-three years later, in 2012, this gap had risen to $34,969, almost exactly double its 1979 level. Also seen is a comparable trend among U.S. female workers, with the full-time, full-year college/high school median earnings gap nearly doubling from $12,887 to $23,280 between 1979 and 2012…
To put the numbers on the same footing, consider the earnings gap between a college-educated two-earner husband-wife family and a high school–educated two-earner husband-wife family, which rose by $27,951 between 1979 and 2012 (from $30,298 to $58,249). This increase in the earnings gap between the typical college-educated and high school–educated household earnings levels is four times as large as the redistribution that has notionally occurred from the bottom 99 percent to the top one perrcent of households. What this simple calculation suggests is that the growth of skill differentials among the “other 99 percent” is arguably even more consequential than the rise of the one percent for the welfare of most citizens… Wage inequality has risen throughout the earnings distribution, not merely at the top percentiles…
How much does the rising education premium contribute to the increase of earnings inequality?… Goldin and Katz found that the increase in the education wage premium explains about 60 to 70% of the rise in the dispersion of U.S. wages between 1980 and 2005 and, similarly, Lemieux calculated that higher returns to postsecondary education can account for 55% of the rise in male hourly wage variance from 1973–1975 to 2003–2005. Firpo et al. found that rising returns to education can explain just over 95% of the rise of the U.S. male 90/10 earnings ratio between 1984 and 2004. That is, holding the expanding education premium constant over this period, there would have been essentially no increase in the relative wages of the 90th-percentile worker versus the 10th-percentile worker…
Let us assume for the sake of argument that the rise of income inequality is entirely a market phenomenon. Would this imply that there is no role for public policy? A moment’s reflection suggests otherwise. As the economist Arthur Goldberger once famously observed, the fact that nearsightedness is substantially a genetic disorder has no bearing on whether doctors should prescribe eyeglasses. What is relevant is whether the benefits of addressing myopia exceed the costs. In the case of myopia, the availability of eyeglasses make this an easy call.
Although there is no “remedy” for inequality that is as swift or cheap as eyeglasses, prosperous democratic countries have numerous effective policy levers for shaping inequality’s trajectory and socioeconomic consequences. Policies that appear most effective over the long haul in raising prosperity and reducing inequality are those that cultivate the skills of successive generations: excellent preschool through high school education; broad access to postsecondary education; and good nutrition, good public health… Such policies address inequality from two directions: (i) enabling a larger fraction of adults to attain high productivity, rewarding jobs, and a reasonable standard of living; and (ii) raising the total supply of skills available to the economy, which in turn moderates the skill premium and reduces inequality.
Massachusetts Institute of Technology professor David H. Autor, in Science, explaining why providing all children with high-quality education is critical to stemming income inequality.
I get asked a lot about how I got involved in this, in education, and advocating for school choice. And the answer for me is pretty much the same as Lisa (Leslie, the former WNBA star who spoke earlier) and Faith (Manuel, the mother of a tax credit scholarship student, who also spoke earlier): I became a mother… And that’s probably the same answer a lot of other people in this room would have. Like every mother, like every other parent, I remember holding my son Eli in my arms for the very first time and looking at him and realizing that the life I knew was over. (laughter) And going forward, my life would be dedicated to caring for this child, and protecting this child, and trying to ensure that he had every opportunity possible to be all that he could be. And Number one on my list, in thinking about this, and thinking about both my kids now, I have two boys, is and was their education.
And I was thinking how fortunate I had been in my life. I had this career in television. And I lived in New York City. And my kids were going to have so many options available to them. I had so many choices and they would throughout their lives have so many opportunities because of this. And I think with that comes the recognition that that’s not the case for most people. And those choices and those options are not available to mothers who care about their kids just as much as I do, and have the same hopes and dreams for their children that I have for mine. And who want their child to have every opportunity in life just like I did. If we believe that education is a fundamental right, then everyone should have that choice.
It never ceases to amaze me that this very simple idea, that a parent who wants to try to find a school, a better school to try to give their child a better life, should have that choice. The idea that this is somehow controversial is amazing to me.
Campbell Brown, at the American Federation for Children’s annual conference, discussing why expanding school choice and Parent Power for all families should be the norm, not the exception, in American public education.
In the end, while [Andy] Smarick and [Juliet] Squire identify a serious roadblock to education reform, they may not have been completely transparent about what is at stake here – exactly the shift away from direct public control that has the critics of the “education reformers” so excised. SEA’s may not be the most efficient, nimble agents of change in education policy – but perhaps that’s the point: they are not supposed to be… This fact constantly frustrates critics of our school system, of course: they want more change, more quickly – and that is really at the heart of this report’s recommendations.
Given this frustration, the major flaw in Smarick and Squire’s proposal is not identifying the agent of change for their recommendations or the constituency that will lobby for a still-powerful but stripped down SEA. But this flaw in turn is connected to another: what Smarick and Squire propose is a curious hybrid that has neither diminished powers nor fewer responsibilities for the SEAs. The risk of implementing the reforms the authors call for is that the result would be a still more complex structure of management and implementation that far from promoting efficiency, would result in endless friction between public and private organizations.
Peter Meyer of City University of New York’s Institute for Education Policy on why a Thomas B. Fordham Institute proposal for revamping state education governance isn’t exactly as sensible as it should be.