I will begin by citing some key facts--and then the author's and my own conclusions.
1. On
primary and secondary education.
To note that as late as the 1930s, America was virtually alone in
providing universally free and accessible secondary schools (page 88). By the end of the century, Europe had
caught up with or exceeded average educational attainment in the United States.
2. In
1970 the high school graduation rate stopped climbing for the first time since
1890. Since 1980 it has leveled
off at about 75%.
3. While
the college attendance rate in the United States has continued to rise, the
college completion rate has slowed sufficiently to put our 25-34-year-olds
behind many other countries including Canada, Japan, Korea, Australia, Belgium
and Ireland. We are now in the
middle of the pack.
- Among other things, this highlights the need for us to be bringing children into technical colleges for specific degrees matched with developing job markets.
5. The
book tells a crystal-clear picture of how we have constantly resisted
immigration.
For example, the immigration of Southern
and Eastern Europeans, who accounted for more than 75% of the 8 million
European immigrants who entered the United States during the first decade in
the 20th century, drew this diatribe from President-to-be Woodrow
Wilson in his “History of the American People” in 1902, the year he became
President at Princeton University:
“Throughout the (19th)
century men of the sturdy stocks of the north of Europe had made up the main
strain of foreign blood. But now
there came multitudes of men of the lowest classes from the south of Italy and
men of the meaner sort out of Hungary and Poland, men out of the ranks where
there was neither skill nor energy or any initiative of quick intelligence;
they came in numbers which increased from year to year, as if the countries of
the south of Europe were disburdening themselves of the more sordid and hapless
elements of their population.”
This vicious
cultural stereotyping bore the imprimatur of the academic elite. To try to prevent immigrants from
voting, literacy tests were put in place in 1917 and then quota laws in 1921
and 1924.
*****
The book develops in a compelling way the fact that the “richest of the
rich” have moved back to a position they had in the late 1920s, with about 24%
of all income going to the top 1% of the population. It had drifted down to be as low as about 13% during World
War II.
The author reviews many contributors to this inequality. They include the demise of labor unions,
a greater premium being afforded to higher education, the growth of single
parent homes (40% of homes where children are growing up with a single parent
are in poverty), the outsourcing of jobs in a re-configured global economy,
particularly in Asia, tax policy (not really a big factor as he reviews it;
interestingly, no matter what the nominal rates have been on higher income, the
net effective rates have varied fairly little) and at the upper end, just a
dramatic growth in those wages.
For example, the average CEO in 1973 was earning about 27 times more
than the average worker. That has
now increased 10-fold to about 270 times.
I witnessed it first-hand.
As to how to tackle the issue of income inequality, which I agree is
something to be pursued, the key instruments, it seems to me, are providing the
education and skills that young people need to participate in the best jobs in
the emerging economy, eliminating the most egregious laws and policies that
afford more money than is truly earned by top wage earners (e.g., carried
interest, obvious tax loopholes), ideally (though not likely practical)
imposing a minimum effective tax rate on high income earners (the idea that
Warren Buffett pays only 17% is, in his own view, absurd).
The even bigger issue for me is to ensure the possibility of upward mobility,
i.e., every child and young man and woman has the opportunity to fully use his/her
abilities. The key here within our
control is education. It starts at
the very earliest age (pre-natal/pre-school). I won’t spell out again here suggestions that I have made in
other blogs on this space.
