(Analysis) Data from the Census Bureau show a widening gap between rich and poor in the US. Whether you directly compare the incomes from upper-income groups with lower-income groups, or construct more statistically sophisticated measures, the data show the same worrying trend: income inequality in the US is on the rise, especially since 1979.
One reason for growing inequality is the rising share of income going to capital, rather than to labor (previous content from WNY-WJ about this phenomenon is available here). Because wealth, including capital assets like stocks and bonds, is even more unequally distributed than income, any rise in the share of income going to capital assets will increase income inequality – this is basic math.
Rising inequality too often provokes a weak response from people, sometimes only the response: “who cares?” There are many reasons why we should care – including political and economic, but one that is too often overlooked has to do with eduction, specifically the results from education at the primary (grammar school) and secondary (middle and high school) levels. If a student’s academic performance can be linked to income via socio-economic indicators, then what will rising inequality mean to youth or new generations of Americans?
Anecdotal evidence is abundant for worsening performance in US schools during the last decades. This prompts concern – either actual or only perceived, that the US is falling behind other countries. If true, then we are essentially failing to prepare our children for the future in a very interconnected and interdependent world, where competition from overseas is as meaningful as competition literally right next door. Either way, schools in poor areas generally perform worse than schools in wealthy areas, and this is the biggest problem on the ground in US schools.
One very likely reason for any decline in performance by US students is growing income inequality. A study released by PISA shows that the indicators they use to classify socio-economics can explain 17% of the differences between student performances on a standardized reading test in the US. This compares moderately well with the average for OECD countries – our peers of well-to-do nations, being just a little higher than the average, but not significantly different from the norm.
Some might now say: “so what?” … well, the data show that income is important to educational outcomes, and it shows that the US is probably doing as much as other rich countries are doing to address the problem (probably even a little more, because the US is significantly more unequal than most other rich countries). These two take-aways have important implications for growing inequality in the US, specifically its effect on education.
First, if inequality can explain differences in student performance, then growing inequality will tend to split student performance into 2 groups: those who do better, and those who do worse. Because part of the phenomenon of rising inequality in the US is growing impoverishment, performance relative to the past could very well decline, simply because enough are falling into poverty.
The second implication is perhaps even more worrisome than the first. It may prove very hard for educators to address the problems caused by growing inequality within schools, because we are doing so much already. What this implies is that the “low-hanging fruit” have been picked, leaving only more difficult and costly solutions to be tried.
If many problems with student performance can be explained through inequality, then trying to “fix” the education system, rather than reduce inequality, is going to be very costly and require perpetual effort. Putting teachers in the spotlight for a problem within American society that is largely beyond their control is inefficient. We are wasting effort and treasure by trying to treat a symptom, rather than curing the disease.
Labor, facing the brunt of both the inequality and education problems, is doubly interested in seeing the source of these problems – the falling share of income going to work, repaired.