income inequality

  • Source: "Coming apart"  

    Segregation Over TimeIn February of 1968, the Kerner Commission report was released, warning of deepening divisions between black and white America. Fifty years on, de jure segregation has been virtually eliminated. A 1948 Supreme Court decision prohibited race-based covenants that forbid whites from selling or renting to anyone of a different race. The 1968 Fair Housing At eliminated "red lining" where real estate agents herded peoole into separate neighborhoods based on race. However, since 1968, de facto segregation by both race and income has increased. 

     14 million Americans live in areas of concentrated poverty, defined as a region where 40% or more of the population makes less than the federal poverty level or about $25,000 of annual income for a family of four. This number has doubled (!) since 2000 and it applies disproportionately to people of color. 25% of all low income black families live in areas of concentrated poverty versus 17% of Hispanics and only 8% of poor whites. Today's most segregated areas (see chart above) are inthe urban Northeast.

    The impacts of segregation take a long time to right themselves. Even today as shown by a 2016 Pew study, the median income for a black family headed by the holder of a college degree is $26,300. The median income fr the same type of white family is $301,000! Sean Reardon of Stanford has demonstrated that the achievement gap between low income and high income students is twice as great as the gap between black and white students.

    Possible solutions: HUD had a "Moving to Opportunity" program in which poor families were given vouchers to move into more affluent areas. Chidren in this program who moved before age 13 grew up to have incomes 30% higher than children who stayed behind in areas of concentrated poverty. The HUD program is underfunded - only one in four of those who qualify for it can obtain entry into the program. Waiting lists are years long.

  • Source: Economist: 24 Mar 18 "Talent Shows"         

    IQ and accomplishmentOld idea; intelligence as a child often equated to a troubled adulthood. This is not borne out by recent research which indicates that of the top one-half of one percent scorers on childhood IQ tests, a full 30% go on to achieve doctorates (compared to 1% of the population overall). On the chart, note the higher the SAT score, the more likely the student is to go on to get a PhD, write a paper and file a patent. Work by Chetty at Stanford shows that there is also a socioeconomic component to future intellectual success - children of wealthier parents are more likely to file patents or get PhDs that poorer studentswith the same level of intelligence. Chetty calls these poorer children who fall through the cracks later in life "Lost Einsteins". If women, minorities, and children from low-income families were to invent at the same rate as white men from high-income (top 20%) families, the rate of innovation in America would quadruple. Important to be on the same page regarding "intelligence", best defined as "the ability to think abstractly and use reason to plan and solve problems". Today, there is a shift away from using the label "intelligence" ad instead talk about "high ability". And to extend the description of intelligence to include spatial ability.

    Some policy recommendations: first, childhood ability testing must be universal and not voluntary. 2015 paper from Card and Giuliano shows that when a Florida school district shifted to universal screening, admissions to gifted programs increased by 180% amongst poor children (130% increwse for Hispanic kids and 80% for black kids). Next, test for more than just IQ - test also for spatial ability. Finally, Project Bright Idea, developed at Duke University, saw 10,000 typical nursery and primary-school pupils taught using methods often reserved for brainier kids—fostering high expectations, complex problem-solving and cultivating meta-cognition (or “thinking about thinking”). Nearly every one of them went on to do much better on tests than similar peers.

    In rebuttal, there are researchers that argue that intelligence is not the best predictor of future success. Angela Duckworth in her book "Grit" (2016) believes that task-motivation or persistence is the best predictor of future success and it can be taught. Anders Ericson of FSU believes in the power of deliberate practice over a long period (the 10,000 Hour Rule). Others like Carol Dweck of Stanford thinks the mindset of the child is important - either a "growth mindset" or a "fixed mindset". While this approach is now popular in education, there is little evidence to back it up.

    Source: Chetty on Lost Einsteins

    Source: Card and Giuliano on universal screening

    Source: Duke's Project Bright Idea

  • Source: "Free exchange: Left behind"          

    During the 1970's, rising inflation and unemployment convinced even Democrats that freer markets were the only way to guarantee growth. By 1992, the Democratic Party had abandoned its Big Government approach in favor of technocratic centrism - using education and mildly progressive taxation as a way to smooth off the rough edges of economic inequality. 

    In the 2000's, wage growth stalled as George Bush spent Clinton's budget surplus on tax cuts for the wealthy. Income inequality has continued to increase. The election of Trump has now liberated those on the left to abandon centrism for bolder approaches.

    Senators Sanders and Warren talk of free college, reduced student debt and single-payer health care (which would allow people to leave jobs they loathe without losing health insurance, increasing worker power). Others like the Center for American Progress, have advocated for job guarantees in which the government would be the employer of last resort. Finally, there is universal basic income or UBI which would create efficiencies as it replaces the welfare bureaucracy with a single cash payment. It also solidifies the idea that everyone should benefit from economic growth. 

  • Vox: "Subtle ways colleges discriminate against poor students"  

    Educational AttainmentAmerica is not a meritocracy. The figure on left demonstrates that it is the father’s level of education that is the primary factor in determining what level of education the child will receive. “College is a finishing school for affluent families and a glass ceiling for everyone else.” Richard Reeves in his book The Dream Hoarders argues this is structural - the affluent use their wealth to gain favors unavailable to the wiring class. Think of structures like legacy admissions or zero-sum situations like using your county club connections to get your child that coveted internship that now cannot go to anyone else. Socioeconomic class controls the way we think, the way we see the world and the way we parent. Affluent parents stress the teaching of independent values like expressing yourself, questioning authority, solving your own problems. Low income parents stress interdependent values like working well with others and following authority (see Annette Lareau’s Unequal Childhoods). College admissions officers select for applicants with strong independent skill sets, not strong interdependent ones. This is a subtle but effective way that colleges discriminate against low income students.

    College CompletionOnce in college, low income students suffer from lower completion rates. This connects back to socioeconomic status. Poor people don’t have a safety net, thus they are risk averse. They avoid speaking out. In college, such students are not going to advocate for themselves, not going to question a grade, not going to ask to speak to the professor. This behavior reinforces itself. As students respond to setbacks with isolation, it becomes ever more difficult to change their situations. Psychologists have a concept - “stereotype threat” - as low income students begin to struggle, they begin to believe that stereotypes about poor people (lazy, ignorant etc.) may actually be true. Finally, the motivations for going to college differ between low income students (I'm going to college to help my family) versus high income students (I'm going to colleg to expand my knowledge of the world). From the article: "In short, we just don't have a great idea of how advantaged or disadvantaged we are. But this means that, when lower-class students begin struggling in college, they blame themselves for their struggles. Gibbons says most of them were held to high standards in their hometowns and by their families, so asking for help feels like failure. So they feel they are failing because they aren't as capable. It reiterates the fear that they are the stereotype of the undereducated lower-class kid."

    A study on first-generation college students

    A study on college retention and graduation rates