Many Causes! Many Solutions!

Another round on education and inequality:

Incidentally, this isn't all an academic discussion. The question of whether inequality is a simple function of education is important. If so, then it can simply be solved by sending more people to school (though that, as Matt does point out, is very hard). If not, then it's a function of any number of forces, ranging from globalization to tax rates to corporate culture, that might require more direct government intervention This is why folks like Bush are invested in the education explanation, and say things like, "The reason [for inequality] is clear: We have an economy that increasingly rewards education and skills because of that education," and David Brooks writes columns that pin inequality entirely on "the education gap." The gap in education is a problem, to be sure, but it's been a long time since it was a plausible driver of the increase in inequality.

I think this is a little crazy. Yes, some conservatives have overstated the role of the skill premium in growing U.S. income inequality over the past 35 years. But the fact that it's not all skill premium, doesn't mean it's not partially skill premium. There are several different kinds of factors at work, but inequality has grown, in part, because the proportion of people graduating from college hasn't kept pace with the growing labor market demand for college graduates. What's the sense in denying this? Similarly, what difference does it make if the skill-related component of growing inequality happened in the 1980s? If it had happened in the 80s and then been reversed that would be a good reason to ignore this element of the picture. But it happened in the 80s and then has just stayed with us. But it should still be reversed!

Now I agree, on top of the skill premium element of inequality -- the tendency of the top 20 percent of the population to pull away from the top 80 percent -- we've also seen another phenomenon in which very tiny groups (the top 1 percent, the top 0.01 percent, etc.) pull away from the rest of the crowd. This is in many respects a troubling social phenomenon that calls for a policy response (restoring the estate tax comes to mind) but the other thing is also a troubling social phenomenon in its own right. Meanwhile, it's not at all clear to me why so many liberals have decided to agree that aspiring to increase the number of people who finish college should be coded as a "conservative" policy idea when the most promising solution is probably huge increases in public spending on early childhood education. Nothing about doing that would stop us from also making it easier to organize unions, or raising the minimum wage, or whatever else.