

Obama should give us the truth about income gap: Other view

Inequality is a dire concern but its causes are complex and there's no ready solution

1:21 PM, Jan. 30, 2014  |  Comments
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From World War II until the end of the 1970s, the top 1 percent of American wage earners took home roughly one-third of all U.S. income. Now they take home half. It is a poisonous trend that leaves the benefits of economic growth to a decreasing few while others are shut out from the American Dream. So it's no surprise that the issue is pushing its way onto the political stage.

Two-thirds of the public now recognizes the problem in polls, and President Obama made it a key theme of Tuesday night's State of the Union Address, proposing "ladders of opportunity" to help more people climb out of an economic hole.

But before the debate gets rolling - with familiar prescriptions such as job training, taxes on the wealthy, an increased minimum wage - it's worth pausing to consider what is driving these trends, how powerful those forces are, and how difficult they are to influence.

Greedy bankers and their ilk are bit players. They are just the ones best able to exploit the true drivers of inequality: the rapid advance of technology, which is replacing all manner of jobs with machines, and globalization, which depresses wages.

Neither trend is going away, nor should it, but both hit hardest on those with the fewest skills. Unemployment for college-educated people 25 and older is currently 3.3 percent. For those without a degree, it's 7.1 percent.

The question for Obama this week is what can be done to revive opportunity for the once-contented blue-collar middle class and to give the poor the means to break from a multigenerational cycle of poverty?

Everyone's favorite answer is education.

Obama is the third consecutive president to make it a priority. There have been some useful results, particularly the rise of community colleges as job training centers, and the models established by the best charter schools, which have improved education in impoverished areas long seen as intractable. But still, during the 21 years those presidents have served, inequality has steadily grown.

Increasing the minimum wage can help, but it is palliative, not a means of creating opportunity. And while some Robin Hood tax schemes can potentially support the poor at the expense of the rich (for instance, New York Mayor Bill de Blasio's plan to tax the rich to finance public preschool), they can't do much for the middle class, simply because that class is so big.

Further complicating the problem is family breakdown. Births to single mothers constituted 28 percent of all births in 1990. By 2008, they were up to 40.6 percent, making it harder to support kids, much less instill in them a work and education ethic.

Obama appropriately calls this the defining challenge of our time. He should acquaint the American people with the reasons that is true.

Income inequality is fodder for all manner of ideological argument and political gamesmanship. But the truth is that no one has yet come up with a convincing plan for reversing it.