The Great Divide: Inequality and its Implications


I’ve been meaning to read George Packer’s The Unwinding: An Inner History of the New America since I heard him interviewed on a Matt Miller podcast two months ago.  As is usually the case, there are too many things going on, and I haven’t gotten to it yet.  However, I have stumbled upon an enticing New York Times series “The Great Divide,” moderated by economist Joseph Stiglitz, which I would like to mention here.  You may be saying to yourself, “Too much. Too sad. Too serious. No thanks.”  I understand that feeling.  We are surrounded by diversions which keep us from thinking about the big-picture issues of our times.  We hear too many politicians give platitudes and too much high-frequency, rapid-fire debating on television, meant to polarize us more than unify us.  I’ve spent much of the last decade wanting to insulate myself from the bigger picture issues, feeling small and powerless, and generally not having the energy or wanting to carve out the time to keep myself aware.  This is a series of short essays (highly readable, not dense) which are enough to enlighten without being too much to absorb.  Highly recommend it.

scales

THE GREAT DIVIDE

The Great Divide is a series on inequality — the haves, the have-nots and everyone in between — in the United States and around the world, and its implications for economics, politics, society and culture. The series moderator is Joseph E. Stiglitz, a Nobel laureate in economics, a Columbia professor and a former chairman of the Council of Economic Advisers and chief economist for the World Bank.

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One of the essays, “Lifelines for Poor Children,” focuses on the importance of early childhood education on fighting inequality in America.

Here’s the opening:

What’s missing in the current debate over economic inequality is enough serious discussion about investing in effective early childhood development from birth to age 5. This is not a big government boondoggle policy that would require a huge redistribution of wealth. Acting on it would, however, require us to rethink long-held notions of how we develop productive people and promote shared prosperity.

Maxwell Holyoke-Hirsch

Everyone knows that education boosts productivity and enlarges opportunities, so it is natural that proposals for reducing inequality emphasize effective education for all. But these proposals are too timid. They ignore a powerful body of research in the economics of human development that tells us which skills matter for producing successful lives. They ignore the role of families in producing the relevant skills They also ignore or play down the critical gap in skills between advantaged and disadvantaged children that emerges long before they enter school. Read more…

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Another essay, “The Great Stagnation of American Education,” discusses the state of American education, from elementary to high school to higher education.  Here’s the opening:

For most of American history, parents could expect that their children would, on average, be much better educated than they were. But that is no longer true. This development has serious consequences for the economy.

The epochal achievements of American economic growth have gone hand in hand with rising educational attainment, as the economists Claudia Goldin and Lawrence F. Katz have shown. From 1891 to 2007, real economic output per person grew at an average rate of 2 percent per year — enough to double every 35 years. The average American was twice as well off in 2007 as in 1972, four times as well off as in 1937, and eight times as well off as in 1902. It’s no coincidence that for eight decades, from 1890 to 1970, educational attainment grew swiftly. But since 1990, that improvement has slowed to a crawl.

Companies pay better-educated people higher wages because they are more productive. The premium that employers pay to a college graduate compared with that to a high school graduate has soared since 1970, because of higher demand for technical and communication skills at the top of the scale and a collapse in demand for unskilled and semiskilled workers at the bottom.

As the current recovery continues at a snail’s pace, concerns about America’s future growth potential are warranted. Growth in annual average economic output per capita has slowed from the century-long average of 2 percent, to 1.3 percent over the past 25 years, to a mere 0.7 percent over the past decade. As of this summer, per-person output was still lower than it was in late 2007. The gains in income since the 2007-9 Great Recession have flowed overwhelmingly to those at the top, as has been widely noted. Real median family income was lower last year than in 1998.

There are numerous causes of the less-than-satisfying economic growth in America: the retirement of the baby boomers, the withdrawal of working-age men from the labor force, the relentless rise in the inequality of the income distribution and, as I have written about elsewhere, a slowdown in technological innovation.

Education deserves particular focus because its effects are so long-lasting. Every high school dropout becomes a worker who likely won’t earn much more than minimum wage, at best, for the rest of his or her life. And the problems in our educational system pervade all levels.

http://opinionator.blogs.nytimes.com/2013/09/07/the-great-stagnation-of-american-education/?_r=0

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