If there is a thread running through the books I read this summer I suppose it is inequality: its causes and consequences; the real life and not so real life—but no less true—experiences of living these causes and experiencing the consequences; and what can—or for that matter can’t—be done about it.
Inequality in earnings and incomes has been a very hot topic in labour economics for the last two decades, but the relevance of this research and its use in public policy discussion has now become strikingly clear.
My last academic year was dominated by the rise of inequality on the public and public policy radar screen, and I have been so tied up in these discussions that I was carried, as if on a train leaving the station, right along throughout the entire summer.
I re-read a speech President Obama made on the topic. Last December he spoke about a type of inequality that “hurts us all”, and made a link between equality of outcomes and equality of opportunities.
In an article that appeared earlier this year, The New York Times described the extent to which rich parents can expect to see their children grow up to be rich adults, as well as the likelihood that the poor raise children destined for poverty.
Surprisingly enough, the article came close to concluding that if Americans are interested in living the American Dream—where family background has little influence on adult outcomes—they should move to, of all places, Denmark, or if crossing the Atlantic seems daunting, then, as a second best, to Canada.
Indeed, Denmark has been a darling of sorts ever since Richard Wilkinson and Kate Pickett highlighted in their book, The Spirit Level, that Danish life is so much better along a whole host of dimensions because income inequality is so much lower.
But Denmark has a little secret, one it shares with Canada, about how kids get jobs, and about how this determines life chances even in places with low inequality.
In 1999 Tony Blair pledged to end child poverty in the United Kingdom within 20 years.
There were three pillars to this pledge: (1) making work pay; (2) increasing income support to families with children whether or not parents are working; and (3) investing more in children.
Jane Waldfogel of Columbia University examines each of these pillars in a presentation to Cornell University earlier this year. She also discusses the results of these policies and the lessons for the United States.
Waldfogel’s one hour presentation is a summary of the major messages in her book Britain’s War on Poverty published by the Russell Sage Foundation.
On a warm evening last spring I found myself at a dinner party in the lush suburbs of a small Ivy League town not far from New York City.
The main concern of a fellow economist was the trouble his son was having raising his new family: that would be the son living in Manhattan, the one making $10 million a year.
It appears there is a bidding war for spaces in good kindergartens and, as we all know, prices skyrocket when demand outstrips supply.
And demand has been rising. We also know that.
So the most striking claim in the Economic Report of the President for 2012 is not that the share of earnings accruing to the top 1%—a share that was about 8% during the early 1980s—stands at close to 20%. After all, this is old news, the stuff of Occupy Wall Street.
The New York Times posed this question to a group of experts, Richard Florida, Isabel Sawhill, Timothy Smeeding, and five others, including me.
More specifically, they asked:
There is a growing consensus that it is harder to move up the economic ladder in the United States than in many other places, like Canada. Should more Americans consider leaving the U.S. to get ahead? Or can the U.S. make changes to be more of a “land of opportunity”?