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The Myth of the Level Playing Field

Sometimes pictures are worth a thousand words.  My bike ride to work takes me past two schools within a quarter of a mile of each other.  On one stretch of Stony Island Parkway sits the new Earl Shapiro Hall, a slick, multi-million dollar campus for the early childhood program of the University of Chicago Lab Schools.  Two University of Chicago police officers manage the large increase in traffic caused by the school’s opening, ensuring the safe arrival of children in their classrooms.  The view from my bike seat suggests an overwhelming preponderance of white and Asian-American children.  Meanwhile, just up the street an inexperienced school crossing attendant struggles to deal with the sudden increase in traffic on a dangerous corner as her children, almost all African American, make their way to the Bret Harte Elementary School.  Bret Harte is a math and science magnet school in the Chicago Public School district.  A look at the two schools’ websites reveals comparable aspirations for their children, but wildly divergent resources.  Full day tuition for nursery through grade 5 at the Lab School is $25,300 a year.  Per pupil spending in the Chicago Public Schools was about $12,000 per student in 2011 before this year’s round of large budget cuts.  While these numbers admittedly compare apples and oranges, the fruit is still rotten.

These two iconic images provide a striking view of one aspect of income inequality in the lives of our nation’s young people.  Study after study demonstrates the direct correlation between family income and school outcomes.  This is particularly the case when income disparities are concentrated geographically.  Bet the house on the probability that almost every one of the children making their way to the new Lab School complex will continue on through the Lab School system toward graduation and enrollment at a highly respected college or university.  And bet the house as well on the fact that some of the Bret Harte students will navigate the struggling public school system toward college admissions through personal determination and remarkable family support.  But the odds are against them, and they will leave the majority of their classmates behind.

So it is even more distressing to read “Striking it Richer:  The Evolution of Top Incomes in the United States” (September 3, 2013) by Emmanuel Saez, an economist at the University of California at Berkeley who studies income inequality in the US and Europe.  Here’s the headline:  The top ten percent in the US took home half of the income in the United States in 2012.  The top one percent took home more than 20%.  These are the highest rates since statistics started being kept in 1917, and are numbers previously approached only in the high rolling 1920’s. 

As startling as this is, it’s not really news.  These are trends that have been developing since the 1970’s when, in the U.S. and Great Briton, the Reagan and Thatcher revolutions set both nations on a course toward expanding income divides, trends not seen in other highly developed economies.  And these trends are accelerating.  From 1993 to 2012 average real incomes per family grew by a total of 17.9 percent.  Exclude the top 1 percent, however, and the average growth drops to 6.6 percent for an annual growth rate of .34 percent.  Meanwhile, while most Americans experienced stagnation at best, the top 1 percent saw income growth over the period of 86 percent.  In other words, the top 1 percent captured two-thirds of the overall economic growth of real incomes per family between 1993 and 2012.  Still don’t find this disturbing?  During three years of recovery between 2009 and 2012, the top 1 percent hauled in 95 percent of the real income growth in the nation.

Saez’s rather sterile academic rhetoric may not stir those at the barricades of the now dormant Occupy movement, but it is chilling nonetheless.

The labor market has been creating much more inequality over the last thirty years, with the very top earners capturing a large fraction of macroeconomic productivity gains.  A number of factors may help explain this increase in inequality, not only underlying technological changes but also the retreat of institutions developed during the New Deal and World War II – such as progressive tax policies, powerful unions, corporate provision of health and retirement benefits, and changing social norms regarding pay inequality.  We need to decide as a society whether this increase in income inequality is efficient and acceptable and, if not, what mix of institutional and tax reforms should be developed to counter it.

The children skipping to school on the sidewalks along Stony Island have not read Saez’s report.  They’re just living it.  The enormous imbalance of privilege will become more and more apparent to the children at Bret Harte while the children at the Lab School will move through lives often shielded from the tough south side neighborhoods where the pitiful scraps of America’s economy are tossed.  The playing field has never been level.  But its tilt grows steeper and steeper.  How many must slide into oblivion before our society says “enough!”

John H. Thomas
September 19, 2013

 

           

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