The deeper connection between the opportunity gap and growing income inequality

Our Kids. The American Dream in Crisis

Today I'm bringing some selected statements to you from ch. 6 of a great book by Robert Putnam. His views, properly adapted, also apply to our country. It is not only a US issue.

As income inequality expands, kids from more privileged backgrounds start and probably finish further and further ahead of their less privileged peers, even if the rate of socioeconomic mobility is unchanged.

In 1975 economist Arthur Okun famously formulated what he called “the Big Tradeoff” between equity and efficiency. We could pursue policies that would enhance social equity—say, by redistributing income through the tax system—but only at the cost of economic productivity. It is sometimes forgotten that Okun himself argued that this ironclad tradeoff does not typically apply to the pursuit of equality of opportunity. In such cases, there is no such tradeoff, because investment in poor kids raises the rate of growth for everyone, at the same time leveling the playing field in favor of poor kids.

But why should the opportunity gap matter for those of us on its lucky side? The answer is that the destiny of poor kids in America has broad implications for our economy, our democracy, and our values.

The essence of democracy is equal influence on public decisions. A representative democracy requires at least widespread, if not universal, voting and grassroots civic engagement. The more that other means of political influence, such as money, are powerful and unevenly distributed across citizens, the more important electoral and grassroots involvement becomes for ensuring some approximation to democracy.

That more educated and affluent citizens participate more actively in public affairs, and have more political knowledge and civic skills than their impoverished, ill-educated fellow citizens and are more likely to take part in virtually all forms of political and civic engagement, is one of the most robust findings of students of political behavior. So what are the implications of the growing opportunity gap for American democracy? Rich kids are more confident that they can influence government, and they are largely right about that. Not surprisingly, poor kids are less likely to try.

What can we do—as members of our communities, and as a country—to help poor kids begin to catch up with rich kids? As this book has outlined, this problem is not simple, and it does not have a simple solution

Family structure, child development and parenting, schools and community, four approaches that R. Putnam suggests to address the issue.

In our polarized public debate an unexpected consensus has begun to crystalize across ideological lines that the collapse of the working-class family is a central contributor to the growing opportunity gap.

Interesting approach, and unfinished in my modest opinion. What happens when you have the most educated generation and your country is not able to provide jobs for them? That's why we do need an State, at least to define the right policies according to our preferences.

 

PS. Angus Deaton on inequality