inequality

It’s Not About Technology

/ The Old Crank

Andrew Leonard, writing in Salon about the reaction among the Silicon Valley set to Jill Lepore’s critique of the theory of disruption innovation in the current New Yorker:

But let’s be clear here: Lepore is not engaging in an anti-technology screed. She’s training her artillery on the way Silicon Valley rationalizes its own behavior as some kind of natural law of progress.

It’s possible to be critical of the way Silicon Valley is agitating for regulatory reform that is designed to nurture Silicon Valley business models without being “anti-technology.” It’s possible to explore the question of how the current pace of technological innovation is affecting jobs and inequality without being anti-technology. It is possible to be critical of how, in the current moment, technology appears to be serving the interest of the owners of capital at the expense of workers without being anti-technology. It’s even possible to love one’s smartphone and the Internet while at the same time critiquing run-amok “change the world” hype.

Income Inequality and Adult Literacy

/ The Old Crank

I wanted to share a really alarming chart from the OECD’s summary analysis of the initial PIAAC results. (PIAAC, for those jumping into this for the first time, is a new international survey of adult skills, released a few weeks ago.)

Source: Skilled for Life - Key findings from the survey of adult skills (OECD), 2013

Source: Skilled for Life – Key findings from the survey of adult skills (OECD), 2013

Look at where the U.S. is on this chart (bottom left): of the countries surveyed, we have the second highest income inequality, and the highest literacy skills inequality.

The bottom left corner is the absolute worst place to be, and that’s where we are.

But this chart also supports the notion that skills are not the only story when it comes to income inequality: Japan, which also has worse than average skills inequality, (though not as bad as the U.S.), manages to have the lowest income inequality of those countries surveyed. This suggests that other factors are at work in Japan that reduce income inequality. If skills were the only factor, you’d see the countries with the greatest skills inequality all clustered in the bottom left corner.

In addition, several countries, like Germany and Sweden, do a much better job at addressing the skills gap, but still have a higher-than-average income inequality.

The point is, while low skills may be an overall drag on economic growth, there appear to be other other things you can do to steer more income growth towards those at the bottom of the wage scale.

Addressing Inequality Through Education

/ The Old Crank

Jared Bernstein, writing for the New York Times’ Economix blog, responding to Miles Corak’s recent commentary on inequality, arguing that he doesn’t go far enough in his policy recommendations:

It’s a common default for economists and policy makers to present a trenchant analysis of a problem with many deep roots and then conclude, “That’s why we need better education and skill development.”

The problem is that a central thesis of the inequality/mobility nexus is that skills alone won’t crack it. Again, no question that overcoming the barriers that block lower-income children from achieving their intellectual (and economically productive) potential is an essential part of this, but if you don’t deal with the politics — really, the power — you’ll end up with a bunch more children who fortunately have gone a lot further in their personal development, but remain stuck in or near the income decile of their birth. (my emphasis)

I think that’s true, and I also had another thought.

When you look at the history of adult literacy in the U.S., you’ll find that for most of that history, adult literacy education was mainly focused on increasing the political agency of the individuals being taught. Only over the last 20-25 years or so (as adult education has become somewhat more institutionalized in schools and community colleges) has the focus shifted (at least in the policy arena) to more of an emphasis on employment and training. I realized, reading this commentary, that my discomfort with the pre-K movement stems not just from the fact that proponents often brush aside the fundamental pedagogical role that parents and the home environment play in children’s literacy development. That’s a problem to be sure, but the more fundamental problem with ignoring parents and parents’ education—particularly the parents of the poor—is that it fails to acknowledge or address the political agency of those parents—political agency needed in order to bring about meaningful political change.

Those who argue that education is not enough to solve the inequality problem without additional political change raise some valid points. But education does play a role in developing the critical thinking and self-reflection needed to bring about political changes. Education can do more than just help people reach their economic potential, it can also play a bigger role in bringing about the political changes Bernstein (and others) suggest.

Is the Allegory of the Cave a parenting skill? I suspect some would argue that it is.

Economic Growth as Spectator Sport

/ The Old Crank

Secretary of Education Arne Duncan appeared at a forum on education at American University here in Washington last Friday, and, according to news reports, told the audience that, “[a]s a country we’re going to educate our way to a better economy or we’re going to struggle.” Sec. Duncan uses this line—or variation of it—a lot. (He used it during his appearance on The Daily Show a couple of weeks ago, for example.)

But if a “better” economy is one in which lower and middle class incomes are rising, then we may have additional work to do. From a post by Jared Bernstein on his blog today:

All of the factors driving up inequality remain in place, most notably, high unemployment, and we know from profits data (way up), corporate balance sheets (way flush), and real paychecks of middle-class workers (way flat), that what growth has occurred hasn’t reached much below the top end.

If this expansion is to be one where growth is more than a spectator sport for average folks, we’ve got some serious policy work to do.

In other words, if this is how our economic recovery is playing out, will improving education and increasing the skills of our workforce—while undeniably good policy goals—be enough to move low and middle class wages in the right direction?