Thursday, January 23, 2014

Economic Inequality is Dangerously Real - Now What Will We do About It?

You've heard it before - and it's true - when I was growing up the expectation was that we would live lives better than our parents. Now, I was fortunate in that my parents were not poor, they were working to middle class who made sure that we lived in relative comfort.

And you've heard it before - and it appears to be true - that our economy today does not foster that same type of confidence. Indeed, it appears that our children, depending upon the circumstances under which they were born, have less chance of experiencing the upward mobility I and my friends did as we grew up.

Jim Tankersley, writer for the Washington Post posits that same reality in an article published today...

"Children growing up in America today are as just as likely — no more, no less — to climb the economic ladder as children born more than a half-century ago, a team of economists reported Thursday.
Even though social movements have delivered better career opportunities for women and minorities and government grants have made college more accessible, one thing has stayed constant: If you are growing up poor today, you appear to have the same odds of staying poor in adulthood that your grandparents did.
"The landmark new study, from a group led by Harvard University's Raj Chetty, suggests that any advances in opportunity provided by expanded social programs have been offset by other changes in economic conditions. Increased trade and advanced technology, for instance, have closed off traditional sources of middle-income jobs...
"...The paper suggests that "it is not true that mobility itself is getting lower," said Lawrence F. Katz, a Harvard economist and mobility scholar who was not one of the paper's authors but has reviewed the findings. "What's really changed is the consequences of it. Because there's so much inequality, people born near the bottom tend to stay near the bottom, and that's much more consequential than it was 50 years ago."
What are the consequences of such lagging economic insecurity? Certainly it depresses incentives for academic achievement; it reduces incentive for younger Americans to excel when they have little or no experience in seeing an upwardly mobile adults with whom they are familiar; and it depresses incentive to strive for upward mobility in the jobs that youth typically find employment.

What's worse is that we are nurturing a culture in which inequality is becoming the norm and in which an underclass is being frozen in place by policies that are making it harder for young people to get ahead.

The article goes on to say...

"The findings from Chetty and his co-authors are likely to set off a new round of debate over mobility and inequality, which Obama recently called "the defining challenge of our time."
"There's something in the paper to challenge both political parties' converging approaches to the issue. It suggests that both sides are wrong to talk about mobility declining. It explicitly calls into question the "Great Gatsby Curve" invoked by the Obama administration, the idea that widening inequality will depress mobility over time.
"But the findings also suggest that Republicans are wrong to downplay inequality and focus solely on improving mobility."
And the authors are right. The Obama administration's focus on inequality could indeed lead to a self fulfilling prophecy and Republicans unwillingness to acknowledge inequality instead of developing policies that improve mobility will only cause the problem to worsen.
It's yet another reason for our politicians to work together to identify a solution to one of America's growing, festering problems...

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