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7 responses to “Chart of the Day: Education Gap vs. Income Gap”

1. 

   Groveton

   August 22, 2011

   Jim:

   Interesting post. However, I think you should fully consider the method by which the EduGini is calculated. See page 6, Table 2 of your cited report for a good illustration. Pay special attention to Case 2 vs Case 3.

   However, beyond statistical quirks in the EduGini, the overall point remains … we cannot assume that education alone will solve the income and wealth gap issues.

   Here are a list of things which need to be addressed:

   1. Education – whole education can’t solve all the problems, it can solve some of the problems. If you doubt that, take a look at the educations of the hyper-rich hedge fund managers sometime.

   2. Curriculum – public colleges and universities should demand a fixed and strenuous “core skills” curriculum for at least the first two years of college. As a father with two sons in public colleges I am amazed at what some students “get away with” regarding their course selection. Even a modestly attentive student can cobble together an utterly worthless curriculum and walk away with a bachelor’s degree these days. Enough! If taxpayers are contributing money to public colleges and universities than those nests of liberalism can grow spines and make math, science, english, etc mandatory parts of every curriculum.

   3. Automation. One possible explanation for your chart is that formerly good jobs are being “automated away” faster than educational attainment equalizes. Worse, the speed of this automation is increasing at an increasing rate. I am very skeptical of the belief that advancing technology will solve all of humanity’s problems. While advancing technology is amazing in its speed and breadth, it is moving forward faster than people in the developed world can advance their societal belief systems. This mismatch between technology and society is a huge problem.

   4. Off-shoring. This is the dirty litte secret of both political parties. While not new, the cumulative effect of off-shoring American jobs to developing countries is having a devastating effect on the American economy. Once again, te speed with which this is happening is faster than our society’s ability to absorb it. Yet one hears nearly nothing from Democrats of Republicans, liberals or conservatives about this. One must marvel at how completely “bought and paid for” our political elite really is.

   5. Immigration. Supply and demand sets price. Period. Allowing a hug inflow of poorly educated illegal aliens add to the supply of labor at the bottom of the economic totem pole. This reduced the price paid for that labor. Period. If liberals really cared about America’s poor, they would be the first to clamp down on the illegal immigration of poorly educated people into the US.

   6. Societal norms. Modern society has developed a wide variety of avenues for the destruction of acceptable social standards, especially among the young. In almost every case, this destruction of societal ethics comes in the form of “culture” sold to the American people for the immense enrichment of a very few at the top of the economic ladder. Examples include rap music favorably depicting the killing of police and drug culture, movies like Pulp Fiction which romanticize obscenely graphic violence, video games that carry killing to an art form, television shows that glorify casual drug use and casual sex. I have always found it ironic that the purveyors of this endless river of filth are almost always the uber-liberals who claim that they are worried about the future of America’s children and would be the first to stand against the reciting of the pledge of allegiance in the classroom.

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2. 

   James A. Bacon

   August 22, 2011

   Groveton, I commend you for the items on the list — at the very least a good starting point for a discussion. For the most part, I agree with you.

   I would refine your argument regarding off-shoring. For the most part, economists agree in thinking that off-shoring (or globalization, which also includes other countries off-shoring to the U.S.) creates a net economic gain for the United States. The problem is that the economic gains are not distributed equally. The people losing jobs tend to be blue collar and pink collar, while the people gaining jobs are white collar, executives and entrepreneurs. Getting back to your main point, globalization does increase *income inequality* even if it contributes to overall economic growth.

   I think the same thing can be said of automation. Overall, automation (a major contributor to growth in productivity) is a driving force of rising living standards. It also creates new jobs even as it destroys old ones. Again, we must distinguish between the impact on the economy and the impact on income distribution. Automation contributes to the growth in overall income… but it also contributes to the growing inequality in income.

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3. 

   larryg

   August 22, 2011

   I also compliment Groveton – and would add / expand that “education” for the 21st century workforce is not only not a high school education but it’s also not the traditional college education except for the core skills that Groveton alludes to.

   Only 25% of Virginia high school graduates meet the international standard for proficiency in language, math and science and 75% are unable to read a technical manual describing a modern process that is central to a business need. It’s called critical thinking in solving real world problems.

   75% can’t read to understand -much less articulate the problem nor render a solution to it.

   the 25% that do almost always come form college-educated parents and themselves are bound for college – but half or more of them squander that gift on things that are not in demand in the 21st century job market.

   Groveton know this. He said he just hired several folks. I bet .. there was a whole lot more looking into their demonstrated knowledge and experience than what degrees they hold.

   Oh.. and you cannot realistically be a “jobs” gov if you won’t deal with the realities of our substandard education system – both K-12 and higher ed.

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4. 

   larryg

   August 22, 2011

   note Virginia’s rank on the relative rigor of each state’s proficiency standards

   http://educationnext.org/files/ProficiencyStandards_ENvsNCES.jpg

   40th in 4th grade reading and math and 45th in 8th grade reading and math.

   The funny thing about this is that the Virginia Dept of Education proudly proclaims the success of the SOL standards… all the time,

   but when you look at the realities, the SOLs are not so hot.

   Virginia has also declined to adopt Common Core Standards that 46 other states have adopted – why?

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5. 

   Groveton

   August 22, 2011

   Jim:

   I wonder about the mid term effect of automation and off-shoring on the economy of the third most populous country on the planet. I’d be a lot happier about these trends if I were a native of Finland or Switzerland. Anything that reduces the benefit of a large population is a comparative disadvantage to countries with large populations. This is especially true when the population is overpriced for the work at hand.

   My perspective comes from working with hundreds of large corporations over the years. Companies which fail to cut workers in high cost countries in the face of automation and off-shoring always fail. I wonder why that isn’t true for countries.

   However, let’s say you (and the economists) are right. Let’s say it’s good for the American economy and very good for some people in that economy. Now what? Do we create a “yob (or chav) culture” such as seems to exist in England now?

   If more education won’t close the income / wealth gap, what choices are left?

   Income redistribution to a growing group of citizens who are umemployable (or, at best, are employed in “make work” jobs)?

   Reduced population through mandatory family planning (see: China)?

   Isolate and reduce automation while banning the shipment of jobs offshore?

   I believe this wil become the most important political issue in the United States over the next 25 years.

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6. 

   James A. Bacon

   August 22, 2011

   Groveton, you are asking excellent questions. I worry about the same thing. If our welfare policies and popular culture have created an uneducable population comparable to Britain’s yob class that is incapable of adapting to a globalized economy, which I fear is the case, do we just give the yobs more welfare — thus continuing the cycle of dependency and failure? Do we halt automation and globalization, thus halting economic progress? Do we cut off people from welfare, with unpredictable social consequences and blowback to children and other innocents? None of the options are palatable. We have painted ourselves into a corner.

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7. 

   Darrell

   August 23, 2011

   Economic progress? What happens when the growing population of yobs in the world no longer buy the crap the robots make? Eventually they WiLL run out of other peoples money. There is a clash of paradigms occurring that you aren’t seeing. The first clues should have been the riots and rebellions.

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