Can Learning Make Us
Less Unequal?

Some of America's most powerful political figures are urging Americans to put all their anti-inequality eggs in an education basket. Are they on to a cure for what ails a top-heavy America? Or just creating a distraction?

February 12 , 2007

By Sam Pizzigati

Washington officialdom — from the White House to the Senate to the Federal Reserve — seems to have suddenly discovered inequality. Week before last, President George W. Bush pronounced that “inequality is real.” Last week, inequality-is-real declarations came from a conservative Republican stalwart in the Senate and the nation’s top central banker, Federal Reserve Board chairman Ben Bernanke.

The conservative Senate stalwart, Texas Republican Kay Bailey Hutchison, lauded the President for bringing “much-needed attention to the issue of income inequality in America.” Bernanke, in an address on Tuesday, decried the “long-term trend toward greater inequality” that has now “been evident for at least three decades.”

Hutchison and Bernanke also advanced a remedy for inequality, the same exact remedy that President Bush had proposed the week before: more education.

Hutchison cited education as the “clear” reason why America’s “distribution of income has become more disproportionate.” Bernanke called education “likely the single greatest source of the long-term increase in inequality” and argued that investing more in education and training would “help reduce inequality” while expanding opportunity.

Are President Bush, Senator Hutchison, and Fed chief Bernanke on the right track? Is getting more Americans educated and trained all we need to do to make the United States more equal?

We can give this proposition an easy test. If getting a population more educated automatically reduces inequality, than inequality should fall over periods of time when a population becomes more educated.

Interestingly, we have experienced just such a period over the last three decades. Since 1970, Americans have become significantly more educated.

In 1970, the National Center for Education Statistics reports, only three out of four Americans aged 25-29 had completed high school. In 2004, nearly nine of ten Americans that age sported a high school education.

In 1970, only 16 percent of Americans in their late 20s held a four-year college degree. By 2004, that share of college-educated young Americans had nearly doubled, to 29 percent.

Something else has doubled since 1970: the share of national income that goes to America's richest 1 percent. The share going to average Americans, over these same years, has dropped. The average Americans who make up the bottom 90 percent of the nation's income distribution took home 67 percent of U.S. income in 1970, only 53 percent in 2004, despite their many more years of education.

We’ve become, in other words, more unequal at the same time we've become more educated. Why? We’ve become more unequal because education doesn’t determine how income and wealth get distributed. Politics does, and, over the last 30-odd years, a series of political decisions — on taxes, on trade, on labor rights, on regulating corporations — have tilted income and wealth to the top.

If President Bush and company seriously believed in education as the ultimate antidote to what ails the top-heavy American economy, then the single most important expression of the federal government’s priorities — the annual federal budget — would reflect this seriousness.

Instead, the latest federal budget proposal out of the White House, released last Monday, mostly reflects only a serious commitment to keeping the wealthy wealthy.  

“Government programs that serve middle-class and low-income Americans,” as the New York Times notes, “would be slashed to offset the cost of extending tax cuts that favor the rich.”

Education would bear a serious share of those slashes. The President’s budget plan would drop federal support for elementary and secondary schools by $2.8 billion, or 6.8 percent, notes a Center on Budget and Policy Priorities analysis. The budget does increase college aid available via the Pell Grant program. But the budget pays for that increase by “cutting entirely” other student-aid programs.

Americans making at least $1 million a year, meanwhile, would by 2012 see an average $162,000 a year — per year — more in their pockets if Congress swallows this new White House budget.

“The President says he wants to promote fiscal responsibility and address growing inequality, but his budget fails on both counts,” sums up Robert Greenstein of the Center on Budget and Policy Priorities.  “In fact, it would make both problems worse.”

For related aditional information: Education and the Inequality Debate,
Jared Bernstein and Larry Mishel, Economic Policy Institute, February 8, 2007

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Sam Pizzigati edits Too Much, an online weekly on excess and inequality.